University of Wroclaw Faculty of Social Sciences Institute of International Studies

Veronica Russu

The EU Comprehensive Institution Building programme - Opportunities for the Development of the Public Institutions in the selected Eastern Partnership countries: Georgia and Moldova

Doctoral thesis supervised by: prof. dr hab. Elżbieta Stadtmüller and dr Renata Kunert-Milcarz

Wroclaw, 2020 Uniwersytet Wrocławski Wydział Nauk Społecznych Instytut Studiów Międzynarodowych

Veronica Russu

Kompleksowy program rozwoju instytucjonalnego UE - Możliwości rozwoju Instytucji Publicznych w wybranych krajach Partnerstwa Wschodniego: Gruzji i Mołdawii

Praca doktorska pod kierunkiem: prof. dr hab. Elżbiety Stadtmüller i dr Renaty Kunert-Milcarz

Wrocław, 2020 Table of contents

List of abbreviations Aknowledgements

Introduction………………………………………………………...……………….…....8

Chapter I Theoretical perspectives of institutionalism, and of the Europeanization of the institutional approach .……………………………………….………………….21 1.1. Theoretical delimitation: institutional theory, theory of institutions and institutionalism ……………………..…………………………………………….21 1.2. New institutionalism in EU studies: current debates ……………………...…….23 1.3. Conceptual dimensions: transformation approach and institutional change ….....42 1.4. Europeanization as institutional-building …………...... …..50

Chapter II The European Neighbourhood Policy: context and implementation ...... 57 2.1. European Neighbourhood Policy: origins and objectives …….……………...…..57 2.2. The Eastern Partnership – a decade of challenges and opportunities …………... 85 2.3. European Neighbourhood Policy and the Eastern Partnership initiative: critical reflection ….……………………….…………….……………………….……… 95 2.4. Russia, the European Union and Eastern Partnership relations – an overview ……………...... … 99

Chapter III The Comprehensive Institution Building programme – a new approach for the Eastern Partnership countries ……………………..………………..……….107 3.1. Institution-building instruments in Eastern Partnership countries ………...... 107 3.2. The Comprehensive Institution Building programme at a glance ……...... …… 117 3.3. Comprehensive Institution Building: Description of the new programme ….....119 3.4. Comprehensive Institution Building budget and sectors within Eastern Partnership countries ……………………………………...…………...………...……….….124 3.5. Comprehensive Institution Building: Strengths, Weaknesses, Opportunities and Threats ………………………………………………..………...……………… 132

Chapter IV Comprehensive Institution Building Programme in Moldova ……… 136 4.1. Moldova country context ….………………………………...……..……….…. 136 4.2. Comprehensive Institution Building in the European Neighbourhood Partnership Instrument Annual Action Programmes 2011-2013 ………………………...... …147 4.2.1. Cluster 1 Public administration reform ………………………………….….153 4.2.2. Cluster 2 Rule of law …………………………………………………...... 168 4.2.3. Cluster 3 Deep and Comprehensive Free Trade Area ……………………...173 4.3. Preliminary results of CIB in Moldova ……….………………….....………..... 178 4.4. Summary ……….……………………………………………….…..……….… 196

Chapter V Comprehensive Institution Building programme in Georgia ……....…198 5.1. Georgia country context ……………………………………...... 198 5.2. Comprehensive Institution Building in the European Neighbourhood Partnership Instrument Annual Action Programmes 2011-2013 ………...... 209 5.2.1. Cluster 1 Coordination and preparation of new enhanced agreements with the EU …………………………………...……………………………………...…....214 5.2.2. Cluster 2 Democratic reforms, human rights and good governance ...…...… 220 5.2.3. Cluster 3 Deep and Comprehensive Free Trade Area ….…………..……… 228 5.3. Preliminary results of Comprehensive Institution Building in Georgia .…...…. 237 5.4. Summary ………...……………………………………………………..……… 257

Conclusions and outcomes …...... 259

Bibliography ……………………………………………………………………………271

List of tables ……………………………………………………………………………311 List of figures …………………………………………………………………………...312 List of boxes ……………………………………………………………………………313 Appendices ……………………………………………………………………………..314

List of abbreviations

AA – Association Agreement AAP – Annual Action Programme AEI – Alliance for European Integration AGEPI – State Agency for Intellectual Property ATPs – Autonomous Trade Preferences BTI – The Bertelsmann Index CBC – Cross Border Cooperation CCECC – Centre for Combating Economic Crimes and Corruption CIB – Comprehensive Institution Building CIS – Commonwealth of Independent States CNAM – National Health Insurance Company CNAS – National Social Insurance House CPI – Corruption Perception Index CSF – Civil Society Fund CSP – Country Strategy Paper DCFTA - Deep Comprehensive Free Trade Agreement EaP – Eastern Partnership EaPIC – Eastern Partnership Integration and Cooperation EC – European Commission ECG – Electronic Government Centre ECHR – European Convention on Human Rights EEAS – European External Action Service EED – European Endowment Democracy EEU- Eurasian Economic Union EFI – Economic Freedom Index ENI – European Neighbourhood Instrument ENP – European Neighbourhood Policy ENPI – European Neighbourhood Partnership Instrument EP – European Parliament EUI – Economist Intelligence Unit EUMAP – EU–Moldova Action Plan FD – Framework Document GEOSTM – Georgian National Agency for Standards, Technical Regulations and Metrology G2B – Government to Business G2C – Government to Citizens G2G – Government to Government

ICT - Information and Communications Technology IDP – Institutional Development Plans IMF – International Monetary Found IRP –Institutional Reform Plans MAFI – Ministry of Agriculture and Food Industry MEDA – European Mediterranean Partnership MESD – Ministry of Economy and Sustainable Development MFA – Macro-financial assistance MFAEI – Ministry for Foreign Affairs and European Integration MoF – Ministry of Finance NAC – National Anticorruption Centre NDA – National Development Strategy NDICI – Neighbourhood Development and International Cooperation Instrument NFSA – National Food Safety Agency NIF – Neighbourhood Investment Fcaility NIP – National Indicative Programme NIS – National Independent States OGAP – Open Government Action Plan OSMEEAI – Office of the State Minister on European and Euro-Atlantic Integration PAO – Public Administration Office PAR – Public Administration Reform PCA – Political and Cooperation Agreement PCRM – Communist Party of Moldova PDM – Democratic Party of Moldova PL – Liberal Party of Moldova PLDM – Liberal Democratic Party of Moldova PPA – Public Procurement Agency PSRM – Party of Socialists of the Republic of Moldova RCI – Rational Choice Institutionalism RTA – Residential Twinning Advisors SDP – Strategic Development Programmes SIGMA – Support for Improvement in Governance and Management SPAR – Strategy of Public Administration Reform SPRING – Support for Partnership, Reforms and Inclusive Growth SPS – Sanitary and phytosanitary TACIS – Technical Assistance for the Commonwealth of Independent States programme TAIEX - Technical Assistance and Information Exchange instrument WB – World Bank

Acknowledgements

I would like to express my deepest gratitude to my research supervisors Prof. dr hab. Elżbieta Stadtmüller and Dr. Renata Kunert-Milcarz. Prof. Stadtmüller and Dr. Kunert-Milcarz have inspired and encouraged me throughout the entire process of this thesis. Their constant feedback was crucial in the development of this dissertation for which I immensely thankful. I am also grateful to the Ministry of Foreign Affairs and the Ministry of Science and Higher Education of the Republic of Poland that offered me the opportunity to do my PhD studies at the University of Wroclaw under the Stefan Banach Scholarship Programme from 2013 to 2017. Throughout part of my PhD years, I have been hosted by the Faculty of Social Science at the University of Leuven, Belgium as Erasmus student. I thank to Prof. Dr. Peter Vermeerchs and Dr. Niels Smeets who were my local supervisors during my research stay in Leuven. I am very grateful to Ursula Broda, director of the International Office at the University of Wroclaw that she encouraged me with positive support on professional and personal life during my research stay in Wroclaw. Finally, I am deeply indebted to my family who has been waiting with impatience for the completion of my dissertation. My deep gratitude goes to my mother Lidia who encouraged me from distance and kept me going on with positive thoughts. This dissertation would not have been possible without her input. I dedicated the thesis to her. I could not conclude without mentioning my cat Felix which brought a smile on my face every time when I felt the pressure or sad moments. Finally, having finished this dissertation gives me huge emotions and wonderful memories. Thank you to all.

Introduction

Overview of the dissertation The fall of communism in Eastern Europe (1989-1991) led to one of the most profound changes of political and economic systems ever witnessed in human history. For the concerned countries, regime change meant the transition from a communist society and a planned economy to some form of a Western model of a democratic, market-oriented society, based on a wide-ranging economic, political, social and cultural transformation. The early 1990s witnessed the transformation of social, economic and political processes not only in the countries of Central Eastern Europe but also in the former Soviet Union. The Central Eastern European countries found themselves taking over ‘Western models’ that were perceived as having shown their functionality over time. However, while the former communist countries knew clearly where they started from, it was not obvious if, when and how they would reach their final destination. ‘Shock therapy’ meaning ‘a rapid change to private ownership, market institutions and international economic integration’ (Sachs 1994: 5) gained shape in countries like Poland, Czechoslovakia and Estonia. Russia, Romania, Bulgaria and others also implemented some form of ‘shock therapy’ reforms. However, the latter group lacked coherence in their reforms. The introduction of market institutions followed a slower pattern there. Most of the former Soviet countries like Belarus, Ukraine, Armenia, Moldova and in the first years of the 1990s also Georgia, failed to implement comprehensive reforms, partially because some of them were confronted with armed conflicts (Georgia, Moldova) (Sachs 1994: 5). From early on in 1989/1990, Central Eastern European countries declared their intention to follow a democratic path, or in other words to ‘return to Europe’ (Kaldor and Vejvoda 1997: 60). In this context, the role of the EU in the process of transformation of these countries increased through the introduction of the Copenhagen Criteria in 1993. These EU criteria concern standards on democratic systems, stability of institutions, rule of law, respect of human rights, market economy, capacity to cope with competition and market forces, and administrative and institutional capacity to effectively implement the EU acquis1. The acceptance of the Copenhagen Criteria by former communist partner countries was a clear direction to follow and a concrete ‘list of homework to do’ for Central Eastern European countries. As a consequence of implemented reforms, in 2004

1See more: European Commission. DG European Neighbourhood Policy and Enlargement Negotiations available at https://ec.europa.eu/neighbourhood-enlargement/node_en, [accessed on 16 Nov. 2019].

8 eight new members from Central Eastern Europe (plus Malta and Cyprus) joined to the EU (Wammen 2013: 5). The EU has been seen as a key promoter of democratic modernization in the region. Despite the difficulties and political tensions in the transition countries, to this day the Union continues to promote democratic values, respect of the rule of law as well as freedom and security. After the ‘Big Bang’ enlargement of 2004, the main goal of the EU was to consolidate a ‘ring of friends’ with democratic, well-governed and welfare states and to ensure security, stability, and prosperity in its neighbourhood region. The enlargements of 2004, 2007 (Romania and Bulgaria) and 2013 (Croatia) brought the EU geographically closer to the post-Soviet countries. Therefore, the EU becomes interested over time to re-define and strengthen its relations with the new neighbourhood (Keukeleire and Delreux 2014: 256). Launched in 2004 and reviewed in 2011 and 2015, the European Neighbourhood Policy (ENP) promoted a framework for relations of the EU with its neighbours in the eastern and southern regions. The Lisbon Treaty further confirmed the important role of the EU in its neighbourhood, noting that ‘the Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness [...] and peaceful relations based on cooperation’ (Lisbon Treaty 2007, entered into force in 2009). Partially as a result to the Russian-Georgian war of 2008, in 2009 the EU tried to further strengthen its relations with the countries of the Eastern neighbourhood through a new Eastern Partnership (EaP) initiative, initiated by Poland and Sweden. In the framework of the EaP, the EU strived to increase its influence in the region through a reinforced process of democratic transformation in the EaP countries. Through the EaP initiative, the EU has indeed contributed to the ‘Europeanization’ of the EaP countries. More exactly, the involved transfer of know-how from the EU to EaP partner countries can be understood as an Europeanization process. Europeanization is one of the important instruments for political transformation at the disposal of the EU. Different scholars see this transmission processes in terms of institutionalisation, procedures and policies (Borzel and Risse 2009, Graziano and Vink 2013; Radaelli 2003). Tanja Borzel and Thomas Risse illustrated two mechanisms of the Europeanization process: top-down and bottom-up. For EaP countries with a lack of membership perspective, the top-down mechanism is usually more relevant than bottom-up. Through the top-down mechanism, the EU promotes democracy through political dialogue with the

9 internal actors (governments), thereby trying to influence and empower domestic institutions to implement the reform processes (Borzel and Risse 2009). The EU Comprehensive Institutions Building (CIB) was an attempt by the EU to support institution-building in the EaP countries. This dissertation covers new ground in the rapidly evolving context of institution-building in the EaP region, by studying the example of the CIB. The five EaP countries of Armenia, Azerbaijan, Georgia, Moldova, and Ukraine participated in the European Union's CIB initiative since 2011. For political reasons, Belarus never took part in CIB. CIB merits a thorough scientific analysis for several reasons: (i) CIB targeted the reform of partner countries’ institutional consolidation to ensure capacity to prepare and implement the EU Association Agreement (AA), (ii) the programme was intended to prepare the partner countries for negotiation and implementation of the Deep and Comprehensive Free Trade Agreement (DCFTA), (iii) CIB was planned to contribute to ensuring respect for the rule of law, human rights and fundamental freedoms, (iv) it offered possibilities to apply lessons learned in institutional reforms in more advanced transition economies, notably the new EU member states that entered the Union in 2004, 2007 and 2013, finally (v) CIB was an important instrument to engage EU and EaP countries in an ever-closer web of norms, standards, policies and strategies. Theoretical framework In order to elaborate the theoretical approach of this research, a few definitions are necessary. The classical definition of political institutions developed by Samuel Huntington focuses on the process through which organizations acquire value and stability. The level of institutionalisation can be measured by the categories of adaptability, complexity, autonomy, and coherence (Huntington 1968: 12-13). Douglass North argues that the role of institutions is to reduce uncertainty by establishing a stable structure for human interaction. Building powerful state institutions is an important priority for transition countries where there is a lack of institutional capacity, poor governance, declining economic performance and in some cases low levels of human resource development (North 1990: 6). For determining the conceptual aspects of institutions and institution-building in a more complex manner, Lijphart (1984), Wildavsky (1998), Dermier and Krehbiel (2003), Przeworski (2004), Brinkerhoff (2007), Fukuyama (2012), Acemoglu and Robinson (2012) and others are also used and quoted in this thesis. Institution-building is a way to reconstruct institutions or organisations. The European Commission used the term ‘institution-building’ when it launched the Twinning

10 instrument and defined it as ‘developing the structure and systems, human resources and management skills needed to implement the acquis’ (Dimitrova 2011: 179). In this perspective, institution-building particularly focuses on public administration reforms and good governance, with institution-building including promotion of democracy and defence of EU values (Tulmets 2011). The new institutionalism (rational choice institutionalism) and Europeanisation approaches are a starting point for the study of the role of the EU in the process of institution building in Moldova and Georgia. As the name suggests, both approaches put their emphasis on institutions. The rational choice institutionalism (RCI) approach assumes that all actors behave rationally and have a set of ordered preferences and interests that they try to realize in political life (March and Olsen 1989, Tsebelis 1991, Hall and Taylor 1996, Rosamond 2000, Rhodes 2008, Pollack 2009). The Europeanization approach leads to the study of the processes and instruments through which the EU transforms and enforces its policies at the domestic level of the EaP countries. The study of Europeanization is using a ‘top-down’ view of the reforms provided by the EU through its instruments CIB, Twinning, TAIEX and SIGMA. Through the Europeanization approach, the Europeanization of institutional actors (civil servants) at the domestic level is studied (Gawrich, Melnykovska and Schweickert 2008, Borzel and Risse 2009, Lindstrom 2015, Sedelmeier 2011 etc). Through its differences, the RCI and Europeanization approaches are complementing each other well in the study of reform processes in Georgia and Moldova. As both are former Soviet countries, it is worth to take into consideration transition theory in order to understand the process of transformation from an undemocratic system to a democratic (or at least a formalistically democratic) one. In this way, it can be studied how significant institutional reforms are contributing to the consolidation of democracy. All the mentioned theoretical approaches contribute to a framework to analyse the process of institution building in both countries and can help answer the question to what extent the EU influences this process. Methodology The overall goal of this thesis is to describe and analyse the role of the CIB programme in the EaP countries and evaluate the impact of institution-building in Georgia and Moldova. The specific objectives of the thesis are threefold:

. to describe and analyse the CIB Programme on a conceptual level using methods and approaches of the Europeanisation process promoted by the EU through ENP and EaP as well as the applicability of rational choice institutionalism; . to examine the CIB Programme in the EaP countries in general and to study CIB activities and reforms in Georgia and Moldova in special; . to analyse CIB’s effectiveness and efficiency and to formulate proposals for improvements where feasible. In general, the main focus of this thesis is the analysis of institution-building for Moldova and Georgia. The emphasis is put particularly on democratic processes, strategies of internal and external actors, development opportunities promoted by the EU and the impact of the EU actions on the EaP countries. In order to study the aspects mentioned above, this thesis explores the following main research question: What changes and opportunities occurred throughout the implementation of the Comprehensive Institution Building Programme in Moldova and Georgia and how efficient and effective was the programme’s implementation, given that there were external and internal factors which affected/disturbed the European integration of these countries? Based on this core research question, the secondary research questions are: a) What strategies and instruments have been pursued in order to support the democratisation process and in special institution-building? b) What was the impact of EU involvement through its tools in the Eastern Partnership? c) To what extent did the Comprehensive Institution Building Programme play a relevant role concerning Association Agreements and Deep and Comprehensive Free Trade Area? d) Has the EU offered a real European perspective for the Eastern Partnership countries in case they implemented their Association Agreement, for assuring a space of stability, security, prosperity, credibility and a good neighbourhood on the EU borders? Would this European perspective eventually include full EU- membership? In view of an objective and critical analysis, the main research hypothesis being tested in this dissertation is that the CIB programme is an efficient, effective and equitable state-of-the-art institution reform approach that successfully helps EaP countries to prepare

12 and implement the complex obligations of EU AA and DCFTA, and thereby brings them a significant step closer to a possible later EU candidate status and eventual membership. Based on the main hypothesis, the secondary hypothesises are: H1. Reforming institutions is a vital component of the transformation of the Eastern Partnership countries. H2. The EU-funded Comprehensive Institution Building Programme was an important instrument for reforming and developing public institutions in Eastern Partnership countries. H3. The implementation of the Comprehensive Institution Building Programme showed good results concerning the control of corruption in public institutions in Georgia and Moldova. H4. Comprehensive Institution Building key institutions were well selected, which facilitated the implementation of Association Agreement including Deep and Comprehensive Free Trade Agreement. H5. Reforming institutions and establishing a new class of well-trained EU oriented civil servants led to a successful implementation of Association Agreement including Deep and Comprehensive Free Trade Agreement. This thesis uses different research methods relevant to the field of international relations and political science. In order to achieve the goal and objectives mentioned above, the following research methods are used: methodological approaches: institutional analysis, systemic and behavioural analysis, comparative case studies; quantitative methods: data collection, statistical data analysis; qualitative content methodology: interviews (semi-structured), analysis and synthesis of information obtained, and evaluation method. Institutional analysis is necessary to study institutional reform and the activities of state institutions in the democratization process. Additionally, it is indispensable in the examination of the role of the EU in the process of institutional strengthening in the ENP region, more specifically in EaP countries. The main focus of institutional analysis in this thesis is on the state institutions in Georgia and the Republic of Moldova (hereinafter Moldova) which both signed the EU agreements AA and DCFTA. For the implementation of these agreements, both countries had to prepare and reform their institutions as well as their civil servants. In this context, the thesis takes into consideration institutional activities regarding the approximation of national legislation with EU norms and standards.

Systemic analysis involves an examination of the transformation from an authoritarian system to a democratic one. Furthermore, systemic analysis can be connected with institutional analysis because both investigate the institutional transformation during the transition process of Georgia and Moldova. In addition, systemic analysis allows identifying in which stage Georgia and Moldova are in the process of transition to a consolidated democracy. Behaviour analysis implies studying preferences and interests of the main actors that are involved in the subject field. In this context, the preferences and interests of the main actors involved are being analysed, namely the EU, the Georgian and the Moldavian governments, as well as Russia as a regional actor that is important on geopolitical grounds in both examined countries. Moreover, the thesis takes into consideration the citizens’ perceptions of state institutions’ activity, citizens’ confidence in the state institutions, as well as their perception of the institutional reform and the democratization process itself. A case study approach is used to analyse the application of CIB in practice. While this paper provides an overview on and analysis of the CIB as a whole, due to capacity constraints the present thesis conducts an in-depth analysis of the CIB programme only for the case of the two frontrunner EaP countries Georgia and Moldova. A close examination of CIB in all participating EaP countries would have been preferable, but would have surpassed the possibilities of a single doctoral thesis. The thesis empirically describes and analyses CIB-supported reforms in Georgia and Moldova, in order to lay the groundwork for more theoretical deliberations. Besides the mentioned resource constraints, the choice of Georgia and Moldova as case studies had also other reasons: Namely (i) the two countries declared their pro–western orientation and were more interested in the implementation of the CIB programme than other EaP countries. (ii) Both countries have a similar number of CIB key institutions (13 in Moldova, 10 in Georgia). (iii) The small size of the two countries and their administration made a research on a huge programme such as CIB by a single researcher more realistic than in larger countries such as Ukraine. (iv) Finally, also due do the smaller size of the two countries and the currently very weak domestic funding level of its administration, CIB can be assumed to have a potentially stronger impact than in larger, better-financed administrations. The thesis analyses if CIB was a strategically important EU support for EaP countries in general, and Georgia and Moldova in particular. If successful, the EU planned to use the CIB-approach also for other countries in the ENP region, and potentially beyond.

However, it should be considered that unstable and unconsolidated democracies persist in both Georgia and Moldova. The author takes into consideration all these changes and analyses achievements as well as the influence of political instabilities on the planned institutional reforms. In all these deliberations, it is important for the research to take Russia into account, given that the EaP region is still considered a post-Soviet space. Undoubtedly, Russia still plays a major role in the policy-making decisions taken by the EaP countries in their relations with the EU. In terms of data collection methods, the thesis uses qualitative analysis, based on both primary and secondary sources. As data collection methodology, documentation and interviews can be mentioned. To commence with documentation, this includes official documents of the EU and of state institutions from Moldova and Georgia. In general, these documents are available on official EU and government websites. EU documents relevant for the ENP region and for EaP countries, in special Georgia and Moldova, were identified, collected, reviewed and analyzed. A descriptive approach was used that emphasizes the events related to ENP and EaP and the theoretical constructions of concepts such as institutions and institution- building, Europeanization, transition process, capacity building and European integration. In addition, discourse and conversation analysis was applied, especially the analysis of the discourses of officials from Moldova and Georgia, EU officials and EU Member States, of relevant experts as well as of declarations in mass media, interviews and policy papers of think-tanks. For an understanding of the structure of the CIB programme, relevant documents, reports, institution strategies, action plans that are particularly important for both CIB countries, CIB key institutions as well as the EU were analyzed and evaluated. Interviews (qualitative methods) are part of the data collection methodology. They were used to collect data and clarify and verify information from official documents, and to gather feedback regarding the performance of the CIB programme. Generally, interviews were semi-structured, as this allowed to ask for details on specific issues, while on the other hand giving the interview partner the possibility to contribute with additional information relevant in the context of the thesis. Interviews2 with CIB stakeholders from

2At the beginning of each interview, it was explained that information from the interviews will be used for research purposes only. There were interviewees who accepted that their names and institutions were

15 key public institutions from Moldova and Georgia were conducted in August–November 2016. In addition, two semi-structured interviews with two EU officials from the EU Delegation in Moldova and the European Commission, Directorate General DEVCO were conducted in September 2016 and December 2018. More interviews were conducted with Moldovan than with Georgian CIB stakeholders, due to the fact that the implementation of CIB in the latter country was delayed. Due to this delay, at the time of the study visit to Tbilisi, a number of Georgian key stakeholders were not yet ready to be interviewed on CIB results. For this reason, the empiric part on Georgia is based more on official documents such as evaluation reports from the EU side, on documents from Georgian state institutions and on think-tank policy papers, than on the interviews. Observation is a relevant method as well. Firstly, it is a realistic approach as events might be observed in real time (e.g. the process of ENP review in 2011, 2015, the implementation of CIB, the process of institutional change in the examined countries, the Europeanization process through institution building) and secondly, it is a contextual approach because it embeds events in a broader political context (country protests, political instability, changes of governments). As a quantitative methods, analysis of statistical data was used especially for the evaluation of the stages of transition in Moldova and Georgia. The following reports were used: Freedom in the World, Economic Freedom Index, EUI Democracy Index, Bertelsmann Transformation Index and Corruption Perception Index. As far as the evaluation method is concerned, this approach determines how best to carry out the evaluation of the CIB programme. To do this, a set of indicators has been identified to cover all relevant aspects of the CIB programme. Indicators used in this research are: (i) Efficiency: relation between resource input and results; (ii) Effectiveness: how CIB institutions achieve their objectives and how CIB results correspond to institutional needs; (iii) Equity: are reforms socially just and pro-poor? Avoidance of discriminations; and (iv) Transparency: the level of corruption, easiness of doing business, confidence in institutions. Structure of the thesis The structure of the thesis is the following. Chapter I presents the theoretical framework of the dissertation. It provides the theoretical background of new institutionalism theory with the main emphasis on the RCI approach and its applicability in published, while others asked for anonymity and a mentioning only of the institutions they represent. The notes and tapes of interviews are stored by the author and can be provided upon request.

EU studies. In addition, the Europeanization process is examined from a ‘top-down’ perspective, namely how the EU uses its instruments and policies to transfer its expertise and know-how to the EaP countries focusing on institution-building. The process of transformation from an undemocratic regime to a democratic one is analysed as well, and relevant models of the transition process are identified in order to determine at which stages Moldova and Georgia are in the process of transition to democratic consolidation. Chapter II is divided in three parts. The first one presents the general context of the ENP and its main financial instruments: European Neighbourhood Partnership Instrument (ENPI), European Neighbourhood Instrument (ENI) and the future Neighbourhood Development and International Cooperation Instrument (NDICI). It analyses the main path to reforms suggested by the EU to the neighbourhood countries, as well as the new perspectives brought forward by the ENP reviews in 2011 and 2013. The second one considers the EaP initiative promoted by Poland and Sweden in 2009 and related main challenges and opportunities for the six EaP countries. This part contains a critical reflection of the ENP in general and EaP in special. The last one describes the role of Russia as a regional actor in influencing the policy making decisions of the EaP countries, and more generally the Russian relationship with the EU concerning the eastern neighbourhood region. Chapter III outlines the institution-building instruments Twinning, TAIEX and SIGMA promoted by the EU in ENP, and the impact of these instruments on the Europeanization of EaP countries. The chapter describes the ‘anatomy’ of the CIB programme which was designed especially for the EaP countries and presents the strengths and weaknesses of the programme. All three chapters mentioned above end with a short summary. Chapter IV and V focus on the two case study countries Georgia and Moldova. Both chapters have a similar structure: First, a general overview of the respective country from its independence until present (2019) is presented. Second, the implementation of the CIB Programme from 2011-2013 under ENPI 2007-2013 is outlined. However, as many CIB components such as signature of the Framework Document, identification of CIB key state institutions and preparation of Institutional Reform Plans (IRPs) by CIB state institutions were delayed, many CIB reforms have continued under ENI 2014-2020. Although the CIB programme was originally planned to last for the three years 2011-2013, in fact it continued until 2017-2018. As a result, the chapters comprise the

17 analysis of the CIB projects under ENI as well as a post-programme monitoring and evaluation from 2014 until 2019. Chapter IV in this regard sketches the implementation of the CIB programme in Moldova and analyses the main CIB clusters and reforms and activities that have been implemented in this country by its key CIB institutions. The chapter presents the preliminary CIB results within Moldavian CIB state institutions. A summary is presented at the end of the chapter. Chapter V presents the implementation of the CIB programme in Georgia and describes the main reforms and activities taken by the CIB key institutions in this country. As in the case of Moldova, the chapter presents the preliminary CIB results of the key institutions that have been involved in CIB programme and concludes with a summary at the end. The thesis closes with a conclusion part in which the main results from the preceding chapters are drown and the effectiveness and efficiency of the CIB programme in Georgia and Moldova are evaluated. The literature The thesis can build upon a substantial literature as there is a large research interest in the field of the democratization process through institution-building in the former Soviet countries as well as on the role of Europeanization process beyond Europe. However, to the best knowledge of the author, no other scientific work has so far focused on the CIB programme in Moldova and Georgia. In order to develop the theoretical framework of this thesis, used literature on new institutionalism theory and rational choice approach is the following: B.G. Peters, Theory in political science: the new institutionalism, Pinter 1999; B.G. Peters, Institutional theory: problems and prospects, Institute for Advanced Studies Vienna 2000; G.M. Hodgson, What are institutions, ‘Journal of Economic Issues’, Vol.40(1) 2006, pp.1-25; V. Lowndes and M. Roberts, Why institutions mattes: the new institutionalism in political science, Palgrave Macmillan 2013; R. Goodin and H.D. Klingemann, A new handbook of political science, Oxford University Press 1996; D. Diermeier and K. Krehbiel, Institutionalism as a methodology, ‘Journal of Theoretical Politics’, Vol.15(2) 2003, pp.123-144; R.A.W. Rhodes, S.A. Binder and B.A. Rockman (eds.), The Oxford Handbooks of political science, Oxford University Press 2006; J.G. March and J.P. Olsen, Rediscovering institutions: the organisational basis of politics, The Free Press 1989; K.A. Shepsle,

Studying institutions: some lessons from the rational choice approach, ‘Journal of Theoretical Politics’, Vol.1(2) 1989, pp.131-147 etc. Among the consulted studies referring to the framework of RCI in EU studies, respectively the Europeanization process promoted by the EU beyond its borders, the following works are to be mentioned: M. Pollack, The engines of European Integration. Delegation, Agency and agenda-setting in the EU, Oxford University Press 2003; M. Pollack, ‘Rational choice and EU politics’ in Handbook of European Union politics, K.E. Jorgensen; M. Pollack and B. Rosamond (eds.), Sage Publication Ltd 2006; M. Pollack, ‘The New Institutionalism and European integration’ in European Integration Theory, A. Wiener and T. Diez (eds.), Oxford University Press 2004; T. Borzel and T. Rise, When Europeanization hits home: Europeanization and domestic change, Robert Schuman Centre for Advanced Studies, European University Institute 2006; S. Hix, The political system of the European Union, New York Palgrave 2002; F. Schimmelfennig and U. Sedelmeier, The Europeanization of Central and Eastern Europe, Cornell University Press 2005; F. Schimmelfennig, Europeanization beyond Europe, ‘Living Reviews in European Governance’, Vol.7(1) 2012, pp.5-23. Among studies on the transformation system and transition process, relevant consulted publications include: S. Huntington, How countries democratize, ‘Political Science Quarterly’, Vol.106(4) 1992, pp.579-616; G. Gill, Democracy and post- communism: political change in the post-communist world, Routledge and Taylor and Francis Group 2002; J.J. Linz and A. Stephan, Problems of democratic transition and consolidation: Southern Europe, South America and Post-Communist Europe, The Johns Hopkins University Press 1996; K.Von Beyme, Transition to democracy in Eastern Europe, Palgrave Macmillan 1996; B. Jóźwik and T. Stępniewski, Transformacja, integracja i kryzysy w Europie Środkowej i Wschodniej, ‘Rocznik Instytutu Europy Środkowo-Wschodniej’, Vol.14(5) 2016, pp.11-21; J.M. Fiszer, Efekty transformacji ustrojowej i integracji państw Europy Środkowo-Wschodniej z Unią Europejską, ‘Myśl Ekonomiczna I Polityczna’, Vol.2(53) 2016, pp.97-124; R. Rose, Understanding post- communism transformation: a bottom up approach, Routledge and Taylor and Francis Group 2009. In addition, EU documents provided a significant contribution to the understanding of the role of the EU in the ENP regions and the EaP countries. Likewise, policy papers and reports on policy challenges within the ENP Eastern region from Centre for European Policy Studies (Belgium), Centre for Eastern Studies (Poland), IDIS Viitorul (Moldova),

Expert Group Think Tank (Moldova), Georgian Foundation for Strategic and International Studies (Georgia), Estonian Centre of Eastern Partnership (Estonia) have contributed significantly to an objective view of the challenges and opportunities that EaP countries face.

Chapter I Theoretical perspective of institutionalism and Europeanization of institutional approach

This chapter sketches the theoretical background of new institutionalism by outlining the concept of institutions in the classical political theory, as well as one of the main approaches of new institutionalism namely rational choice institutionalism (RCI). As Guy B. Peters points out ‘the roots of political science are in the study of institutions’ (Peters 1999: 2). The institutional approach describes the general context in which institutions have developed and acted respectively the limits of their actions. The analysis of the concept of institution will further contribute to the understanding of the functions of institutions in the society, i.e. what factors led to the development of institutions and what were their main weaknesses. This chapter studies RCI analysis and examines, briefly the core assumptions of the approach to the study of the EU and identifies the actors that choose rational strategies as well as norms and rules that are regarded as instrumental tools with applicability to the Eastern Partnership (EaP) in Georgia and Moldova, which are the object of study in this thesis. It is considered useful to analyse the process of transformation during the transition period in Moldova and Georgia, as former Soviet countries, because the ‘legacies of the past’ persist to some extent. To different degree, communist heritage limited the development of state institutions as well as the impact of the EU as regional actor. For this reason, the Europeanization approach will be used here, focusing on institutional-building.

1.1. Theoretical delimitation: institutional theory, theory of institutions and institutionalism

The study of the concept of institutions has a long history. Traditionally it has constituted a dominant theoretical paradigm in political science. In antiquity, political philosophers have focused on the nature of governing institutions, the behaviour of individuals and the role of institutions in society. Political philosophers like Plato, Aristotle, Niccolo Machiavelli, Jean Jacques Rousseau and Thomas Hobbes contemplated which political institutions produce the best type of society and individuals (Rothstein 1996: 136). For instance, Plato’s Republic is a comparison of different forms of

21 government such as oligarchy, democracy or tyranny. Aristotle’s Politics focused on the political institutions and ‘good’ society, trying to find the ideal form of government. Aristotle pointed to the necessity of establishing distinct institutions on the governmental level: deliberative authority, executive authority and judiciary (Rothstein 1996: 136-137). The English philosopher John Locke analysed political institutions using the contractarian concept, thus developed ways toward more democratic structures (Peters 1999: 3). Montesquieu identified in his works the balance in political structure on the example of the American doctrine of separation of powers. The idea of separation of powers led to the weakening of autocratic governments. It can be therefore observed that political thinking has one of its main roots in the analysis and design of institutions (Peters 1999: 3). For analysing institutions evolving in time, it is necessary to consider the behaviour of political actors and how actors’ choices are influenced by incentives, perception and constraints within institutions. In social science, the theory that analyses institutions and their actions is called institutional theory (Diermeier and Krehbiel 2003: 127). According to Richard W. Scott, institutional theory is a theoretical framework that analyses organizational phenomena of institutions and explores institutions from different levels, from micro interpersonal interactions to macro global frameworks (Scott 2004: 2). Institutional theory considers processes and institutional structures which include rules, procedures, norms, routines and schemes that are fundamental in explaining the social world and establishing authoritative guidelines in social behaviour. Institutional theory explores how these elements are created, adopted over space and time and how they decline (Scott 2004: 1; Lawrence and Shadnam 2008). A distinction must be made between institutional theory, theory of institutions and institutionalism. Institutional theory focuses on the relationship between institutions, behaviour and outcomes. Following Daniel Diermeier and Keith Krehbiel, institutional theory might be characterised by four important aspects: - defines and maintains fixed behavioural norms for political actors within the collective choice setting to be studied; - characterizes formally the institutions in effect; - deduces the behaviour that arises within the institutional setting given the behavioural norms and characterizes the outcome that result from the behaviour; - compares the derived implications with empirical regularities and data (Diermeier and Krehbiel 2003: 127).

Theory of institutions analyses why some institutional features came into existence and persist, while others are either ‘non-existent or transient’ (Diermeier and Krehbiel 2003: 130). A theory of institutions cannot exist without institutional theory. In order to understand why a certain institution exists, it is important to know not only the results this institution produces but also the consequence of actions of possible alternative institutions (Ivanica 2006: Diermier and Krehbiel 2003). Institutionalism is understood as a general social science approach which is focused on ‘the study of political institutions, a set of theoretical ideas and hypotheses concerning the relations between institutional characteristics and political agency, performance and change’ (March and Olsen 2005: 4). Institutionalism has continually evolved and developed in two main phases. The first one, from 1930s to the 1970s, focused on ‘the process of exploration and rediscovery’, and is referred to as ‘old institutionalism’. The second one, from the 1980s to the late 1990s is ‘concentrated on different divergences and division’ ‘new institutionalism’ developing in different areas. Furthermore, there are three important schools of new institutionalism namely, historical, rational choice and sociological. Since around 2000s, a new phase seems to took shape. It is characterised by ‘convergence and consolidation’ and is focused on consensus but also significant dilemmas (Lowndes and Roberts 2013: 18-22).

1.2 New institutionalism in EU studies: current debates

From old institutionalism to new institutionalism Generally, old institutionalism has studied formal institutions of the government and the system of drafting legislation. In the framework of traditional or old institutionalism, institutions were considered as legal and the study of institutions was focused on how rules appeared, how they shaped the behaviour of actors, and in which way the rules serve a common good (Chifa 2011: 12). Subsequently, political science took elements from different disciplines such as economy, social psychology and cognitive psychology and formed the fundament of a new trend ‘behavioural revolution’. This trend has occurred after studies and many real life examples showed that there was some discrepancy between individual behaviour and formal rules. People do not always accept rules and informal groups often become more influential than structural organizations (Chifa 2011: 13).

In the early stages of the development of political science and public administration, the ‘old institutionalism’ has been described as the ‘historic heart’ of the discipline (Lowndes and Roberts 2013: 23; Mouritzen and Svara 2002: 16). Guy B. Peters (1999) pointed out five assumptions in the old institutionalism: legalism, structuralism, holism, historicism and normative. Under the legalism, the law is the central element of governing and constitutes the framework of the public sector itself, as well as the way through which the government influences the behaviour of its citizens (Peters 1999:6). Legal institutionalists thought that the law has the capacity to develop a logic of appropriateness, which is considered the fundamental logic in political institutions and is focused on rule-based actions. This means that individuals act according to rules that are recognised and accepted by all. From an old institutionalism perspective, the presence of law was fundamental in a state. It was also argued that the domination of law in a state was important in socializing new generations into a way of life based on civic responsibility and commitment to the state (Peters 1999: 6-7). Under the structuralism, the structure of institutions matters. Structure determines the behaviour of individuals. The structuralism of old institutionalism focused on the institutional features of political systems. The scholars tended to compare whole systems rather than to analyse individual institutions such as legislature (Peters 1999: 8-9). Under the holism, old institutionalist scholars were inclinded to treat government as suis generis, even though comparisons sometimes are made with other countries. Under the historicism, old institutionalists usually had a historical foundation in their analysis. According to Peters (1999: 9-10), institutionalist scholars analysed how contemporary political systems were embedded in their historical development and in their socio-economic situation. The last assumption of old institutionalism had its basis in normative structure. Typically, old institutionalist scholars express a concern in their works for good government (Peters 1999: 9-11). To sum up, old institutionalist scholars pointed out a series of different factors that highlight the importance of studying and analysing institutions in political science. Old institutionalism is still relevant in empirical research where formal rules and organisations are the objects of study. In this way, the main interest of old institutionalism is to understand and explain political life and its outcomes in the way that it is institutionalised through formal rules and organisations (Hysing and Olsson 2018: 24). Old institutionalism has continued to hold a central role in political analysis. However, there are some limitations to this approach in the context of ‘empirical changes in the workings of politics and governance’. Old institutionalist scholars have to adapt to new tendencies of

‘governance through networks and coalitions’ and ‘dynamics of rapid institutional change’ (Lowndes and Roberts 2013: 26). The second phase of the institutionalism approach the early 1980s to the late 1990s is the so-called ‘new institutionalism’ that reflects many features of the old institutionalism version. However, new institutionalist scholars developed a new perspective and advanced the study of new ‘political’ institutions using a number of new theoretical and empirical directions (Peters 1999: 1). The new institutionalism approach appeared over time in political science. Some social scholars considered the new institutionalism or neo- institutionalism as a scientific revolution (Lane and Ersson 2000: 23). It is generally considered that new institutionalism was developed by James March and John Olsen, who argued that it was time to move the discussion about the role of institutions back to the centre of political science, in a move that was directed against behaviourism. They characterised institutions in a more autonomous and independent way. The scholars claimed that bringing the analysis of institutional research to the forefront is needed due to the modern transformation of society. Political, social or economic institutions have become more complex and more important for daily life. Furthermore, the interest in the rediscovering of institutions was not only due to developments within political science, but also to new trends in public law that focused on contracts, hierarchy, professional codes and social norms (March and Olsen 1989: 2). The new institutionalism approach was used by scholars from different disciplines such as political science, sociology, European studies and international relations focusing on different aspects such as rational choice, historical context and constructivism, and was therefore interpreted in diverse ways. For instance, Rosemary Taylor and Peter Hall noted that the new institutionalism, in all its forms (historical, rational choice and sociological)3,

3 Apart from these well-known types of new institutionalism, there are at present even more variants of new institutionalism that were developed by new institutionalism scholars from different disciplines. For instance, normative institutionalists study how the norms and values embodied in political institutions shape the behaviour of individuals. See: J. March and J. Olsen (1984) The New Institutionalism: Organisational Factors in Political Life, ‘The American Political Science Review’, Vol.78(3), pp.734-749; J. March and J. Olsen (1989) Rediscovering Institutions. The Organisational Basis of Politics, The Free Press. Empirical institutionalists most closes resemble the ‘traditional’ approach, classify different institutional types and analyse their practical impact upon government performance. See: G. Peters (1996) ‘Institutionalism Old and New’, In A New Handbook of Political Science. Goodin, R. and Klingenmann, H. (eds.), Oxford University Press. International institutionalists show that the behaviour of states is steered by the structural constraints (formal and informal) of international political life. See: V. Rittberger (1993) Regime Theory and International Relation, Oxford University Press. Network institutionalists show how regularized, but often informal, patterns of interaction between individuals and groups shape political behaviour. See: D. Marsh and R. Rhodes (1992) New Directions in the Study of Policy Networks, ‘European Journal of Political Science’, Vol.21(1-2), pp.181-205. Feminist institutionalists study gender norms operate within institutions and how institutional processes construct and maintain gendered power dynamics. See: M. Kenny (2007) Gender,

‘plays an important role in the determination of social and political outcomes’ (Hall and Taylor 1996: 5). On the one hand, Diermeier and Krehbiel saw new institutionalisms mostly as a method (2003: 133). On the other hand, von Beyme pointed out that new institutionalism might be seen as an approach that ‘observes actual behaviour instead of legal and formal aspects of political behaviour which prevailed in older theories’ (von Beyme 2006: 753-754). Roderick A. William Rhodes specified that new institutionalism is seen more as a perspective on politics than a theory. He argued that new institutionalism is composed ‘of diverse strands, building on different and probably incompatible intellectual traditions, united only in the study of political institutions and their commitment to modernist-empiricism’ (Rhodes 2006: 93). Robert Pocciotto and Eduard Wiesner saw new institutionalism as a new paradigm for institutional development (Pocciotto and Wiesner 1998: 27). It can be summarised that new institutionalism has the following prepositions: - individuals or groups of actors act in a context that is collectively constrained; - constraints take the form of institutions where rules and norms are constructed that shape the behaviour of those who have specific roles; - restrictions are advantageous to individuals that pursue their own projects or activities; - contextual factors that constrain individuals or group of actors actions shape desire, preferences, and motives; - constraints preserve and divide differential power resources with respect to different individuals or actors interest (Goodin 1996: 19-20). New institutionalism has used many characteristics of the old institutionalist thinking. However, while behaviourism has appeared as a reaction to old institutionalism, new institutionalism was in turn a reaction to behaviourism. In general terms, the main difference is that whereas old or traditional institutionalism did not go much beyond analysing the formal powers and structures of decision-making institutions, new institutionalism sees institutions in a very broad sense and incorporates a wide range of formal and informal procedures, practices, relationships, customs, and norms (Rhodes 2006: 93; Peters 1999: 1). As it was mentioned, new institutionalism emphasised and re-established the importance of studying institutions. In political science, this approach has focused on the

Institutions and Power: A Critical Review, ‘Politics’, Vol.27(2) pp.91-100; V. Lowndes and M. Roberts (2013) Why institutions matter. The new institutionalism in Political science, Red Globe Press.

26 understanding and improvement of political systems. In this context, some reasons for the renewal of interest in institutions were identified. Firstly, social, political and economic institutions become more complex, resourceful and more important for collective life. Secondly, there was an interest in the ‘state’ in a number of schools of political analysis. Thirdly, institutional factors played an important role when they explained why different countries had different reactions or answer to the geopolitical challenge of the 1970s and 1980s such as the oil crisis and rising unemployment. Fourthly, different challenges from the late 1970s have led to institutional restructuring, influencing and trying to reduce the role of state and involving considered reform in the public sector (Bell 2002: 4). Moreover, new institutionalism refers to a general perspective concerning the study of political institutions and theoretical ideas and hypothesis, which on the one hand describes the relations between institutional characteristics and policy actions, and on the other hand analyses the relation between collective behaviour, institutions and results (Olsen 2007: 2). Klaus Von Beyme notes that new institutionalism analyses institutions and their impact on the policies and not just studies the institutions (as in the case of old institutionalism) (von Beyme 2008: 753). Within this approach, institutions establish their policies as well as create elements of order and predictability. In this context, institutions provide appropriate behaviour and affective ties among actors. Moreover, institutions within this tradition, exercise legitimate control, redistribute power and produce rules and identities that make them independent from external influence (March and Olsen 2008: 8). To conclude, new institutionalism differs from old institutionalism in three aspects: First, new institutionalism scholars have included in their work informal aspects such as norms, ideas, networks, and coalitions. Second, new institutionalists have a critical view on the way how institutions work in practice. Third, even if scholars of new institutionalism concede that institutions constrain individual behaviour, they argue that actors are relevant in relation to change and stability of institutions (Hysing and Olsson 2017: 26-27).

Rational Choice Institutionalism - main assumptions The RCI approach was developed at the same time as the historical institutionalism one. However, there are specific distinctions. RCI has two sources, one in political science and the other in economics. This approach has been influenced by many new developments within social sciences, for instance, how decision rules affect outcomes when groups come together and aggregate individual preferences in shaping outcomes. The role of institutions in this approach is share stable outcomes, so-called equilibria (Lane and Ersson 2000: 35).

RCI had roots in the studies of American political scientists. Their main goal was to understand the origins and effects of US Congressional institutions. The RCI scholars asserted that in formal institutions of decision-making, policy choices are unstable and ‘cycling among multiple possible equilibria, with no single policy able to command a lasting majority among legislators’. Nevertheless, the House and Senate, if referring to the American policies, were often able to agree on stable policies. In this context, Congressional institutions produce ‘structure-induced equilibrium by ruling some alternatives as permissible or impermissible and by structuring the voting and veto power of various actors in the decision making process’ (Pollack 2008: 2; Riker 1980: 433). It can therefore be said that RCI analyses the ways in which institutions shape, channel and constrain the rational actions of political actors (Nugent 1999: 516). Guy Peters saw institutions under RCI as ‘aggregations of rules with members of the organizations - or institutions - agreeing to follow those rules in exchange for such benefits as they are able to derive from their membership within the structure’ (Peters 1999: 47). According to researcher, the rationality component of actor’s behaviour of this approach is that individuals can receive some benefits from the affiliation of institutions and as result, they try to ‘sacrifice some latitude of actions in order to receive those benefits’ (Peters 1999: 47). Hall and Taylor (1996) distinguished four features of this approach. The first feature uses use a set of behavioural assumptions. The relevant actors have a set of preference, usually with precise conditions. The second sees politics as a series of collective action dilemmas. For example, when individuals act to achieve their own preferences, the results that they can achieve are collectively minimal. What prevents the actors from undertaking collective action is the absence of institutional commitments to ensure complementary behaviour by others. Examples of this are ‘prisoner’s dilemma’ and ‘tragedy of the commons’. The third characteristic focuses on the role of strategic interaction in the determination of political outcomes. Thus, a strategic calculus drives the actor’s behaviour and this calculus will be affected by the actor’s expectations about how others are likely to behave as well. In this context, institutions coordinate such interactions by providing information and specific mechanism that could reduce incertitude of actors and allow ‘gains from exchange’. Thus by these actions the actors are leading towards better social outcomes. The last feature emphasises the origins of institutions. The RCI scholars explain the origins of rational institutions by referring to the value of functions which an institution fulfils, and respectively on the result of those actions on the actors.

This presumption assumes that actors create institutions for developing these values, which led to the ‘grains from cooperation’ which have been developed in the features above (Hall and Taylor 1996: 12-13). The RCI approach emphasises the reasons and behaviour of actors. As the name suggests, RCI assumes that actors are rational. According to Stephen Bell, a ‘rational agent or actor’ is one who came to a situation with specific preferences, beliefs and the capacity ‘to apply the data intelligently’ (Bell 2002: 5). Within RCI, actors are considered to be selfish. It is assumed that their primary motives are self-interests, whereas their preferences are determined by the institutional context. Furthermore, rational choice institutionalists claim that institutions within RCI are built by individuals or actors for rational purposes and the role of these actors is to shape and change the institutional environment to realise their individual goal (Bell 2002: 5-6). RCI stresses the following characteristics of institutions. First, institutions within RCI are conceptualised as ‘exogenous constraints, or as an exogenously given game form’. Within this game, there is a scenario wherein the main actors are named and their specific behaviours and strategies are outlined. The actors choose rationally to be constrained by institutions because they understand that their goals may be realised better if they are controlled by institutions. Hence, they accept information from the institutions when they make selections. This means that behaviour of the actors is controlled or shaped by institutions. The outcomes result from a combination of actors’ choices. Finally, there is an evaluation of the whole process within institutions. The main assumption of the rational choice approach is that the main reason or motivation of individuals is the maximising utility of their actions. However, there is a misunderstanding in this preposition of the rational choice approach about situations when individuals from rational institutions develop their preferences or identities in specific important political situations (Peters 1999: 44; Shepsle 2006: 26-27; Green and Shapiro 1994: 14-17). The second preposition of institutions within RCI does not take institutions as given exogenously. In this context, the actors choose the way in which the players want to play. If a decisive player wants to play according to different rules, then the rules are not in equilibrium and the ‘institution’ could become fragile (Shepsle 2006: 26). Rational choice is one of the main approaches to the study of international relations and global governance. Generally, it has played an important role in political economy and it has used mathematical technics that led to a very abstract model (Snidal 2013: 84-85; Tamm and Snidal 2014).

The RCI approach focuses on three important challenges that will be addressed in this thesis using the case study of the Comprehensive Institution Building (CIB) programme. The first one is the general problem of change. This means that the rational choice approach proposes some methodological limits to incorporating change and as result can address important issues of change in the international setting. The second one is the identification of preferences and explaining them, as well as the actors that apply the changes. More importantly, rational choice can adapt its assumptions according to the preferences of actors or institutions. The third one focuses on integrating normative concerns. For instance, actors may be states, international organisations, NGOs, or individuals. Their objectives are diverse, such as development aid, human rights, rule of law or democratisation. In this way, the rational choice approach is a very flexible framework for different actors’ choices and can focus on how the actors behave in different situations (Snidal 2013: 84-85; Tamm and Snidal 2014: 133). As a result, rational choice is not a closed system in this process but rather a continuous process of change. According to Adriene Hertier, RCI for institutional change may be divided into three approaches. First, the functional or intentional approach sees institutions as an efficient solution to a particular collective action problem. Second, the rational or non-intentional evolutionary approach sees the result of institutional change as a selection and adjustment process. Third, a power-based political bargaining approach considers distributional outcomes in order to account for institutional change. Within this approach, actors have specific as well as diverse roles and functions. For instance, the role of actors under the individual rationality assumption is to be self-interested, and their aim is to be oriented to engage in different interactions with other actors. Actors are interested to assess the outcomes of various strategies or activities. Actors under the functionalist and the distributive bargaining-oriented approaches choose institutional rules with intention, while the actions of actors under the evolutionary approach are based on assumptions of non-intentionality (Hertier 2007: 10-11). To sum up, rules, routines and norms are instruments of stability within process of institutional change. This means that the process of change within a rational institution is a constant feature that indicates how institutions emerge and work. The key to understand the dynamics of change is to clarify the role of institutions within the whole process of change.

Institutions in New Institutionalism: concepts, typology and approaches The conceptualisation of institutions is a complex and multidimensional phenomenon. Institutionalist scholars pointed out that the concept of institution should be analysed as a process or set of processes which shape behaviour and do not analyse or conceptualise institutions per se. Institutionalist scholars assumed that institutions matter in the study of social science. The main reason why institutions matter is that laws, customs and practices in institutional settings can play an important role in shaping behaviour of individuals or collective actors. Based on this, it can be understood that when analysing an institution it is important to focus not only on formal institutions but also on informal routine or relationships (Bell 2002: 1). Margaret Levi (1990) specified that institutions are sets of durable and formal rules that distribute resources of power, constrain the choice of the personnel, citizens or actors within institutions and have internal enforcement mechanisms (Levi 1990: 405). In Levi’s view, institutions may differ in ‘the number of actors the rules encompass, the behaviour covered by the rules and the extent in which internal institutional enforcement rests on the power of an external institution such as the state’ (Levi 1990: 405). Levi noted that to understand institutions means to know how they represent concessions of power by one group of actors to at least one other individual in order to resolve or to offer solutions for major conflicts among strategic actors (Levi: 406). While Levi argues that institutions both create and contain power, Peter Hall notes that the process of policy-making affects the degree of power that actors have over policy outcomes. In this context, organisational position influences actors’ definitions of their own interests, by establishing institutional responsibilities and relationships to other actors (Hall 1986: 19-20). Elinor Ostrom saw institutions as a place where individuals establish different forms of repetitive and structured interactions including those within families, markets, firms, churches and governments at all levels. In Ostrom’s view, actors who are interacting in rule-structured situations face choices regarding the actions and strategies they take, leading to consequences for themselves and for others (Ostrom 2005: 3). Contrary to Ostrom, Geoffrey Hodgson argued that the main characteristic of institutions is their behaviour. In his view, institutions would not exist if the behaviours would be interrupted (Hodgson 2006: 3). Hodgson analysed the concept of institutions focusing on rules that structure social interaction. Generally, institutions both constrain and enable behaviour. Within institutions there are rules that imply constraints. According to the researcher, rules

31 are understood as a socially transmitted and customary normative order. Furthermore, they include norms of behaviour and social convention. The rules are very well organised, so that the relevant actors share knowledge of these to other actors or individuals. This does not mean that the presence of regulation and constraints leads to a reduction of freedom. In some cases, the regulation could be an ally of freedom. Respecting rules within institutions, is an important criterion of codifiability. This meant that when the rules are breached or not respected, this can be explicitly identified (Hodgson 2006: 2-3). Jan E. Lane and Svante Ersson distinguished two perspectives in the conceptualization of institutions. In the first one, institutions are seen as rules that shape the behaviour of actors and apply sanctions, for instance when a set of norms must be institutionalized in an institution. In the second one, institutions are seen as systems of behaviour of actors that are coordinated by a set of rules, for example when there is an activity organised by institutions. Hence, in the view of Lane and Ersson, institution is associated with other key terms in social science such as ‘rule’, ‘behaviour’, ‘practice’, ‘organisation’ and ‘order’. Institution may be defined either as a norm or as an organization or as a system of offices (Lane and Ersson 2004: 23). Jeffrey B. Nugent has a similar view and according to him, institutions are rules that affect behaviour, constraining actions, providing incentives and making social live more or less predictable (Nugent 2006: 167). From the definitions provided above, it can be summarised that institutions’ activities are based on a set of rules and predictions how these rules affect the behaviour of actors and as a consequence their social and political actions. These definitions and concepts about institutions analysed by different institutionalists start with one of the two ideas: institutions are seen either as rules or as organisations. As it was mentioned at the beginning of this chapter there is no established definition of institutions. In the process of analysing the concept of institution it has been observed that the term of institution appears with some ambiguity that refers either to norms or to organisations. In a nutshell, organisations act, but rules are never supposed to be actors or to have preferences. The parliament, the government and the Supreme Court are seen as ‘political institutions’ and behaviour in this kind of institutions is supposed to be deeply institutionalised. What may distinguish these institutions from other organisations for example, are their rules, because the rules are what separate institutions from each other (Lane and Ersson 2000: 26). Taking into account the different concepts of institutions analysed above, it can be identified a typology of institutions. Particular attention will be put on political institutions

32 and its approaches. Economic and social institutions are interconnected with each other and have mostly been studied in historical sociological and normative institutionalism. According to Andrew Schotter, the function of social institutions can be observed only by ‘viewing economic problems in an evolutionary light’. In this context, each problem creates the ways for adaptive solution and it is the social institutions that intervene. Schotter explains that every ‘evolutionary problem requires a social institution to solve it’ (Schotter 1981: 1-2). This thesis is proven by an example that Schotter developed namely the problem of multilateral exchange in neoclassical economic which is solved by the creation of competitive markets. In this context, the evolutionary feature of these institutions is required. As a consequence, the societies which create a set of social institutions, and evaluate over time, survive and flourish, while societies that do not fail or die. The reason that social institutions should evolve and adapt is that features that are shaped to solve present issues may become inadequate as time passes. Thus, it should be adaptive tools in societies, because otherwise societies cannot survive (Schotter 1981: 2-4). In a historical institutionalism view, a social institution is a ‘complex of norms of behaviour that persists over time, by serving collectively valued purposes’ and ‘shapes the patterns of interaction among human beings’ (Nabli and Nugent 1989: 7-8). In summary, social institutions focus on the behaviour of actors as well as their actions which are coordinated by specific rules and resulting in satisfying collective necessities. These types of institutions are quite known in sociological or normative institutionalism. Douglass North, a prominent American economist, analysed economic institutions. In his approach, he focused on ‘institutions that consist of both informal constraints such as sanctions, customs, traditions and formal rules such as constitutions, laws, propriety rights etc’ (North 1991: 97). He specified that human beings have created institutions in order to create stability and reduce uncertainty in society (North 1991: 97). Formal rules and informal constraints led to the rules for human interaction within institutions. Informal constraints provide conventions that are developed as solutions to the problems that could appear within institutions. All parties or actors are interested in respecting and maintaining norms of behaviour that are recognized codes of conduct or self-imposed codes of conduct such as standards of honesty or integrity. Informal constraints are important because they complement and reinforce the formal rules (North 1990: 385; North 1991: 63). In his view, rules are not seen as actions or behaviours that can be respected and strictly followed. Vernon W. Ruttan and Yujiro Hayami noted that within economic institutions,

33 rules have the role of creating a connection between people and institutions. They contended that ‘institutions are the rules of a society or of organizations that facilitate coordination among people by helping them form expectations which each person can reasonably hold in dealing with others’(Ruttan and Hayami 1984: 3-4). Furthermore, according to them, institutions ‘reflect the conventions that have evolved in different societies regarding the behaviour of individuals and groups relative to their own behaviour and the behaviour of others’ (Ruttan and Hayami 1984: 3-4). In political science, institutions matter more than individual characteristics in determining the behaviour of individuals or group of actors. In this way, political institutions use structural elements to understand the behaviour of their actors or individuals. Institutions within political science could be understood as formal structures like a parliaments as well as ‘amorphous entities’ like social class (Peters 1999: 27- 28). Institutions as formal structures are seen as collection of norms, rules and routines. In other words, political institutions are ‘collections of interrelated rules and routines that define appropriate actions in terms of relations between roles and situations. The process involves a determining situation, the role that is fulfilled, and the obligation of the role in the determining situation’ (Peters 1999: 28). Political institutions are collections of rules and routines that show the main actions or activities in terms of relation between actors’ role and different situations. According to Johan P. Olsen, rules within institutions, mean ‘routines, procedures, conventions, roles, strategies, organizational forms and technologies around which political activity are constructed’ (Olsen 2007: 22). Rules are selected and with their help, institutions could initiate or provide procedures. Political institutions ‘are defined by their durability and capacity to influence behaviour for generations’ (Peters 1999: 28-29). The most important features of political institutions is that they have a ‘logic of appropriateness’ that influences actors’ behaviour more than a ‘logic of consequentiality’ that shape individual action. This means that if a political institution has the capacity to influence the behaviour of its members, its members will be more attentive and effective in the kind of actions that are applicable to the specific norm of the institution or organization as well as to the consequence for both the institutions and for them (Peters 1999: 28-29). The actors’ behaviour will be ‘intentional but not wilful’ especially in a situation when they are motivated by the values of the institutions. This means that individuals will make choices that are established in the institutional parameters. Hence, this will induce for

34 monitoring behaviours and will be reinforcing the views of appropriateness (Peters 1999: 29). Elaborating on the concept of political institutions two main characteristics can be distinguished: rules and routines. The next step is to understand the connection between these two features and why these components are important for a political institution. Routines are supposed to make actors’ behaviour in institutions more predictable and more rational (Peters 1999: 30). Regarding rules, March and Olsen argued that the foundation of an institution is rules, and rules are connected through ‘identities, through senses of membership in groups and recognition of roles’ (March and Olsen 2008: 10). The main aim of rules is to establish norms, expectations and resources as well as to provide explanation and in the same time justification for the presence of rules within institution (March and Olsen 2008: 10). Norms set up actions in accordance with resources and capacities available in an institution or organization. Regarding individuals, they may or may not know what sort of rules exists in institutions and that may or may not create specific actions in specific situations. There are competing rules and competing interpretations of rules or situations. This could be explained by the fact that the legitimacy of democratic political institutions is more or less based on the individuals or actors’ expectations (March and Olsen 2008: 10). Even if norms are not the most important component in the understanding of political institutions, it is necessary to take into account that norms are part of the controls within institutions or organisations (Peters 1999: 30). March and Olsen consider that norms are the nucleus of an institution. Institutions follow their ‘logic of appropriateness’ in the society where they were formed. Thus, individuals or actors who became part of the institution are ‘pre-socialised by their membership in society’ (Peters 1999: 31-32). There are norms such as reciprocity, honesty and cooperation that are important for individuals or actors which have already been learned as a general socialization process that is specific for each society. Routines seem to become more natural from the moment when people start to have an interaction in ‘a proto-institutional setting’. The main aim of routines is to minimize the decision making cost for individuals that are members of an institution. Institutions develop specific routines and then implement these routines in the development of political institutions. Routines show also the nature of the institution because different departments may have specific actions for individuals that are part of the institution (Peters 1999: 32). According to Bo Rothstein, political institutions are considered as ‘the rules of the game’ (Rothstein 1996: 145). There is a difference between formal and informal rules. In general,

35 people respect and follow both without being aware of them. These kinds of rules are known as routines, customs, decision styles, habits, social norms or culture (Rothstein 1996: 145). The concept of institutions in the new institutionalism can be analysed from three main approaches: institutions-as-equilibrium, institutions-as-rules and institutions-as- norms. The first perspective, institutions-as-equilibrium, emphasises stability in institutions which derives from the fact that actors optimize their preferences and behaviours (Ostrom and Crawford 1995: 582). The main characteristic of the institutions-as-equilibrium approach is the behaviour of actors as well as the expected actions of other actors that can guide individuals how to act in specific situations (Greif and Kingston 2011: 26). Institutions are seen as behavioural patterns or regularities that must be agreed by all members of a society. Regularities can be described as ‘non-cooperative equilibria of strategic games because out of equilibria actions are unstable and are unlikely to be repeated in the course of many interactions’ (Greif and Kingston 2011: 26). This approach focuses on the appearance and persistence of foundational institutions like democracy, rule of law and the understanding of weakly institutionalized settings. In Kenneth A. Shepsle’s interpretation, institutions are viewed as simple equilibrium ways of doing things. The scholar argues that if the decisive player wants to act according to different rules, then the rules are not in equilibrium and the institution becomes fragile or could even fail (Shepsle 2006: 26-28). Once an equilibrium has been found, the next step is to examine how different actions can change the set of self-enforcing expectations by changing responses by other actor-players to particular actions. For instance, a new institution or authority could introduce a new actor with the ability to punish or reward players. In the next step, it can be observed how the new actor could changes people’s expectations in different ways. Sanctions can be coercive, social or economic. The institutions-as-equilibrium approach focuses on how such expectations are formed, why they are formed and to what effect (Grief and Kingston 2011: 26-27). In a nutshell, in this approach, all actors are motivated to produce a particular equilibrium, so that the institutions act regularly and in a foreseeable way. The second one, institutions-as-norms approach for organizational analysis is based on two aspects: firstly, focusing on the relevance of norms, and secondly considering institutions as tools that form the framework for individual or group of actors in different processes (Bolfikova 2012: 90). Ostrom and Crawford pointed out that the main

36 assumption of this approach is that the models of interaction are based on the shared perceptions among a group of individuals of proper or improper behaviour in specific situations within institutions (Ostrom and Crawford 1995: 583). The third approach is institutions-as-rules. As it was mentioned in the typology of institutions, according to North, institutions are seen ‘as rules of a game in society’ including formal rules such as constitutions and laws enforced by the state (North 1990: 3). North continues to explain that institutional constraints include the prohibition of doing something by an individual as well as conditions that determine when individuals can act or undertake some activities (North 1990: 4). Informal constraints, according to North, include codes of conducts, norms of behaviour and conventions that are enforced by the actors of the relevant group (North 1990: 36-37). This approach also studies rules under which institutions can facilitate economic growth. What makes them important for institutions is that accountancy rules foster transparency and trust between institutions and for citizens. For instance, bankruptcy rules reduce uncertainty when businesses fail, property rights encourage investments etc. The importance of this approach is that individuals follow rules and as a result they avoid obstacles. Rules are closely related to policy and may be designed and implemented by an authority or by issuing laws (Hindriks and Guala 2014: 4). Within this approach, the application of rules involves enforcement costs. Formal and informal rules establish the institutional structure within which interactions occurs. Thus, the institutions-as-rules approach uses a rational choice perspective to study the formation of institutions (Greif and Kingstone 2011: 14).

New Institutionalism in EU studies This part focuses on how new institutionalism was applied in European studies. New institutionalism was ‘imported’ into European studies at the beginning of the 1990s and has been applied with success to the study of the European Union (EU) as a polity and to European integration as a process. It became more known in the study of EU governance, the EU institutions on different levels, as well as in the process of EU integration. All three new institutionalism approaches that have already mentioned namely historical institutionalism, RCI and sociological institutionalism have been used by EU scholars. They argue in their studies that institutions matter in understanding EU politics and explain how these institutions matter (Pollack 2008: 1-3).

The main assumption of new institutionalism in EU studies is that institutions not only matter in understanding the policy making of the EU, but also explain how they are significant (Bache 2014: 25). The EU is one of the most institutionalised political systems in the world, with a complex network of intergovernmental, supranational and non-state actors producing a set of legal regulations – the EU’s, so-called acquis communautaire (Saurugger 2013: 79). Within the process of European integration, the EU has focused on spreading and promoting of democracy, respect of human rights, rule of law and European and democratic values. The EU promotes these values not just in the EU Member States but in the neighbourhood countries as well. Mark A. Pollack states that ‘the new institutionalism reflects a gradual and diverse re-introduction of institutions into a large body of theories’ (Pollack 2008: 2). Another prominent EU scholar, Neil Nugent, focuses in his studies on theorising the functioning of the EU. According to him, the main difference is that whereas old institutionalism does not analyse or focus on formal power and structures of decision-making institutions, new institutionalism sees ‘institutions in a very broad sense to incorporate a wide range of formal and informal procedures, practices, relationships, customs, and norms. As such, new institutionalism is more all-embracing and expansive in its concerns and interests’ (Nugent 1999: 516). Nicu Popescu interprets new institutionalism in the EU studies differently. Popescu points out that states may be in a strong position, trying to maximise their interests, and in the same time may develop political and institutional reforms that transform fundamentally their positions. These theories argue the importance of EU member states pursuing on EU foreign policies. However, the EU institutions do not have an independent role in this process. In this context, the EU institutions are considered variables that intervene in the preferences and political or economic results of the Member States. The institutionalist interpretation of the EU policies, for reforming or building of institutions, is generally considered to have stages: analysis of interests, policy making process, and role of the EU (Popescu 2013: 33- 36). Between EU member states, governments may appear divergences regarding the understanding of EU institutions and policies. These disagreements may occur for three reasons. Firstly, it may be because of different electoral systems. Secondly, governments might not take into account future, unintended consequences of institutional choices which they may or may not be able to solve through additional action. Thirdly, governments may want to change their actions in time, most obviously because of electoral turnover (Pollack

2010: 23). In this way, these limitations can shape the behaviour and preferences of EU member state governments.

Rational Choice Institutionalism and the European integration Although originally formulated and applied in the context of American political institutions, RCI has been ‘migrating’ to other international contexts and was quickly taken over by EU scholars (Pollack 2005: 362). The rational choice approach has ‘infiltrated’ in EU studies through the notion that human beings are self-seeking and behave rationally and strategically. The goals of political actors are organised hierarchically. Institutions do not diminish preferences, but will have an impact on the ways in which actors pursue those preferences. For instance, regarding the EU, changes in the institutional rules such as the introduction of the co-decision procedure to the voting rules in the Council might make actors change their behaviour in order to realise their preferences (Rosamond 2005: 109- 111). Kenneth Shepsle argues that institutions are able to create a ‘structure-induced equilibrium’ by ruling alternatives permissible or impermissible and by establishing the voting power and veto power of various actors in the decision-making process. Thus Shepsle and other scholars focused their studies on ‘equilibrium institutions’. They analysed how actors choose or create institutions to assure mutual gains, and how these institutions persisted or changed over time. Furthermore, they have analysed the power of ‘agenda setting’ within institutions. Having as their basis the study of rational choice institutionalism in American politics, as it was mentioned, they have used a ‘transaction cost approach’ to study the design of political institutions. The scholars argued that the legislators’ design of political institutions minimises the transaction costs associated with the making of public policies. Even if this theory has at its basis the American political institutions, the approach of rational choice may also be applied to other international contexts, such as EU studies (Pollack 2010: 21-22). The EU rational choice researchers understood that often decision-making events were causing instability of policies. They focused on the institutional rule of the EU, and cooperation and co-decision procedures. The scholars pointed out that intergovernmental models of EU decision-making underestimate the importance of formal EU rules in shaping policy outcome. For instance, Fritz Scharpf has argued that the inefficiency and rigidity of the Common Agriculture Policy and other EU policies was due not simply to the EU’s intergovernmentalism but also to specific institutional rules such as unanimous

39 decision making. Thus, George Tsebelis, Geoffrey Garretts and other EU rational choice scholars tried to understand the EU institutions in rational choice terms such as adoption, enforcement and adjudication (Pollack 2010: 22-23). Ben Rosamon stated that the role of rational choice institutionalism in the EU is to analyse how the relative power of institutional actors is changing in the policy process. In this process, institutional actors seek policy outcomes that correspond to their preferences. In this logic, in rational choice institutionalism, institutions are created first. After that, the EU develops the agenda setting power of the various institutions. Rosamond explained that an important instrument of rational choice institutionalism is the application of principal agent to the EU policies. Thus, the self-regrading actors (principals) find that their preferences are best served by the delegation of certain authoritative tasks to common institutions (agents). In the EU case, this approach provides a powerful explanation for member states’ decisions to create and assign tasks to supranational institutions (Rosamond 2009: 109-113). With the plethora of researchers in Europeanisation and EU enlargement, RCI in EU studies started to generate hypotheses about the ways in which, and the conditions under which, EU norms and values are transmitted from ‘Brussels’ to the domestic politics of the various members states. Furthermore, rational choice theories have an important role in the studying of domestic and transnational behaviour of individuals, parties and organised interests (Pollack 2006: 36). RCI sees institutions as formal and informal rules that establish fundamental restrictions on actors’ behaviour. The actors in RCI calculate the ‘most reasonable way for the decision-maker to reach [their] goals, and assumes [that] this way will actually be chosen because the decision-maker is rational’ (Downs 1997: 4-5). Preferences are fundamental for RCI and they are divided in three ways. First, they are imputed to relevant actors. Second, preferences are ‘caused by historical processes’. This means that ‘historical development causes a particular set of preferences held by a given actor’. Third they are ‘induced by strategic circumstances and human interaction […] within institutions, and persuade an actor to possess a specific preference’ (Katznelson and Weingast 2005: 2-3). To sum up, for rational choice institutionalists the EU institutions are of central interest. Rational choice shapes in a foreseeable way both the process of EU decision- making and the outcomes that result from the long-term process of European integration. However, the EU institutions’ effects are visible regarding the incentives for different actors. For instance, the EU is known to apply ‘carrot and stick’ approach for the EaP

40 countries. This means that ‘carrot and stick’ incentives can shape the behaviour of institutions and actors from EaP countries.

Rational Choice Institutionalism and its applicability As it has been seen in the above subchapter, new institutionalism has been applied ‘with success to the study of the EU as a polity’ (Pollack 2008; Rosamond 2005; Nugent 1999). The purpose of this part is to analyse the applicability of the RCI approach to Georgia and Moldova. More specifically, rational actors (principal and secondary), formal and informal rules and actors’ preferences will be identified and will be explained in their function. In the context of the EaP countries in the case of Moldova and Georgia, the principal rational actor is the European Union (EU). The EU has established preferences with a large impact on the neighbourhood countries. The next principal rational actors are the Georgian Government and the Moldavian Government that have decided on reforms to be implemented, taking into account domestic preferences. The citizens of Georgia and Moldova are identified as secondary actors. They influence the ‘behaviour’ of the public institutions. The last rational actor, under this approach, is Russia, which may be interpreted as a secondary actor as well. Russia has a significant influence in both countries, as regional actor and as influencer of actors’ preferences. For the EU and the Moldavian and Georgian Governments as principal rational actors with decision roles, the procedure of institutionalization of formal and informal rules could be different. In this context, the formal rules are identified as CIB institutions in Georgia and Moldova (see detailed evaluation of CIB institutions in Moldova in the chapter IV and CIB institutions in Georgia in the chapter V). These institutions are analysed in respect of how they were established, transformed as well as on how their activities are regulated according to EU preferences and the acceptance by the Moldavian and Georgian governments. An important aspect that is taken into account in analysing CIB institutions in both countries is respect of rule of law, a major characteristic of institutions under new institutionalism. Informal rules are norms or conventions agreed by some groups of actors, or individual actors. In this context, the rule of law is not respected or is diminished. Generally, informal rules are characteristic for post-authoritarian regimes. Informal rules stop the development of democracy and the formation of strong institutions. Thus, informal

41 rules may be established by obscure groups or persons such as oligarchs or corrupted individuals who control institutions and undermine their activities. The Association Agreement (AA) between Georgia and the EU, the AA between Moldova and the EU, as well as the CIB Framework Document Georgia and CIB Framework Document Moldova are interpreted in this thesis as norms and conventions. Institutional procedures have an impact on the actors’ behaviours in the implementation of reforms. For instance, when the principal rational actors negotiated the norms and convention namely, AA and CIB framework documents, they were not able to predict how the AA will be implemented or which impact the CIB will have. This is because firstly, the actors have had different preferences that could lead to different results. Secondly, there was Russia as regional actor that stopped decision and preferences of actors which led to different results than expected. And finally, the presence of informal rules, as mentioned above, may influence the activity of formal institutions. As a result, formal institutions could stagnate in their development or even fail. The empirical application of RCI is addressed in the next chapters where the role of the EU in the EaP countries, the significance of the CIB programme and the impact of the AA, in Moldova and Georgia are described.

1.3 Conceptual dimension: transformation approach and institutional change

Delimitation: institutional change vs institutional design This subchapter presents a delimitation between institutional change and institutional design. There are different challenges when institutions change over time. Robert E. Goodin distinguishes three reasons why institutions change. Firstly, change in institutions can happen by pure accident. In this type of change there are no ‘forces of natural or social necessity at work’. There are no specific mechanisms that drive things. New changes in institutions might appear from the interactions of different institutions that result in unforeseen new types of institutions. For instance, the collapse of the Soviet Union led to the necessity of institutional change in the newly independent states. Due to the fact that these countries did not depend anymore on a centralised economy, they had to adapt to new realities. Secondly, change might be a matter of evolution. In this type of change, there are selective mechanisms. Institutions which pass through certain stages of development survive. This particular type of change may be applied as well for the newly independent former Soviet countries which went through typically long transition periods

42 to adapt their institutions and economy to democratic values. The last type of change is the result of intentional intervention. Here the role and contribution of the EU in transition countries can be seen in the spreading of democracy, the growth of economic interdependence and in the necessity of thoughtfully designed institutions. In reality institutional changes involve a combination of all these three types of reasons (Goodin 1996: 24-25; Rothstein 1998: 118). What is important in this context is to delimitate the concept of ‘institutional change’ from the one of ‘institutional design’. In ‘Institutional Design in Democratic countries’ Olsen argues that ‘developing political institutions of self-governance is a first- order political process and that human will, reason and power play a key role in institutional change’ (Olsen 1997: 204). ‘Design’ refers to the ‘construction of institutional configurations which are intended to achieve a particular purpose, and in which the designers have some continuing interest and involvement’. In this context, it is clear that the concept of ‘design’ is related to the principal agent model. On the one hand, the main goal is to create a set of rules which might be implemented and monitored in their efficiency and effectiveness. If there are aspects which need improvements it is possible to adjust the rules. On the other hand, regarding the institutional change the emphasis is on the way how institutions develop in response to environmental pressures, how institutions are rebuilt in the aftermath of a crisis and how they are able to continue a political struggle (Lowndes and Roberts 2013: 172). Institutional design is understood as a way in which institutions adopt according to human purpose in order to function well and to have the possibility to improve. Institutional designers have the role to rebuild institutions so that they become efficient, representative, transparent and accountable (Olsen 1997: 205). Referring to the process of institutional change analysed above, one of the most important tools for an institution is the building of capacity. Strong institutions are open to new alternatives and opportunities. However, they also resist to changes, in specific circumstances. This point leads to important principles for institutional change that apply to any process of change. The first one is robustness. It consists in the capacity to be capable to adapt to new situations. The second one is sensitivity to motivational complexity. This is explained by the fact that it is necessary to find a balance among the branches of government, civil society that monitor government activities and decisions by pluralist institutions, so that different power centres exist in society. The third one is publicity. It requires a test of all

43 institutions and institutional actions that they can be publicly defended. Finally, the last one is variability which allows for experiences and reflections and a willingness to borrow lessons where appropriate. That way, there is openness for a transfer of know-how to build new institutions (Goodin 1996: 39-43). Referring to these specific theoretic approaches, we can conclude that institutional design is an inescapable process and in the same times an inevitable aspiration for political actors that change their institutions. However, in some situations the actors’ attempts for institutional design do not lead to the expected results. The reason is that institutional change is difficult to control because, for example, there is ‘a Soviet heritage’ on the bases of existing institutional arrangements, lack of will, and the fixed nature of political institutions.

The process of transition: institutional approach This paper does not consider historical institutionalism as a distinct approach to be analysed and evaluated in detail. However, some characteristics of the historical institutionalism are taken into account because of necessity to explain the transition process of political institutions in Moldova and Georgia, due to the fact that both countries have a quite similar past as former Soviet countries and similar processes of institutional changes and reforms. Three major events are to be taken into account here: the fall of the Berlin Wall in 1989, the end of the Cold War in 1990 during the Paris Conference on 19-21 November and the collapse of the Soviet Union in 1991 when the former Soviet countries proclaimed their independence from the USSR. On the 6th September 1991, the USSR recognised the independence of the three Baltic countries. On the 1st of December, Ukraine voted for its independence. During a meeting, that took place on 21th of December in Alma Ata, eight republics proclaimed their independence. In other words, at the end of the 1991, the USSR collapsed. For an empire of the size and importance of the Soviet Union it was extremely painful to accept the renouncing to territorial conquests achieved as a result of WWII (Verluise 2009). The disintegration of the former USSR started a process of transformation of the newly independent countries from an undemocratic system to a democratic one. The perception that communist regimes would be replaced by democratic policies was largely shared by scholars, who predicted the inclusion of former communist regimes in the so- called ‘third wave’ of democratisation across the globe starting in southern Europe in the

44 early 1970s, followed by Latin America in the 1970s and 1980s, East Asia in the 1980s and the communist world in the 1980s and 1990s (Gill 2002: 2-3). However, this positive ‘wave’ turned out to be not so simple in practice. According to Klaus von Beyme the system’s change in the ‘third wave’ of democratisation was hampered by problems of institution-building. Beyme argued that in the Commonwealth Independent States (CIS) since the beginning of the 1990s, the system’s change was controlled by the ‘old cadres’ who ‘kept control of the transition’ (Beyme 1996: 18-28). As the focus of this thesis is particularly on Georgia and Moldova, the transition is analysed in these countries with the main emphasis on the process of institutional change and institution-building. In the context of this thesis, it is necessary to come up with some theoretical aspects about the study of transition and democratic consolidation. Studies about the transition process and democratic consolidation have known a significant development since the fall of communism in Eastern Europe. The transition process was analysed and developed by different scholars who have explained the process of change and function of political regimes in different regions4. Gerardo Munck, one of the transitionist theoreticians that contributed to the development of the literature on transition and democratic consolidation, affirms that scholars of the transition process have a common perspective on the political regime change, wherever they come from. In this context, the change of the regime may be seen as ‘transition’ that is referring on the replacing of an undemocratic regime with a democratic one and respectively on ‘consolidation’ processes that are focused on the aspects connected with the function of democratic regime. According to Munck, the process of change from one regime to another may be disaggregated into two dimensions, procedural and behavioural. The procedural dimension defines the ‘set of the procedural rules’ that are focused on: a) ‘the number and type of actors who are allowed to gain access to the principal governmental positions,

4See more: J.J. Linz and A. Stepan (1996) Problems of democratic transition and consolidation: Southern Europe, South America and Post-Communism Europe, The Johns Hopkins University Press; G, O’Donnell, P.C. Schmitter and L. Whitehead (eds.) (1986) Transitions from authoritarian rule: comparative perspective, The Johns Hopkins University Press; G, O’Donnell, P.C. Schmitter and L. Whitehead (eds.) (1986) Transitions from authoritarian rule, Vol.1: Southern Europe, The Johns Hopkins University Press; G, O’Donnell, P.C. Schmitter and L. Whitehead (eds.) (1986) Transitions from authoritarian rule, Vol.2: Latin America; The Johns Hopkins University Press; G, O’Donnell, P.C. Schmitter and L. Whitehead (eds.) (1986) Transitions from authoritarian rule, Vol.4: tentative conclusions about uncertain democracies, The Johns Hopkins University Press.

b) the methods of access to such positions, and c) the rules that are followed in the making of publicly binding decisions’ (Munck 1996: 8). The behavioural dimension emphasises the importance of actors and specifies that ‘procedural rules structure and shape the conduct of politics only inasmuch as actors accept or comply with these rules’. This idea had opened discussions among scholars on the justification on the basis of which actors are considered relevant. According to Munck, from a behavioural the new regime should include ‘the strategic or instrumental acceptance of a set of procedural rules by all major actors and, while certainly not the normative acceptance of these rules by all major actors, at least the lack of normative rejection of these rules by any major actor’ (Munck 1996: 8-10). Concepts such as transition, democratic consolidation and the quality of democracy are still current in the former Soviet space. The post-communist transition of the states in Central and Eastern Europe to democracy and market economy following the Western model has been considered a process of radical transformation that had a significant impact on the identity of these societies (Barbulescu et all. 2017: 20). However, democratic consolidation is not the final point of democratisation, and there is no ‘unique recipe of democratisation’. The application of the same model of democratisation in different countries may result in a real success, failure, a hybrid regime or end in a situation in which the state has not undergone transition to democracy (Barbulescu et all. 2017: 20; Diamond and Morlino 2004: 21-24). Within transition processes, rules followed by actors are divided into three areas. The first area refers to the creation of new rules by actors. The second area concerns the rules themselves that are in the centre of the process of transition. The last area refers to the acceptance or rejection of the rules proposed by actors during the transition process (Munck 1996: 13). To evaluate the transition process in Georgia and Moldova migrating from an undemocratic regime to a democratic one, it is necessary to present some models of transitions developed by scholars. In this context, the stage of transition process of both countries will be analysed. Guillermo O’Donnell and Philippe Schmitter defined the concept of transition simply as ‘the interval between one political regime and another’. They explained that transition is divided into two stages. The first one is focused on the process of disintegration of an authoritarian regime and the second one on the installation of some form of democracy, or reinstallation of some form of authoritarian regime (O’Donnell and

Schmitter 1990: 6). Adam Przeworski had another perspective. He noted that the process of passing from a regime to another is seen as regime transformation that fall into two types. In the first type, the political actors are strong and well-focused on ‘objective conditions and speak the language of determination’. The objective conditions are seen as mostly economic and social. In this context, democracy is seen as a result of economic development, improvement of the educational system and transformation of class structure. In the second type, political actors follow strategies that are related to their interests and perceptions and ‘formulate problems in terms of possibilities and choices’. As a result, the main focus is on strategic behaviour of political actors that are ‘embedded in concrete historical situations’ (Przeworski 1986: 47-48). Paul G. Lewis pointed out that transition can be understood referring to a process of change that starts with the collapse of an authoritarian regime, and continuing with the adoption of a new constitution, the building of new democratic structures, and adjustment of the political elites and their behaviour to liberal democratic norms (Lewis 1992: 155- 156). The transition process in Central and Eastern Europe as well as the former Soviet countries is understood by ‘the persistent legacy of old regime but also the continuing process of transformation’ (Pridham 2003: 271). In this view, the process of democratisation consists of two stages: transition and consolidation. Both stages have different levels of development dynamics that lead to different outcomes. Generally, in the countries that succeed with a fully democratic transition and consolidate democracy, democratic goals are predominantly part of the aspiration of a former opposition. A significant contribution on the transition process constitutes the study of Dankwart Rustow (1970) ‘Transition to democracy: toward a dynamic model’ in which the author develops the approach of a ‘genetic’ theory of democracy. Rustow describes his transition model in several phases:  national unity phase,  preparatory phase,  decision phase,  habituation phase (Rustow 1970: 350-358). Rustow considers that the first phase national unity is a basic condition for genesis of democracy. This means that the ‘vast majority of citizens in a democracy-to-be must have no doubt or mental reservations as to which political community they belong to’. The condition of national unity is important, otherwise it might lead to secession not to democracy. Subsequently, in the potential society aspiring to democratization there must

47 be a conflict in which the protagonists are the representatives of forces that formulate political claims. Thus, democracy is created by political actors that are conscious and determined, and that obtain from the population legitimacy. According to Rustow, this stage is marked by polarization and intense conflict between social forces. If there is disequilibrium between competing forces that lead to the appearance of winners and losers, then the outcome will not be democracy. Otherwise, both camps can reach a compromise that will underpin democracy. In this situation, Rustow highlights the role of elites. To solve a conflict, the competing elites can find a compromise after which new rules are instituted that ensures a new status quo which is favourable for both parts. The compromise is seen as result of conscious and assumed decisions at the level of political leadership. A decision for governance is the final step within the third stage. After that, there is the stage of habituation in which the ruling elite and citizens are getting accustomed to the new state of affairs. The stages outlined above correspond to transformation, transition and consolidation (Rustow 1970: 350-359). According to a model used by Adam Przeworski, the transition process can be slow and difficult. Przeworski suggests that the difficulty of the transition process may lead to the possibility of failure as a democracy which is instituted but not yet consolidated, could be rejected by the stakeholders of undemocratic regimes (Przeworski 1996; Melinte 2010). In the model developed by Linz and Stepan, consolidation is defined as certainty, while transition is more uncertain. The scholars explain democratic consolidation as a stage when the democratic process becomes ‘the only game in town’, even for the old elite which was opposed to democracy. They consider that democratic consolidation is based on three dimensions: behavioural, attitudinal and constitutional. Thus, a consolidated regime depends on three factors: political institutionalisation, political culture and political consensus (Linz and Stepan 1996: 387-340). In the aftermath of the collapse of the Soviet Union, each of the new independent republics was confronted with major economic and political challenges. Additionally, they faced the need to establish the ‘institutional infrastructure of independent states’ (Birch 1998: 59). In this thesis, the transition process and especially the process of institutional challenge and rebuilding democratic institutions, is focused as it was mentioned on Moldova and Georgia. Both countries faced significant issues in the process of democratisation because of incertitude in establishing the relationship between states, the presence of ethnic minorities and the position of Russia in the geopolitical confrontations in the regions (Birch 1998: 59).

The challenge of institutional reform in transition countries is significant. Institutional change is a complex process of transformation. It is assumed that deficiencies in transition are due to the fact that there has been insufficient attention to building a modern and efficient institutional framework. It is important that institutional change and policy reforms should proceed in the same time because both are important for a consolidated democratic system (Wagener 1993: 7; World Bank 2002: 23). Transformations differ from one regime to another. The same model of transformation cannot be applied to all states without modifications. Political metamorphoses that happened in the years 1989 – 1991 have sometimes resulted in a troubled and weakened state. That is why many scholars and practitioners considered that a rapid change was needed. The main idea was to transform a communist system into a democratic capitalist system. However, as mentioned the transformation process could not be the same for all countries and neither the exact period of time nor how long it lasted. For this reason, the results were also different. The end of the Soviet Union, which dominated almost 50 years of politics and structures within Central Eastern Europe states, led to a significant redefinition of the position of these countries on the regional and international political stage (Kaminska 2014: 16). The post-communist transformation took place differently in Central Eastern Europe; however, in these states still persist, as was previously said, the ‘legacies of the past’ to some extent, so that the ‘communist heritage limited the impact of the EU’. For the Central Eastern European countries, the process of rapid transformation and adoption EU rules and requirements was an important and more realistic motivation (Kaminska 2014: 16). While the EU stimulated interest in the Central Eastern European countries for adoption of the acquis, this stimulus did not motivate to the same degree changes in the identity of the newly independent post-Soviet states. There were constraints that occurred because of a ‘clash between European and domestic arenas’ that provoked dilemmas to elite and citizens. Another reason may be the ‘EU’s limitation as a political actor’ (Kaminska 2014: 16). Another explication is linked to the concept of ‘path dependence’ that claims that the past determines the way of abandoning communism (negotiation, capitulation, coup d’état or popular revolt) as well as structuring the post-communist path. On the one hand, when the ‘negotiated revolution’ was successfully completed, there was a (relative) stabilisation of democracy. On the other hand, when the ‘negotiated revolution’ could not be applied, or even failed, an imperfect democratization took place, marked by significant ups and down (Pop 2010: 3).

Political institutions influence the process of democratisation in the post- communist countries. It seems that institutions, in general, have a significant contribution towards regime change, the process of transition and consolidation. However, transformation cannot succeed by institutions itself. Their role should be analysed in concordance with other factors such as external, economic, political and social (Svetlozar 2003: 3-5). In the chapters IV and V the general context of both countries is presented and it is examined to what extent the former Soviet countries Georgia and Moldova completed or not the process of transition. The process of transition, in both countries, is explored using the following indicators democracy, rule of law, economic freedom focusing on the Freedom in the World Index, the Economic Freedom Index (Heritage), the EUI Democracy Index and the Bertelsmann Transformation Index (BTI). Based on these indicators, both countries show different performance the process of transition to democracy. It will be a comparative analyse between Georgia and Moldova and as a result the question to what extent both countries are advanced in this transition process can be partially answered.

1.4 Europeanization as institution-building

The term of Europeanization it is not simple to define. The concept became popular during the 1990s within studies of European integration that explain both the process of Europeanization and the outcomes within states (Pollack 2010: 37). With many assumptions inspired by European integration theory, Europeanization focuses especially on the domestic level. In this context, it is important to understand the dynamic of evolving European policy as well as the Europeanization. In this context, Europeanization may be analysed mostly as an process than a theory. For instance, Pollack explains Europeanization as a process where EU institutions and policies ‘influence national institutions and policies within various member states (Pollack 2010: 37; Bulmer 2008: 47). In its simplest way, Europeanization is defined as ‘a process in which states adopt EU rules’. In this context, two concepts should be clarified: ‘rules’ and ‘rules adoption’. Rules are both informal and formal and refer to rules of regulation and distribution in specific areas such as rules of political, administrative and judicial process and so forth. Rules adoption is referring on transformation, or domestic change focusing ‘on institutionalisation of EU rules at the domestic level’ (Schimmelfennig and Sedelmeier 2005: 7). In this perspective, it can be assumed that Europeanization is a process that

50 covers different mechanisms and meanings. In the researched area, the most important is to understand ‘the dynamic of the evolving European policy and complexity of European transformation’ (Schneider 2010: 126). Europeanization is understood as a process of structural change that affects in a different way both institutions and actors. Thus, the process of Europeanization may be also seen into two ways: maximalist and minimalist. In a maximalist sense, Europeanization is focused on the structural change that represents attributes that are similar to those that predominate in Western Europe. In a minimalist sense, Europeanization involves an answer to EU policies (Ion 2015: 2-3; Olsen 2002). Europeanization approach is applied especially to analyse the process of political, economic, institutional and cultural transformation in states that adopt European regulations and rebuild their political system. Thus, Europeanization studies the process of transformation that is going on a national, transnational, institutional and identity level. Johan P. Olsen distinguishes five possible uses of Europeanisation: (i) ‘as changes in external territorial boundaries (enlargement), (ii) as the development of institutions of governance at the European level, (iii) as central penetration of national and sub-national systems of governance, (iv) as exporting forms of political organisation and governance beyond the European territories, (v) as a political project aiming at an unified and political stronger Europe’ (Olsen 2002: 923-924). Summarising all mentioned explanations of the Europeanization, it will be argued that Europeanization is more an approach or conceptual framework than a theory. Radaelli (2003) confirms this assumption through the following explanation on the meaning of Europeanization as ‘processes of (a) construction, (b) diffusion, and (c) institutionalization of formal and informal rules, procedures, policy paradigms, styles, ‘ways of doing things’, and shared beliefs and norms which are first defined and consolidated in the making of EU public policy and politics and then incorporated in the logic of domestic discourse, identities, political structures, and public policies’ (Radaelli 2003: 43). Europeanisation may be analysed as ‘bottom-up’ from the Member States to the EU structures or ‘top-down’ from the EU level to the Member States. Another interpretation of Europeanisation process is on horizontal level between State Members. The last interpretation that arises is the impact of Europeanization beyond Europe. The launching of the ENP (see more details about the ENP in chapter II) can be interpreted as a ‘framework

51 of Europeanization’. In a nutshell, the study of Europeanization is referring to the impact of the process of integration of the EU Members States as well as on candidate states. Europeanization that exceeds the EU boundaries is more recent and was introduced in EU literature with the ‘big bang’ enlargement (2004) due to the intention to promote democracy and security in the neighbouring countries (Schimmelfennig 2012: 6 - 18). The specialised literature that is focused on Europeanization has analysed the effects of changes under Europeanization process. In this situation, Tanja Borzel and Thomas Risse explain the Europeanization ‘as two-way process’ that entails a ‘bottom-up’ and ‘top-down dimension’. The ‘bottom-up dimension’ is an indirect effect and is referring to constructing the EU system of governance. The indirect effects are shaped in the sphere of individual and informal actions such as practices, routines, and ways of interpretation of different regulations, whereas the ‘top-down dimension’ is focusing on the impact of its domestic policies and politics in the Members States and beyond. These explicit effects are shaped by the interaction between national institutions and European ones (Borzel and Risse 2003; Bulmer 2008: 48; Beciu 2009: 3).

Europeanization and new institutionalism As RCI is the main approach applied in this thesis, it is needed to consider the link between this and Europeanization. Considering the logic of RCI, Europeanization leads ‘to domestic change through a differential empowerment of actors resulting from a redistribution of resources at the domestic level’ (Borzel and Risse 2000: 3). According to Olsen and March, the logic of consequentialism ‘assumes actors to choose the behaviour option that maximizes their utilities under the circumstances’ whereas the logic of appropriateness ‘stipulates that actors choose the behaviour according to their social role and social norms in a specific situation’ (Schimmelfennig 2012: 6-7). From the perspective of the logic of consequentialism, within Europeanization actors received ‘additional resources to exert influence’, while in the same time ‘constraining the ability of others to pursue their goals’ (Borzel and Risse 2000: 6). From the perspective of the logic of appropriateness, within Europeanization, ‘states are persuaded to adopt EU rules if they consider these rules legitimate and identify with the EU’ (Schimmelfennig 2012: 7). As can be seen, the logic of RCI within Europeanization is focused on domestic changes through ‘empowerment of actors resulting from a redistribution of resources at the domestic level’ (Borzel and Risse 2003: 2).

It is necessary to understand the ‘Europeanization effect’ within domestic policies as well as the impact of transferring of European political ideas and practices beyond the EU. In this context, the effect of Europeanisation within EU countries can be understood as adaptation of processes, policies and institutions to new practices, norms, rules and procedures (Graziano and Vink 2013: 47). There are two conditions for expecting domestic change in response to Europeanisation. As the first one, there must be a degree of ‘misfit’ or incompatibility between ‘European-level processes, policies and institutions on the one hand, and domestic-level processes, policies and institutions on the other’. This situation leads to adaptation procedures that result in ‘sufficient conditions for expecting domestic change’. The second one means that different factors such as actors or institutions ‘respond to the adaptation pressures that induce the change’ (Borzel and Risse 2003: 58). Taking into consideration the Europeanization dimension described above, three dimension of Europeanization can be distinguished:  Membership Europeanization, which refers to the adoption of norms and procedures by EU Member States, respectively the impact of the EU policies on its Member States.  Enlargement Europeanization, which focuses on the stimulus that comes from the membership perspective, so that adaptation of rules and procedures become more likely.  Neighbourhood Europeanization, which covers the EU’s neighbours that are focused on a close cooperation with the EU, without any clear perspective of membership, so that the result may be a continuing political change with superficial implication (Gawrich et all 2009: 5). Table 1.1 presents a summary of the main characteristics of these three types of Europeanization.

Table 1.1 Three stages of Europeanization

Membership Accession Neighbourhood Europeanization Europeanization Europeanization

Conditions of Producer and consumer Strong consumer of Weak consumer of Europeanization of Europeanization Europeanization Europeanization

Consuming or Two way street: Top- One-way street, One-way street, designing down and Bottom-up (primarily) asymmetric asymmetric top-down Europeanization? top down

Mechanisms of Large variety of direct Predominantly direct Predominantly direct

Europeanization and indirect impacts impact impact

Conditionality High (e.g. penalties of Very high gate-keeping Weak, no gate-keeping European Court ) for membership for membership

Incentives E.g. to avoid penalties by EU membership Closer cooperation with EU Court the EU and some hopes of membership

Results Continuous political Rapid political change Continuous political change, deeply routed with extensive effects change, comparably superficial Source: A. Gawrich, I. Melnykovska and R. Schweickert 2009: 7.

As the ENP countries do not have a clear perspective for EU membership, the consequence is that these countries do not have a high interest in adoption of induced EU reforms. Milada Anna Vachudova claims that from 1989 to 1994 the EU had a great impact on the course of political change in Central and Eastern European countries. Vachudova argues that that the EU’s active leverage towards EU candidate can be seen by the fact that the ‘benefits of EU membership create incentives for states to satisfy the entire requirement […] within the EU’s pre-accession process’ (Vachudova 2005: 4). It can be conclude that the EU has been successful to a large extent in transferring institutional rules and norms to EU candidate countries because of the strong membership perspective. Turning out to ENP, the preferences of the EaP countries are discussed later on in this thesis in the context of the implementation of the AA. Even if the EU as a main actor transfers institutional rules and norms to the ENP/EaP countries, through the conditionality process ‘more for more’ there is the likelihood that the impact of the transfer is not as successful in EaP countries. There is a possibility that the rules exported from the EU to EaP countries do not lead to stable institutions. One of the reasons could be that the transferring rules do not clearly offer a strong institutional model for the EaP countries. Another reason could be that the domestic preferences of the EaP countries are not similar with the requested reforms (Dimitrova 2013: 172). In this perspective, the process of Europeanization can be treated as institutions- building and combined with the RCI approach, because actors’ preferences have as a basic idea about how institutions should behave. This aspect is analysed in chapter IV and chapter V, where it is studied how CIB institutions, as formal rules, implemented the institutional-building reforms through the process of Europeanization provided by the EU as principal rational actor. Seeing the EU as principal actor, in the process of transferring rules to the EaP countries creating stable and strong institutions, it is important to examine

54 if this criteria has been successful by implemented through the CIB programme and if the prepared institutions are capable to perform effectively the functions for which the institutions were designed for (Dimitrova 2013: 170-171). The approach of institution-building developed by the EU is understood as a process that develops the administrative structures for adoption and implementation of the EU acquis. Since 1997 it has been considered a central pillar of the pre-accession process for candidate countries. The development of institution-building has been a condition for accession, since candidate countries have to show that they have the capacities to function in the EU multilevel system of governance (Dimitrova 2013: 171). From the perspective of rational choice institutionalism, Europeanization may be seen as strategic calculation for internal political factors from the perspective of a third state. In this context, scholars of Europeanization emphasize the role of the conditionality of the EU (see chapter II) in order to impose changes to adopt norms, practices and conventions that are found in the acquis communautaire for the states that want a strong cooperation with the EU (Popescu 2015: 151). Europeanization represents a possible pathway for EaP countries, especially for the countries that signed an AA with the EU (Georgia, Moldova and Ukraine). In order to testify the efficiency and effectiveness of the institutional approach in Georgia and Moldova, in the next chapters it will be analysed the how actors from the neighbourhood countries adopted the EU rules and how these rules were considered as legitimate by the national authorities.

* * * This chapter has set out the theoretical perspective of this thesis, namely RCI and its applicability in the EaP countries, especially in Moldova and Georgia. The principal rational actors (EU, Moldavian Government and Georgian Government) and secondary actors (citizens from both countries), respectively Russia as regional actor, as well as norms and conventions (formal rules) and informal rules were identified. The chapter then made a conceptual analyse of the transformation approach and the transition process in former Soviet countries. The relevant transition models developed by transition scholars (Rustow 1970, Przeworski 1996, Linz and Stepan 1996, O’Donnell and Schmitter 1990) that will be helpful later to explain the transition process in Moldova and Georgia in the transition process were identified.

The last part of this chapter presented an analysis of Europeanization as a process, dimensions of Europeanization, as well as a general overview of the applicability of Europeanization concept in the ENP region.

Chapter II The European Neighbourhood Policy: context and implementation

This chapter analyses the genesis of the European Neighbourhood Policy (ENP), its main objectives, principles and expectations, as well as the importance of ENP for the neighbourhood countries themselves. It examines the particularities of the ENP 2011 and 2015 reviews and the associated financial instruments: European Neighbourhood Partnership Instrument (ENPI), European Neighbourhood Instrument (ENI) and the new broad Neighbourhood, Development and International Cooperation Instrument (NDICI). The author considers the Eastern Partnership (EaP) as a general context of this thesis and presents an evaluation of this initiative for the EaP countries in general, and Moldova and Georgia in special. The chapter analyses the impact of Europeanization process in the neighbourhood and draws an explanation on limitation of the effective Europeanisation process in the EaP countries. It presents the role of Russia in the Eastern region and analyse the impact of its actions in the EaP countries as well as on the relation with the EU.

2.1. The European Neighbourhood Policy: origins and objectives

The 2004 enlargement of the European Union, or the ‘big bang’ as it is known in the specialised EU language, was one the most important political events in Europe after the end of the Cold War. On 1st of May 2004, eight former communist East European countries (Czechia5, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia) and two Mediterranean island states (Malta, Cyprus) adhered to the EU. This biggest enlargement so far brought the EU to a new total of 25 member states. It changed the Union’s geopolitical setting, as it resulted in the EU new neighbour countries on its eastern borders which until 1991 were a part of the Soviet Union: Belarus, Moldova and Ukraine. It also brought the EU closer to the three countries of the Caucasus region: Armenia, Azerbaijan and Georgia. Finally, it led to new EU land-borders with Russia itself, the former centre and political heir of the Soviet Union. Most of the EU’s

5 On July 1st 2016, the shorthand name ‘Czechia’ was officially entered in the UN database. See more: D.Parc (2016) ‘Czechia’ officially entered in UN database, July 11. Retrieved from https://news.expats.cz/weekly-czech-news/czechia-officially-entered-in-un-database/ [accessed on 28 February 2020].

57 new neighbours were unstable post-communist countries with low living standards, fragile and weak institutions, and high corruption. Having such neighbours led to a risk of instability on the borders of the EU (Whitman and Wolf 2010: 4-5). Having to some extent foreseen this situation, the EU General Affairs and External Relations Council had recognised in November 2002 the necessity of a set of policies for the EU’s soon-to-be new border region. The European Commission and the EU High Representative Javier Solana started to conceptualise the new policy. They prepared a memorandum on the so-called Wider Europe initiative. This was supported by the Danish Presidency of the EU. Danish Minister for Foreign Affairs, Per Stig Møller, in particular, insisted on the enhancement of EU relations with the four eastern neighbours – Ukraine, Belarus, Moldova and Russia. He emphasized the importance of ‘a differentiated approach’ and argued for the necessity of the ‘promise of a perspective for membership’, as in the case of Balkan countries (Korostleva 2012: 2; Whitman and Wolf 2010: 5). In December 2002, at the Copenhagen European Council, the President of the European Commission, Romano Prodi, presented the idea of a New Neighbourhood Initiative, a ‘Proximity Policy for the Wider Europe’. The main aim of this approach was to create a ‘ring of friends’ around the EU, from ‘Morocco to Russia and the Black Sea’. Importantly, in this way, European neighbours to the South and to the East were both comprised in the same political framework. The Proximity Paper did not mention the perspective of membership. The main goal was instead to have both sides focusing on mutual advantages and mutual obligations (Korostleva 2012; 3). In March 2003, the European Commission communicated to the Council and the European Parliament the final draft of its proposal ‘Wider Europe-Neighbourhood: A new framework for relations with our Eastern and Southern Neighbours’ and mentioned that ‘the EU should aim to develop a zone of prosperity and a friendly neighbourhood – a ‘ring of friends’ - with whom the EU enjoys close, peaceful and co-operative relations’ (COM 2003: 4). ‘Wider Europe - Neighbourhood’ was the first official document that described the importance of the ENP. According to this communication, the neighbourhood policy and the neighbour partners are important because of the need and potential to develop economic growth, external trade, to promote political stability and rule of law, as well as the exchange of human capital and culture. The Wider Europe proposal mentioned that proximity, prosperity and poverty are the main three reasons to develop a special policy for the neighbourhood region. In this view, geographical proximity presents opportunities and challenges for both the EU and for its neighbours and offers the possibility to promote

58 security and stability both on the border of the EU and inside of the neighbourhood countries to increase prosperity and to reduce poverty. The new EU approach to its neighbourhood countries could not be developed by the EU alone. That made it necessary to work with the new partner countries to reduce poverty and create an area of shared prosperity and values based on deeper economic integration, intensified political and cultural relations, enhanced cross-border cooperation and shared responsibility for conflict prevention between the EU (COM 2003: 9). As mentioned, the policy excluded for the EU new neighbours the perspective of membership. Instead, the Commission proposed a set of measures and activities, mentioning that the ‘all the neighbouring countries should be offered the prospect of a stake in the EU’s Internal Market and further integration and liberalisation to promote the free movement of persons, goods, services and capital’ (COM 2003: 10). The Council of the EU, on the one hand, accepted the Commission’s proposal regarding the non-perspective of membership for the neighbourhood countries, where it was mentioned that the new policy ‘should be seen as separate from the question of possible EU accession’ (COM 2003). The European Parliament, on the other hand, criticised the removal of a membership perspective, arguing that this proposal will dis- incentivise the neighbours from a strong and effective cooperation. In its reaction to ‘Wider Europe - Neighbourhood: A New Framework for Relations with our Eastern and Southern Neighbours’ the Parliament argued that “we need to ensure that this ‘ring of friends’ approach does not turn into a crude argument between those who say that ‘neighbouring country’ means ‘a country destined never to join the EU’ and those who believe that the prospect of joining the EU is the only way of achieving closer cooperation. […] we would risk taking a wrong turning. […] we should be encouraging instead the determination to avoid further division” (European Parliament 2003: pct 2). Thus, the Parliament insisted on the creation of a strong partnership that would lead to a vast area of common security and thereby to a viable neighbour area. In its final resolution on the subject, the EP pointed out that the Wider Europe Neighbourhood policy is in no way incompatible with the aspiration of neighbouring countries to EU membership. Even if it is different from the enlargement policy, the neighbourhood policy may constitute an important tool for those countries that are in the position to apply for accession under Article 49 of the Treaty of the EU on the basis of the progress they would have made (European Parliament 2003: pct 14 and 15). Furthermore, the EP underlined in its resolution that ‘under Article 49 of the Treaty on the European Union any European

State which respects the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law may apply to become a member of the Union’, and the ‘clear recognition of the right of countries, such as Ukraine and Moldova, that explicitly express their European aspirations to obtain EU membership’ (European Parliament 2003). In this way, the EP assumed that there would be a strong motivation for neighbouring countries to fulfil all the requested political and economic criteria in the framework of the Wider Europe - Neighbourhood initiative. Hence, the ENP was developed as a result of a dispute between different visions, regarding partnership and membership. On the one hand, the Commission focused on a strictly ‘technical approach’ towards the neighbours, building on a partnership, and executed through conditionality supplemented by benchmarking. On the other hand, the EP argued for a more flexible approach, focusing on the difficulties in motivation of the neighbours to make costly reforms without a clear sense of destination. In this sense, it insisted on developing a more comprehensive approach and providing mutual benefits for both sides of partnership (Korosteleva 2012: 4). For the rest of 2003 and early 2004, the Commission held consultations with the concerned third countries regarding the ENP Strategy and a possible Action Plan. These consultations and recommendations were brought together in a Commission Strategy paper published in the aftermath of the 2004 enlargement (Whitman and Wolf 2010: 6). As it was planned by the Commission, a membership prospect was excluded from the final strategy. However, as an alternative, it was underlined that the ENP was designed to spread prosperity, stability and democracy to the neighbourhood countries through a privileged relationship that will build on mutual commitment to common values principally within the fields of the rule of law, good governance, the respect for human rights, including minority rights, the promotion of good neighbourly relations, and the principles of market economy and sustainable development (COM 2004: 3). The Strategy includes all specific elements of the ENP: its main objectives, priorities, action plans, the characteristics of neighbourhood countries from geographical point of view, and related financial instruments. In 2004, when the ENP was officially launched, many policy ideas and instruments of the ENP were adopted from the policy and instruments designed for enlargement policy (Tulmets 2006: 2). There are four main levels that are adapted from the enlargement policy to the neighbourhood one: - the discourse on common values, which replicates accession conditions;

- the concepts of partnership, differentiation, participation, and deconcentration/ decentralisation, which complement the notion of conditionality; - the toolbox of assistance policy, which is complemented by instruments like cross- border cooperation, Twinning, TAIEX, and cooperation programmes; - a new method based on a benchmarking approach, which was introduced to enhance bilateral negotiations and relations (Tulmets 2005: 5). However, Russia opted for a bilateral strategic partnership with the EU rather than developing a common policy together with the neighbourhood countries from the Eastern Europe region. During the EU – Russia Summit in St. Petersburg in May 2003, Russia had already decided to pursue the concept of four ‘Common spaces’ as a basis of this bilateral relationship: the common economic space; the common space of freedom, security and justice; the common space of external security and the common space of research and education. The common spaces are quite similar to the ENP objectives and adopt a similar methodology, based on progress reports to measures the outcomes (Gstöhl and Schunz 2016: 2-4; Celata and Coletti 2015: 46). In addition to Belarus, Moldova and Ukraine, the Commission proposed the ENP to encompass the Southern Caucasus states of Armenia, Azerbaijan and Georgia, as well as the ‘southern neighbourhood states of the Middle East and North Africa6. All in all, the ENP was proposed to sixteen states and territories, namely Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia and Ukraine. As mentioned, the main aim of the ENP was to ‘promote a ring of well governed countries to the East of the European Union and on the borders of the Mediterranean with whom we can enjoy close and cooperative relations’ (COM 2004a). According to Art. 8 of the Treaty of the EU, the Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation (Treaty of the EU). In the same year, the European Security Strategy ‘A secure Europe in a better world’7 was published in which it was specified that ‘security is a precondition of development and the EU is interested that countries at their border are be well-governed’ (Council of the EU 2003: 8).

6 The Mediterranean region is set up by the following sub-regions: the Maghreb countries (covering Algeria, Libya, Morocco, and Tunisia) and the Mashreq countries (covering Egypt, Israel, Jordan, Lebanon, the Palestinian territories, Syria). 7 European Security Strategy: A security Europe in a Better World, Brussels 12.12.2003.

The ENP: principles and instruments

As it was mentioned in the previous chapter, one of the dimensions of Europeanization is Europeanization in the neighbourhood region. In the framework of ENP, Europeanization means a transformation that takes place from outside (the EU) to inside (ENP countries). Furthermore, the EU promotes through the Europeanization process particular norms and practices that cover different areas such as democracy, good governance, economic development and respecting rule of law and human rights. In subchapter 1.4 it was emphasised that the EU, through Europeanization, uses the instrument of conditionality, which operates effectively for candidate countries, for instance, because the membership perspective makes it credible. However, in the case of the ENP, without offering the membership perspective the question arises how effective the role of the EU in these countries is? In order to answer this question, this subchapter presents the main principles of the ENP and explains how effective these principles for neighbouring countries are. The main principles of the ENP are differentiation, conditionality and joint ownership. The differentiation was introduced in the ENP context because the EU realised that grouping countries could minimise individual progress (Kelly 2006: 34). This principle is important because each country differs in terms of geographical position, political situation, and the interest of the neighbourhood country to develop bilateral relations with the EU, as well as economic development, and political culture. For this reason, the EU opted for the differentiation approach and adjusted the main actions that should be developed and implemented according to the interests and position of the respective neighbourhood country. The differentiation principle is appreciated by the ENP countries because this could help them in progressing towards the EU without being stopped by those ENP countries that registered slower progress in their reforms. In order to assess the progress of the Action Plans, the Progress Reports reviewed the respective achievements. In this context, it appears the element of joint ownership by the fact that Action Plans are elaborated jointly between the partners and the EU (Miltner 2010: 13). The conditionality is connected with the differentiation one. The ENP Strategy Paper points out that ‘the level of the EU’s ambition in developing links with each partner through the ENP will take into account the extent to which common values are effectively

62 shared’ (COM 2004: 13). The ENP offers a ‘privileged relationship’ based on ‘mutual commitment to common values’ such as democracy, rule of law and human rights. The more a country conforms to EU values, the closer it can cooperate with the EU (Kelly 2006: 30). The conditionality approach in ENP has its roots in the principles of the Enlargement policy. The difference is that, on the one hand the EU does not offer for ENP countries the perspective of membership, and this can be a risk for the ENP countries which share interest to be part of the ‘ring of friends’ because of the lack of motivation for implementing the reforms, however, in the same time this principle may create as well incertitude. On the other hand, it is important to see to what extent is the EU able to apply the conditionality principle in the ENP countries in order to reach the ENP goals. The conditionality principle was applied in the case of Belarus and Libya which were not eligible to benefit fully from ENP programmes, hence no Action Plans were concluded with these countries. In two other cases, Algeria and Syria, the Action Plans were not concluded in time as well. However, in the case of Algeria, its relation with the EU was based on the AA that was signed in 2002 and entered into force in 2005. In the case of Syria, and AA has been elaborated in 2008, but the signing process was not started (Miltner 2010: 13-14). The joint ownership is based on the awareness of shared values and mutual interests. The EU does not impose a set of priorities on its partners. Priorities are discussed and negotiated with each partner country individually because they vary from country to country. The Action Plans depend on the clear recognition of mutual interests in addressing a set of priorities issues (COM 2004a). The question arises to what extent is the joint ownership real, given that it is in contradiction with the principle of differentiation and conditionality? The functioning of joint ownership seems to focus on the engagement of the neighbours to secure their cooperation by guaranteeing national ownership and commitment (Ghazaryan 2014: 82). Based on the principles that were described above, it can be argued that the process of Europeanization is focused on transformation on institutional identity as well as the shaping of the national actors’ behaviour within ENP countries, or at least the countries that are interested into close cooperation with the EU. Turning now to the main instruments of the ENP, they are the following: Country Report, Action Plan and Progress Report.

- Country reports describe and analyse the political and economic situation of the neighbour partner. They present a general context of the neighbour country and specify from the perspective of the EU what areas need improvements and assistance. - Action Plans is a political document which set the strategic objectives of the cooperation between the EU and an ENP country. They are main tools of the ENP and are considered as primary vehicles through which the ENP ambitions should be realised. Bilateral Action Plans for individual ENP countries were set up for a period of three to five years and were approved by the Association Councils held with each partner country (between partner country, members states, the EU Council Secretariat and the European Commission) and decided on the common consent that vary from country to country (Whitman and Wolf 2010: 7). The main role of the Action Plans, according to the ENP Strategy Paper, was to define priorities and provide focus for the implementation of existing agreements. They ‘will include ‘deliverables’ of importance to the EU and the country concerned in various fields covered by the agreements’ (COM 2004: 9). The Action Plans draw a concrete plan for implementation of domestic reform in the political and economic sphere. The first seven bilateral EU-ENP Action Plans were agreed with Moldova, Ukraine, Morocco, Israel, Jordan, Tunisia and the Palestinian Authority in 2005, after that in 2006 with Armenia, Azerbaijan and Georgia and with Egypt and Lebanon in 2007. Belarus, Algeria, Libya and Syria have not (yet) developed an Action Plan with the EU due to their refusal to develop a partnership within ENP or due to a refusal of the EU to start negotiations with these countries (Keukeleire and Delreux 2014: 251). Typically, Action Plans focus on the following areas: political dialogue and reform, social and economic reform, justice freedom and security, trade issues, market and regulatory reforms. Goals include strengthen the stability and effectiveness of public institutions, build solid foundations for economic integration, promote economic growth and social cohesion, and reduce poverty and to protect the environment, thereby contributing to the long-term objective of sustainable development. Normally, each area includes indications for the prerequisites for each step and commitments by each side (the EU and partner country) (COM 2004). The Action Plans have a ‘defined agenda of reforms’ where a list of short and medium-term priorities for different areas is included. The implementation process is monitored by the European Commission and the EU Delegations in the partner countries (Keukeleire and Delreux 2014: 251). - Progress report is a mechanism of ENP which was adapted from the enlargement policy is the monitoring process. Every year, the European Commission and

64 the European External Action Service (EEAS) present reports in which the progress made by ENP countries is assessed and a set of recommendations for each country issued (COM 2004).

The ENP in practice: The difficult road to reforms

From the beginning, the ENP operated in difficult national, regional and geopolitical contexts and typically saw a slow uptake insofar as real reforms in the partner countries were concerned. While the ENP took effect in 2004, fewer than half of the Action Plans drafted by the European Commission were adopted by the partner countries (Korosteleva 2012: 5). The first seven countries were: Ukraine, Tunisia, Morocco, Moldova, Jordan, Israel and the Palestinian Authority. In February 2005 Ukraine and Moldova’s action plans were first to be finalised and the Council few month later confirmed the intention to develop action plans for Egypt, Lebanon and Armenia, Azerbaijan and Georgia (Kelley 2006: 33). On the positive side the eastern neighbours Moldova and Ukraine have provided, from the beginning, an important impulse for the conception and formulation of the ENP, and have declared EU membership in their strategic objective (Sasse 2010: 181). Furthermore, Ukraine and Moldova (Eastern region) as well as Morocco and Israel (Southern region) were singled out as the ENP countries with which the EU intended to deepen its relations (Sasse 2010: 182-183). However, on the negative side, there was the response from Belarus pointing to the policy’s lack of legitimacy in the region (Korosteleva 2012: 5). The Belarus’ foreign policy discourse has been dominated by the explicit prioritization of the eastern dimension, and especially its ‘brotherly’ ties with Russia. The EU’s efforts to legitimize the ENP by addressing the Belarusians directly failed to yield any visible impact (Korosteleva 2012: 80-81). However, the ENP was also criticised the supposedly more committed partners Ukraine and Moldova. The policy lost ground at home, amid its own citizens (Korosteleva 2012: 5). Even though the EU’s enlargement of 2004 transformed Ukraine into the EU’s most important Eastern partner, domestic factors led to deviations in the ENP implementation. Some of the factors were the domestic instability that increased during the run-up to the 2007 parliamentary election and political incertitude as the result of the dissolution of parliament in September 2008 by President Yushchenko (Sasse 2010: 186).

Regarding Moldova, the adoption of the EU-Moldova Action Plan for three years and subsequently renewed by one year arguably led to the strengthening of the stability and effectiveness of institutions, democracy and rule of law. However, the impact of the role of the ENP in the case of Transnistria was unclear. Furthermore, the role of the EU in Transnistria was limited and did not lead to immediate changes, because the Transnistrian referendum of 2006 expressed overwhelming support for the course toward independence and free association with Russia (Sasse 2010: 196-197). Moreover, the former president Vladimir Voronin distanced himself from a close relationship with the EU and NATO, and repeatedly stated an emphasis on Moldova’s neutrality8 (Sasse 2010: 197). The Russia – Georgia war in August 2008 had a negative impact on the ENP as well. As it was mentioned above, (see p.58) the EU stressed in the European Security Strategy (2003) that the role of security in neighbourhood is a precondition for development of neighbouring countries and recognised that ‘frozen conflicts, which also persist on our borders, threaten regional stability9’ (Council of the EU 2003: 6). Russia –

8 According to the Constitution of the RM (1994) art.11(1) ‘The Republic of Moldova proclaims its permanent neutrality; (2) The Republic of Moldova does not admit the stationing of any foreign military troops on its territory’. See: Constitution of the Republic of Moldova (1994). Monitorul Oficial No.1. Retrieved from http://www.presedinte.md/eng/constitution [accessed on 11 March 2020]. However, this ‘has not protect Moldova from Russia’s continuing military presence in Transnistria’, see more: Socor, V. (2019). President Dodon introduces nuances to Moldova’s Neutrality, ‘Eurasia Daily Monitor’, Vol. 16(134). Retrieved from https://jamestown.org/program/president-dodon-introduces-nuances-to-moldovas-neutrality/ [accessed on 11 March 2020]. In September 2019, the President of the RM, I. Dodon delivered a speech at the UN General Assembly and he emphasised the intention to seek international recognition of the neutrality. See: Dodon’s speech (2019). Speech by Mr. Igor Dodon, President of the Republic of Moldova, at the UN General Assembly, September 26. Retrieved from (eng) http://www.prm.md/eng/discursuri/a-l-o-c-u-t-i-u-n- e-a-domnului-igor-dodon-presedintele-republicii-moldova-la-adunarea-generala-onu [11 March 2020]. In January 2020, the President of the RM, I Dodon reiterated the idea of neutrality of Moldova during the Parliamentary Assembly of the Council of Europe. See: Dodon’s speech (2020). Speech delivered by Mr. Igor Dodon, President of the Republic of Moldova, at the ordinary session of the Parliamentary Assembly of the Council of Europe, January 9th. Retrieved from (eng) http://www.president.md/eng/discursuri/d-i-s-c-u-r- s-u-l-domnului-igor-dodon-presedintele-republicii-moldova-la-sesiunea-ordinara-a-adunarii-parlamentare-a- consiliului-europei [accessed on 11 March 2020]. See more on this topic: Gartner, H. (2019). Neutrality as a Model for the New Eastern Europe, Institut fur Sicherheitspolitik, June 12th. Retrieved from https://www.institutfuersicherheit.at/neutrality-as-a-model-for-the-new-eastern-europe/ [accessed 11 March 2020]; Marandici, I. (2011). ‘Moldova’s Neutrality: What is at Stake?’ In Quo Vadis, Moldova? European Integration Centre (Lithuania) and Institute for Development and Social initiative ‘Viitorul’ (Chisinau). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1262561 [accessed on 11 March 2020]; Albuquerque, A.L. and Hedenskog, J. (2016). Moldova A Defence Sector Reform Assessment, Report No.4350, Swedish Defence Research Agency; New Strategy Centre (2016). The Republic of Moldova at a Crossroads. West or East? An Assessment of the Presidential Elections in the Republic of Moldova. Retrieved from https://newstrategycenter.ro/wp-content/uploads/2016/04/NSCCe.S.I.-An-Assessment-of-the- Presidential-Elections-in-the-Republic-of-Moldova-2016-November.pdf [accessed on 11 March 2020]. 9 Armenia, Azerbaijan, Belarus, Moldova, Georgia and Ukraine have a special relationship with the EU. The conflicts from Transnistria (Moldova), Nagorno-Karabakh (Azerbaijan / Armenia), two conflicts in over Abkhazia and South Ossetia (Georgia) and later the annexation of Crimea (2014) and the escalation of conflict in the regions of eastern Ukraine: Donetsk and Luhansk — are conflicts of critical importance for the EU and its member states.

Georgia war was a tragic event that resulted in the recognition of South Ossetia and Abkhazia’s independence by Russia on 26 August 2008, in a region of great strategic significance to the EU (Whitman and Wolff 2010: 1) (see more subchapter 5.1 Georgia general context). The uptake of the ENP was more positive in some of the countries of the new neighbourhood South region. Notably, the ENP shaped a qualitative linkage between the EU and Morocco. Morocco was among the first partner to sign an Association Agreement, in February 1996 which entered into force in March 2000. Under the MEDA programme, Morocco was the main recipient of funds. Moreover, the country took part in a number of institutional frameworks that formed Morocco’s attempt to be as close to the EU as possible (Bicchi 2010: 206-209). Tunisia signed the EU Action Plan in 2005 for five years and focused on cooperation in the fight against terrorism and on the control of migration flows (Aydin 2012: 239). The EU Jordan ENP Action Plan was signed as well in 2005, with the main internal aim being to enhance their relations and to promote stability, security and well-being (Aydin 2012: 241). The EU signed the ENP Action Plan with Egypt in 2007, with an emphasis on security. As Egypt has a geostrategic position in the region, it was argued that the partners will develop their cooperation on regional and international issues, referring to the Middle East Peace Process (Aydin 2012: 237). The Arab spring which stated in 2010 increased the differentiation among Southern partner countries. On the one hand, Algeria, Morocco and Jordan had some changes to develop without affecting the nature of their regime. On the other hand, in Libya and Syria, the civil war led to lost stability and the impossibility of EU inspired reforms. In Tunisia and Egypt a political transition took place, in Tunisia the political regime turned to a more democratic one, as compared to Egypt (Bicchi 2014). On the whole, the EU, through ENP, promoted in the Southern neighbourhood countries towards more democratic and free market economic model. The EU tried to build up democratic models of government in the Southern region in order to increase security, stability and development. Regarding the Eastern neighbourhood region, to reinforce the ENP Sweden and Poland proposed in 2009 a new cooperation approach with Eastern Europe called Eastern Partnership (EaP, see sub-chapter 2.2. below).

The ENP financial instruments

In the previous subchapter a general overview of the main challenges as well as opportunities for both ENP regions eastern and southern was presented. However, as this thesis focuses on the Eastern region, in the rest of this chapter the Eastern region are presented. Whereas EU financial assistance through ENP for southern region are mentioned for a general overview, within the eastern region the EU financial contribution are presented in detail for individual countries.

European Neighbourhood Partnership Instrument Under the ENP policy, the EU set up a dedicated financial instrument under its 2007-2013 budget, called the ENPI. The ENPI replaced the previous programme ‘Technical Aid to the Commonwealth of Independent Countries’ (TACIS) and the ‘European Mediterranean Partnership’ (MEDA). Compared with the previous financial instruments, the ENPI was designed with enlarged objectives and an increased budget. The main aim of the ENPI was to create an area of stability and prosperity in the neighbourhood countries, to share democratic values and to improve cooperation and deeper economic development and increasing the regional integration by covering a wide range of cooperation areas. The ENPI had an allocated budget of EUR 12 billion for the financial years 2007-2013. This represented an increase of 32% compared with the amount for 2000-2006 for TACIS and MEDA (COM 2014: 13; ENPI 2014 revision). Figure 2.1 represents the allocation of financial assistance for the EaP countries for the financial years 2007-2013.

Figure 2.1 ENPI 2007-2013 (in EUR/million) Eastern dimension Armenia, 281.5

Azerbaijan, 143.5

Ukraine, 1005.6 Belarus, 94.2

Georgia, 452.1

Moldova, 560.9

Source: designed by the author based on data NIP Armenia 2007-2013, NIP Azerbaijan 2007-2013, NIP Moldova 2007-2013, NIP Ukraine 2007-2013, NIP Georgia 2007-2013.

The ENPI was addressed to ENP partners and offered financial assistance for promoting good governance and social and economic development. The ENPI supported the following areas:  political reforms that include building institutional and administrative capacity, good governance, rule of law, respect for human rights, civil society, the fight against corruption, fraud, crime organised and terrorism;  economic reform: economic development, market economy, intensification of trade and regulatory convergence with the EU in the areas of common interest with a view to gradual economic integration with the internal market;  social reform: integration, employment, non-discrimination, fight against poverty;  sectoral cooperation: environment, sustainable development, energy, health, food security, education and training, research and innovation;  regional and local development: develop Euro-Mediterranean regions and Eastern Europe (ENPI Regulation No.1638/2006 ). Having as a priority to assist the neighbouring countries to achieve their objectives and to promote cooperation between them and the EU, the ENPI has the following components: – Bilateral assistance based on allocation of financial assistance for each neighbour country to support reforms envisaged in the ENP Action Plans; Regional assistance programmes that complement the national allocations and address the regional challenges in the East (the Eastern Partnership, the Black Sea Synergy, the Baku Initiative and the North Dimensions) and in the South (the Union for Mediterranean). – Cross border cooperation that financed joint operational programmes for those regions of EU Members states and partner countries which share a common border. – A governance facility (Delcour 2012). The review of the ENP in 2011 introduced an approach based on differentiation and mutual accountability and reward for the progress of the ENP countries under the ‘more for more’ principle. This principle was designed to give higher support to countries that pursue democratic reforms, respecting human rights and fundamental freedom, rule of law, as well as economic development and good governance. The rewarding mechanism under the ‘more for more’ principle increased the EU support toward its neighbours under the

69 conditionality principle. This depended on the progress in building and consolidating democracy and respect for the rule of law. This means that ‘the more and the faster a country progresses in its internal reforms, the more support it will get from the EU’ (COM 2011: 2-4). In this way, a special mechanism was set up for offering additional assistance to selected countries, supplementing the financial allocations of their National Indicative Programmes (NIP) namely the Support for Partnership, Reforms and Inclusive Growth (SPRING) programme for the Southern Neighbourhood (EUR 540 million in 2011-2013) and the Eastern Partnership Integration and Cooperation (EaPIC) programme for the East (EUR 152 million in 2012-2013) (European Commission 2014: 15). In 2013, the financial assistance for the ENP partners under the ENPI increased to EUR 2,56 billion, the highest annual level over the whole seven-year period. Part of this was the additional incentive- based support (under the SPRING and EaPIC programmes) for the countries most committed to reforms and progressing in the area of deep and sustainable democracy (COM 2014: 10-14). The legal framework of the implementation of the ENPI was established in EC Regulation on the ENPI (EC Regulation 2006). Allocation mechanisms for ENPI programmes were based on the needs and features of the partner country, the level of ambition of the partnership between the partner country and the EU, progress towards meeting agreed objectives - especially on governance reform - and the partner’s capacity to manage and absorb assistance. The ENPI was based on a three stage process: - Country Strategy Papers (CSPs) set out the priority areas and the assistance strategy under ENPI. - National Indicative Programmes (NIPs) to translate assistance priorities identified in the CSP into funding priorities. They specified, for a 3-or 4-year period, the indicative financial allocation and its distribution between the focal areas of cooperation. - Annual Action Programmes (AAPs) to detail the activities and projects to be implemented from each annual budget allocation (Delcour 2012). The CSP was linked to the seven years financial plan and defined the main fields of actions as well as the objectives for each partner country. Based on the Strategy Paper, the NIPs were set up for three to four years outlining the financial allocations for the strategic priorities. The AAP delineated specific projects that were funded under the ENPI programme.

Within ENPI 16 Strategic Papers for 2007-2013 were implemented. These Strategic Papers were created for more efficient planning of EU assistance. As Moldova and Georgia are the case studies of this thesis, more attention will be put on the ENPI programmes for these countries. In table 2.1 and table 2.2 the detailed programs that were developed for Georgia and Moldova under the ENPI programme are presented.

Table 2.1 ENPI bilateral assistance for Georgia National Indicative Programme (NIP) Georgia 2007-2010 Programmed Committed Support for democratic development, rule of law and governance 26% 37% Support for economic development and ENP Action Plan 26% 26% implementation Poverty reduction and social reforms 32% 29% Support for peaceful settlement of Georgia’s internal conflicts 16% 8% Total NIP 2007-2010 EUR 120.4M EUR 117.4M Special measures for IDPs 2008-2009 na EUR 105M National Indicative Programme (NIP) Georgia 2011-2013 Programmed Committed Support for democratic development, rule of law, good governance 25-35% 22% Support for trade and investment, regulatory alignment and reform 15-25% 27% Support for regional development, sustainable economic and social 35-45% 49% development, poverty reduction Support for peaceful settlement of conflicts 5-10 % 2% Total NIP 2011-2013 EUR 180.3M EUR 180.7M EaPIC 2012-2013 Programmed Committed EaPIC Georgia Na EUR 49M Grand total Georgia 2007-2013 EUR 300.7M EUR 452.1M Source: European Commission 2014: 46

Table 2.2 ENPI bilateral assistance for Moldova National Indicative Programme (NIP) Moldova 2007 - 2010 Programmed Committed Support for democratic development and good governance 25-35% 26.0% Support for regulatory reform and administrative capacity building 15-20% 18.5% Support for poverty reduction and economic growth 40-60% 55.5% Total NIP 2007-2010 EUR209.7M EUR225.3M National Indicative Programme (NIP) Moldova 2011 - 2013 Programmed Committed Good governance, rule of law and fundamental freedom 35-40% 39.6% Social and human development 25-30% 16.5% Trade and sustainable development 35-40% 43.9% Total NIP 2011-2013 EUR273.1M EUR272.6M EaPIC 2012-2013 Programmed Committed EaPIC Moldova Na EUR 63M Grand total Moldova 2007 - 2013 EUR 482.8M EUR 560.9M Source: European Commission 2014: 47.

As mentioned above, the main focus of the ENPI programme was to support partner countries’ implementation of their own political, governance, economic and social reform programmes. Partner countries that concluded an Action Plan and showed progress in its implementation received substantial funding. To sum up, the establishment of ENPI was a major shift in both ENP policy and in the nature of the financial assistance given to ENPI countries by the European

Commission. Whereas TACIS offered only technical assistance, ENPI provided both general/sectoral budget support and technical assistance to partner countries – thus increasing local ownership of EC assistance.

European Neighbourhood Instrument Under the EU budget 2014-2020, the ENPI has been transformed into a new European Neighbourhood Instrument (ENI), with a total budget of €15.4 billion. This is a significant increase compared to the EUR 11.2 billion allocated through ENPI (2007-2013) to ENP countries from both regions (Bossuyt 2017: 419-420). The ENI supports, under the ENP, privileged relationships, a mutual commitment and promotion of the value of democracy, rule of law, human rights, good governance and the principles of market economy and sustainable development (EU Regulation No. 232/2014). Similarly to ENPI, ENI supports three types of programmes: - Bilateral programmes – provide support for one ENP partner country; - Multi-country programmes that address common challenges to all or a specific number of partner countries and regional and sub-regional cooperation between two or more partner countries; - Cross-Border Co-operation programmes between Member States and Neighbourhood countries taking place along their shared part of the external border of the EU. ENI has focused on six objectives during 2014-2020: - Promoting human rights and fundamental freedom, the rule of law, democracy, good governance, the endowment of civil society and strengthening institutional capacity at all levels. - Achieving progressive integration into the EU internal market, adjusting legislative approximation and regulation according to the EU requirements and including deep and comprehensive free trade areas, institutional building and investment. - Creating good conditions for the better organisation of legal migration and promotion of people to people contacts. - Encouraging development in all areas – reducing poverty, rural development, reducing social exclusion, supporting environmental protection and promoting capacity building in science, education, technology and innovation. - Promoting confidence building – contributes to security and the prevention of conflicts and builds positive peace.

- Enhancing sub-regional, regional and European Neighbourhood collaboration as well as Cross Border Cooperation (EU Regulation No 232 / 2014, art 2, p.4). Table 2.3 presents the EU bilateral support through ENI for 2014-2020 for EaP countries and specifies the priority actions for 2014-2017 and 2018-2020 respectively:

Table 2.3 ENI financial support for EaP countries Countries Indicative Indicative allocation ENI Indicative allocation ENI allocation ENI (2014 – 2017) (2018 – 2020) (2014 - 2020) Armenia EUR 252 million to EUR 140 million to EUR 170 EUR 144 million to EUR 176 EUR 308 million million million Intervention area (indicative allocation %) Private sector development 35 % Economic development and Public administration reform 25% market opportunities 35% Justice sector reform 20 % Strengthening institutions and Complementary support for good governance 15% capacity development and Connectivity, energy efficiency, institution building 15 % environment and climate change Complementary support to civil 15% society organisations ≤ 5 % Mobility and people-to-people contacts 15% Complementary support for capacity development / institutions building and strategic communication 15% Complementary support for civil society development 5% Azerbaijan EUR 139 million to EUR 77 million to 94 million EUR 42 million to EUR 51 169 million million

Intervention area (indicative allocation %)

Regional and rural development Economic development and 40% market opportunities 25% Justice sector reform 20% Strengthening institutions and Educational and skills good governance 15% development 20% Connectivity, energy efficiency, Complementary support for environment and climate change capacity development and 15% institutional building 15% Mobility and people-to-people Complementary support for civil contacts 25% society 5% Complementary support for capacity development / institutions building and strategic communication 10% Belarus EUR 129 million to EUR 71 million to 89 million EUR 112 million to EUR 136 EUR 158 million million Intervention area (indicative allocation %)

Social inclusion 30% Economic development and Environment 25% market opportunities 40%

Local / Regional economic Strengthening institutions and development 25% good governance 15% Complementary support measures Connectivity, energy efficiency, to Civil Society 10% environment and climate change Complementary support for 15% capacity development 10% Mobility and people-to-people contacts 20% Complementary support for capacity development / institutions building and strategic communication 5% Complementary support for civil society development 5% Georgia EUR 610 million to EUR 335 million to EUR 410 EUR 371 million to EUR 453 EUR 746 million million million Intervention area (indicative allocation %)

Public administration reform 25% Economic development and Agriculture and rural market opportunities, including development 30% smart, sustainable and inclusive Justice reform 25% growth 40% Complementary support for Strengthening institutions and capacity development and civil good governance, including society 20% consolidating the Rule of Law, addressing security 20% Connectivity, energy efficiency, environment and climate change 15% Mobility and people-to-people contacts, including support to the continuous implementation of the visa liberalisation benchmarks and to vocational education, training 10% Complementary support for capacity development/institution building 5% Complementary support for civil society development 5% Complementary support for strategic communication 5% Moldova EUR 610 million to EUR 335 million to EUR 410 EUR 284 million to EUR 348 EUR 746 million million million Intervention area (indicative allocation %) Public administration reform 30% Economic development and Agriculture and rural market opportunities, including development 30% sustainable and inclusive Police reform and border economic growth 35% management 20% Strengthening institutions and Complementary support for good governance, including the capacity development /institution Rule of Law and Security 15% building 15% Connectivity, energy efficiency, Complementary support for civil environment and climate change

society 5% 25% Mobility and people-to-people contacts, including support to the continuous fulfilment of the Visa Liberalisation Action Plan benchmarks and to education, training and research 10% Complementary support for capacity development and institution building 5% Complementary support for civil society development 5% Complementary support for strategic communication 5% Ukraine up to EUR 1.5 From 2014 to 2017 bilateral ENI EUR 433.8 million to EUR 530.2 billion10 assistance to Ukraine was million provided in the form of annual Special Measures Intervention area (indicative allocation %) Strengthening institutions and good governance, including the rule of law and security 25% Economic development and market opportunities, including private sector development and improvement of the business climate 20% Connectivity, energy efficiency, environment and climate change 15% Mobility and people-to-people contacts, including social inclusion 20% Complementary support for capacity development 15% Complementary support to civil society 5% Source: compilation by author11.

10In response to Ukraine’s political and economic crisis, in March 2014 the European Commission pledged to invest up to EUR 11 billion from 2014 to 2020 to support recovery and democratic transition. Unfolding events have made it difficult to identify the focus of EU assistance to Ukraine several years in advance. See more: European Commission, (2015) Support for the Eastern Partnership: stories, facts and figures from the European Neighbourhood Instrument 2014. Retrieved from https://ec.europa.eu/neighbourhood- enlargement/sites/near/files/neighbourhood/pdf/eastern-partnership-results-2014.pdf, p. 22 [accessed on 11 Nov 2019]. 11 The information from the table 2.4 was retrieved from: European Commission, (2014) Programming of the European Neighbourhood Instrument (ENI) 2017-2020. Single Support Framework for Armenia 2017-2020, retrieved from https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/armenia_ssf_2017- 2020_final.pdf, [accessed on 3 May 2019]; European Commission (2014), Single Support Framework for EU support to Armenia (2014-2017), retrieved from https://library.euneighbours.eu/content/programming- european-neighbourhood-instrument-eni-2014-2020-single-support-framework-eu-supp, [accessed on 3 May 2019]; European Commission, (2014) Programming of the European Neighbourhood Instrument (ENI) 2014-2020. Single Support Framework for EU support to Azerbaijan (2014-2017), retrieved from https://library.euneighbours.eu/content/single-support-framework-eu-support-azerbaijan-2014-2017,

Neighbourhood, Development and International Cooperation Instrument In June 2018, the European Commission proposed the next seven-year budget of the EU, the Multi Financial Framework (MFF) 2021-2027. In this context, the EC created under the heading ‘Neighbourhood and the World’ a new financial instrument called Neighbourhood Development and International Cooperation Instrument (NDICI) with a proposed budget of EUR 89.2 billion (COM 2018a: 2; 29-30). Through NDICI, the EU will continue to support relations with the neighbourhood countries focusing on stability, security and prosperity. NDICI is intended to focus on the following priorities:  Promoting enhances political cooperation;  Supporting the implementation of the EU agreements (AA, association agendas etc);  Enhanced partnership towards and economic prosperity;  People to people contact;  Mobility and migration management security and stability (COM 2018b). The proposed budget for the neighbourhood regions (Eastern and South combined) is EUR 22 billion, which represents a significant increase as compared to ENI (EUR 15.4

[accessed on 3 May 2019]; European Commission, (2018) Single Support Framework for EU support to Azerbaijan 2018-2020, retrieved from https://library.euneighbours.eu/content/single-support-framework-eu- support-azerbaijan-2018-2020, [accessed on 3 May 2019]; European Commission, (2014) Programming of the European Neighbourhood Instrument (ENI) 2014-2020. Strategy Paper and Multiannual Indicative Programme for EU support to Belarus (2014-2017), retrieved from http://eeas.europa.eu/archives/docs/enp/pdf/financing-the- enp/belarus_2014_2017_programming_document_en.pdf, [accessed on 3 May 2019]; European Commission (2017) Single Support Framework for Belarus (2017-2020); retrieved from https://ec.europa.eu/neighbourhood- enlargement/sites/near/files/eni_2017_040284_eu_good_governance_programme.pdf, [accessed on 3 May 2019]; European Commission, (2014) European Neighbourhood Instrument (ENI) 2014-2020. Single Support Framework for EU Support to Georgia (2014-2017), retrieved from https://library.euneighbours.eu/content/european-neighbourhood-instrument-eni-2014-2020-%E2%80%93- single-support-framework-eu-support-georgi, [accessed on 3 May 2019]; European Commission, (2017) Programming of the European Neighbourhood Instrument (ENI) 2017-2020. Single Support Framework for EU support to Georgia (2017-2020), retrieved from https://eeas.europa.eu/sites/eeas/files/georgia_2017- 2020_ssf_final.pdf, [accessed on 3 May 2019]; European Commission, (2017) Programming of the European Neighbourhood Instrument (ENI) 2017-2020. Single Support Framework for EU support to Moldova (2017- 2020), retrieved from https://eeas.europa.eu/sites/eeas/files/single_support_framework_2017-2020.pdf, [accessed on 3 May 2019]; European Commission (2014) European Neighbourhood Instrument (ENI) 2014- 2020. Single Support Framework for EU Support to the Republic of Moldova (2014-2017), retrieved from https://library.euneighbours.eu/content/european-neighbourhood-instrument-eni-2014-2020-single-support- framework-eu-support-republic [accessed on 3 May 2019]; European Commission, (2017) Programming of the European Neighbourhood Instrument (ENI) - 2017-2020 - Single Support Framework for EU support to Ukraine (2018-2020), retrieved from https://eeas.europa.eu/sites/eeas/files/ukraine_c_2017_8264_annex_en.pdf, [accessed on 3 May 2019].

76 billion). At this stage (February 2019), there are no budget proposal for individual neighbour countries nor for separate regions. Negotiations among the EU institutions and EU Member States on EC proposal were underway at time writing.

The ENP review 2011 and 2015

The entry into force of the Lisbon Treaty introduced for the first time a reference regarding the EU’s neighbourhood policy. In this way, the Lisbon Treaty provides the EU with a unique opportunity to become a more effective actor in the neighbourhood region (COM 2011, 5). Article 8 of the Lisbon Treaty specifies: a) ‘The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation. b) For the purposes of paragraph 1, the Union may conclude specific agreements with the countries concerned. These agreements may contain reciprocal rights and obligations as well as the possibility of undertaking activities jointly. Their implementation shall be the subject of periodic consultation’ (The Lisbon Treaty 2010: Art. 8). Article 8 of the Lisbon Treaty is important for a number of reasons: - It provides a legal basis for a new type of bilateral agreement to be concluded on the basis of political and geographical criteria. The ‘neighbouring countries’ that respect the ‘values of the Union’ are included in this ‘special relationship’. - Article 8 of the Lisbon Treaty is part of the so-called ‘common provisions’ of the Treaties of the EU including the Union’s foundational values and fundamental principles and exposes the importance attributed to the EU’s neighbourhood partner countries (Elsuwege and Petrov 2011: 689). In this way, the EU fully integrated the ENP into the EU’s institutional framework and institutionalised the ENP rather than treating it as an ad-hoc policy framework (Simão 2011: 156). Therefore, the Lisbon Treaty has allowed the EU to ‘strengthen the delivery of its foreign policy’ and to increase cooperation with neighbouring countries in an integrated and more efficient manner (COM 2011: 1). However, the events in the Southern neighbourhood as well as the Russia – Georgia war in 2008 led to the necessity to revise the neighbourhood policy and to adopt a new

77 approach to strengthen the partnership between the EU and the countries from neighbourhood.

The 2011 ENP review The ENP was established to help neighbour countries to follow democratic and open-market economies with the EU. However, five years after the launch of the ENP, the hope for transformation was not fulfilled in most of the neighbourhood countries. In March 2011, the European Commission and the High Representative called for a review of the ENP in the communication ‘Partnership for democracy and shared prosperity with the southern Mediterranean’ (COM 2011a). The 2011 ENP review proposed to focus the neighbourhood policy along the following four criteria: - deep and sustainable democracy, - conditionality ‘more for more’, - differentiation, - conflict resolution. Deep and sustainable democracy – this approach was introduced in the ENP revision because the EU wanted to reinforce democracy in the neighbourhood region. The review observed that the ENP had focused on the political stability, which resulted in the ‘EU’s support and strengthening of autocratic regimes’ (Bouris and Schumacher 2017: 16). For this reason, the concept of political stability was reshaped into so called ‘deep democracy’. As it was specified by the EP ‘deep democracy’ means to build a strong partnership with civil societies ‘as a means to promote change and democratisation’ (EP Resolution 2011 2011/2157(INI). Furthermore, a stronger linkage with civil society has been realised through the European Endowment Democracy (EED) and Civil Society Found. The EED was founded to promote democracy through civil society organisations whereas CSF was to offer the financial mechanism for these organisations (Emerson 2011: 3). ‘More for more’ was the second approach in the ENP review. Under the ‘more for more’ performance, the EU intended to encourage political reform, focusing on the needs of economic growth and social development of each ENP partner country (EP Resolution 2011). The ‘more for more’ principle was applicable to both eastern and southern regions. The EU increased its financial assistance, enhanced mobility and access to the EU market to those partner countries most advanced in democratic reforms. This means that,

78 following this principle, the EU gave more political and financial support to those neighbour countries that implement more reforms and are more democratic (Popescu 2011). The ‘more for more’ implies a strengthening of the conditionality principle which was mentioned in the strategic paper of the ENP. The partner country which makes more progress in their domestic reforms will expect more assistance from the EU with regards to the three Ms (markets, mobility and money). In this way, the new approach involved a higher level of differentiation, because the EU intensified the links with the partner country as far as the aspiration, needs and capacities of neighbour country will allow (Keukeleire and Delreux, 2014: 254-255). Differentiation was the third approach in the ENP review. The ENP partner countries that are committed to building deep democracy should receive tangible and credible incentives which are based on each country’s political, economic and social performance (EP Resolution 2011). The partnership will be developed with each neighbour on the basis of its needs, capacities and reform objectives. Some partners may want to move further in their integration effort, which could entail a greater degree of alignment with EU policies and rules leading progressively to economic integration in the EU Internal Market. The EU does not seek to impose a model or a ready-made recipe for political reform, but it will insist that each partner country’s reform process reflects a clear commitment to universal values that form the basis of our renewed approach. The initiative lies with the partner, and EU support will be tailored accordingly (COM 2011: 2). Furthermore, the ENP review emphasised that the mutual accountability, meaning that a new approach, must be based on a shared commitment of the neighbour countries and the EU in respecting of human rights, democracy and rule of law. This involved a high level of differentiation and would allow that each country develops links with the EU according to their interests, necessities and capacities (COM 2011: 5). EU support could be in different forms, such as increased funding for social and economic development, larger programmes for comprehensive institution building, market access, increased EIB financing in support of investment or facilitation of mobility (COM 2011: 3). Conflict resolution was the last approach developed in the ENP review. This is an important factor that was addressed by the ENP revision. The impact of the Arab Spring and the continued instability in the Eastern region led to the fact that the EU was determined to raise its engagement in conflicts from in the immediate neighbourhood and ‘move beyond mere crisis management and conflict prevention’ (Bouris and Schumacher 2017: 18-19).

According to the ENP review in 2011, the EU responded with determination to a rapid by changing situation in its neighbourhood, for example through new development programmes such as SPRING for the Southern Neighbourhood and EaPIC for the Eastern Neighbourhood (Comelli 2013: 198-199). To summarize, the revised ENP policy focused on the ‘more for more’ approach, the importance of mutual accountability between the EU and ENP partner countries and the necessity of partnership not just between governments but with the civil society as well. The new ENP approach emphasised the importance of differentiation and strengthen the relations with the ambitious partners who want to develop and follow the democratic way of development. Furthermore, the new policy enshrined greater flexibility and set out a framework for tailored responses, matching the specific requirements of the countries, their progress in undertaking reforms, and the nature of the partnership they seek with the EU (COM 2012: 2).

The 2015 ENP review A second review of the ENP was considered to be necessary in 2015 due to new geopolitical challenges and the fact that a new EU Commission had taken office the year before. Both causes led to the idea of the revision of the ENP (Carp and Schumacher 2015: 2). A decade since its launch in 2004, the ENP had seen both positive and negative aspects. On the positive side was the signature of three AAs with Georgia, Moldova and Ukraine during EaP Summit in Vilnius. On migration and mobility, Moldova received in 2014 visa free regime travel to all Schengen countries. Georgia and Ukraine received visa free regime in 201712. In the Southern ENP region, the strengthening of relations with Morocco and Tunisia continued to reflect the depth of the reform efforts in these countries (COM 2015: 2). The democratic transition in Tunisia registered positive aspects as well. ‘The Economist’ nominated Tunisia in 2014 as country of the year, as it was adopted a new, enlightened constitution and held parliamentary and presidential polls (The Economist

12 In order to see the Moldova, Georgia and Ukraine path towards visa liberalisation see the official website of the DG Migration and Home Affairs, European Commission, Visa liberalisation dialogue and progress reports on Ukraine, Visa liberalisation dialogue and progress reports on Moldova, Visa liberalisation dialogue and progress reports on Georgia at European Commission, DG Migration and Home Affairs https://ec.europa.eu/home-affairs/what-we-do/policies/international-affairs/eastern-partnership/visa- liberalisation-moldova-ukraine-and-georgia_en, [accessed on 14 Nov 2019].

December 2014). Furthermore, Tunisia and Jordan signed a Mobility Partnership with the EU in 2014 (COM 2015: 2). On the negative side, in Syria, almost 220 000 people, died since the beginning of the conflict in 2011 and 3.9 million fled. In Ukraine almost 5000 people died on the Ukrainian side and almost 5000 on the separatist-Russian side while 2 million people left Donbas (Policy digest no.14 2015: 2). Furthermore, Russian pressure has increased in the several Eastern neighbourhood countries. All these challenges demonstrated that the EU should revise its policy in the neighbourhood and should take stronger into consideration the role of Russia in the Eastern neighbourhood. Given these developments and building upon the results of the 2011 review, the Commission expressed the intention in the 2014 Annual Programme, to undertake a fundamental ENP review. In March 2015, the Commission together with the High Representative of the EU for Foreign Affairs and Security Council adopted a consultation paper called ‘Towards a new European Neighbourhood Policy’ in which was stated that ‘[our] neighbourhood is less stable than it was ten years ago’ (COM 2015a: 2). This paper set out key questions for the future of the ENP that should be discussed with key actors and stakeholders. In April 2015, the Council of the EU emphasised that the ENP review was to be done for both the EU's Common Foreign and Security Policy and other areas of the EU's external action. In the same time, the Council underlined the ‘importance of a special relationship with the EU's neighbours which needs to be as effective as possible in order to develop an area of shared stability, security and prosperity’. Moreover, the revision of the ENP should provide ‘an adequate framework for long term relations with all ENP partners, while making it as well more political and responsive to the diverse challenges in the neighbourhood’ (Council of the EU 2015). The ENP review consultation organised by the European Commission was open from the beginning of March until the end of June (Murray 2015:2). During the consultation process, the EU and ENP partners underlined four priority areas:  Differentiation  Focus  Flexibility  Ownership visibility (COM 2015a: 6-7).

These areas reflected the key principles for a more streamlined ENP, in line with the EU’s political priorities and interests (Lanon 2015: 233). Differentiation should continue in the new ENP, and most importantly, the EU should be able to offer a direct answer to the immediate changes in the neighbouring countries as well as to the changing aspiration of the ENP partner country. During the development of the ENP policy, on the one hand the partner countries have shown different interests and needs in terms of their engagement with the EU, as in the case of Belarus and Azerbaijan. On the other hand, other partner countries have shown their interest to engage in deeper ties with the EU, both on the political and economic level, as in the example of Georgia, Moldova and Ukraine. For this reason, the differentiation principle has found its place in the new ENP revision in order to better reflect the diverging aspirations of the ENP partners. The EU adopted new criteria regarding the assessment of the differentiation between ENP partners focusing on the bilateral approach taking into consideration in special the partner’s level of engagement. The incentive approach ‘more for more’ adopted in 2011 has been successful in implementing reforms in the ENP partner countries. However, it has not proven a sufficiently strong incentive to create a commitment to reform if there is no political will (COM 2015b). Hence, the EU proposed to develop its engagement with these countries individually. In the ‘progress reports’ the EU will focus specifically on meeting the goals agreed with respective ENP partner (COM 2015b). Focus was introduced as a new priority in the ENP review. According to the joint communication ‘a new focus will be on stepping up work with our partners on security reform, conflict prevention, counter-terrorism and anti-radicalisation policies in full compliance with international human rights law’ (COM 2015b: 3). As it was mentioned above, the 2011 review of ENP focused on building ‘deep and sustainable democracy’, ‘close political association with the EU’ and ‘economic integration into the Internal Market’. These priorities were still relevant in the ENP 2015 review, considering that the banner of ‘security and stability imperative’ should be a top priority for the EU and those policies such as security and migration has to be taken into consideration (Lanon 2015). Furthermore, the ENP stressed the importance of focusing on further strengthening the economic and political ties between the EU and ENP partner countries through close cooperation, partnership and association. The EU had to move ‘from an approach very much based on the evaluation of progress to a more political approach’ (Murray 2015: 1- 4).

While in the first review the European Commission identified five focus area: trade and economic development, connectivity, security, governance and migration and mobility, in the second review a special emphasis was put on energy security and threats to security from organised crimes and from frozen conflicts (Murray 2015: 1-4). Flexibility was introduced as a priority area in the ENP 2015 review because this tool would allow the EU ‘not only to respond more effectively to the changing developments in the neighbourhood, but also to adapt better to the individual needs of the partner countries and their priorities and evaluate the progress made’ (Murray 2015). Furthermore, in the consultation paper it was stressed that the EU must ‘be able to respond more flexibly through its financial cooperation to rapidly changing developments in the region’ (COM 2015: 9). The ‘flexibility’ policy is considered a novelty of the ENP review. This means that the EU intended to offer more flexibility where possible, with lighter options, going beyond existing preferential or non-preferential trade agreements for those who choose not to engage across all sectors at the outset (COM 2015b). Ownership visibility is the fourth priority. The concept of joint or mutual ownership was considered a significant principle in the ENP 2015 review, because the EU should demonstrate the strengthening of mutual relationship towards its neighbour countries. The mutual ownership has been designed to move away from the traditional, hierarchical relationship structures between the EU and the ENP countries towards a strengthened partnership (Kostanyan 2017: 76). According to the ENP review (2015b: 2) ‘differentiation and greater mutual ownership are the hallmarks of the new ENP’. Each ENP partners has different preferences regarding the development of relation with the EU. For instance, Georgia, Moldova and Ukraine decided to follow the path of political association and economic integration with the EU through the AA including DCFTA. In the South, Morocco developed an advanced status in relation with the EU. Tunisia has a privileged partnership (COM 2015b: 4). The main goal of the EU is to develop an engagement with its partners focusing on the partnership approach. Thus, it developed different patterns of relations and allow in the same time a sense of ownership by both sides. This aspect is important because each relationship will be clearer and in the same time shared interests will be identified (COM 2015b: 4). The significance of this principle is that it is focused on a better communication strategy and involved various actors and stakeholders in the implementation of the ENP. Furthermore, the concept of neighbour of neighbours was first time brought into discussion. The EU should be able to respond to the challenges that both regions Eastern and Southern jointly face (Murray 2015: 1-4).

As these few main priorities area were established during the process of ENP consultation, the Council invited the High Representative and the Commission to develop a set of proposals on ensuring coherence of the ENP policy with the security and foreign policy dimensions of other EU actions abroad. ENP should contribute to promoting ‘stability in the neighbourhood in line with the comprehensive approach and the external dimension of other relevant EU policies such as the area of Freedom, Security and Justice’ (Council of the EU 2015). The results of the consultation regarding the ENP review were presented to the European Parliament’s Foreign Affairs Committee (AFET) on November 18th 2015 by the High Representative, Federica Mogherini, and the Commissioner for Enlargement and Neighbourhood, Johannes Hahn. They pointed out the future direction of the ENP and highlighted how the EU and its neighbours ‘can build more effective partnership in the neighbourhood’ (COM 2015b: 2). Based on the March 2015 Joint Consultation Paper’s observation that the EU has ‘not always been able to offer adequate responses to developments in its neighbourhood’, the 2015 ENP Review has sought to assess what has and what has not worked (Delcour 2015: 1). Thus, the 2015 ENP review was built on the following points:  stabilising the neighbourhood;  stronger neighbourhood, stronger partnerships;  good governance, democracy, rule of law, and human rights;  proposed joint priorities for cooperation;  the regional dimension;  more effective delivery. These elements, in some way, were present from the beginning of the implementation of the ENP. However, in the new revision it was necessary to refocusing and improving these initiatives. The new 2015 ENP review indicated that the ownership by both partners and the EU Members States should be stepped up, that a strong cooperation is necessary, and a more relevant focus and flexibility and visibility (COM 2015b: 3). The review in 2015 offered the most extensive re-assessment of the policy from its launch. It reconsidered the instruments and sectors based on which the cooperation between the EU and ENP partner countries has developed from the beginning and focused on the assumptions upon which the ENP was based (Delcour 2015: 1).

The Council adopted conclusions on the review of the ENP in December 2015. According to the Council, the Joint Communication took into account interests and needs of the EU in its neighbourhood, neighbours’ commitment to reforms, the level of ambitious as well as the challenges and the geopolitical environment. It stressed the importance of sustainable economic development, with particular focus on youth, education and employment (Council of the EU 2015). To sum up, the ENP 2015 review took into account the consultation process of different written inputs from a diverse range of stakeholders and brought the following main results: the perspective of a closer relationship with the EU had encouraged reforms in some of the ENP partner countries. The ENP review recommended that ownership of the policy by both the partner countries and the EU be stepped up, that cooperation should be given a tighter and more relevant focus, and that greater flexibility be applied to evolving new circumstances.

2.2. The Eastern Partnership – a decade of challenges and opportunities

The EaP is the eastern dimension of the ENP. It was initiated by Poland and Sweden in 2009 and launched at the EaP Summit in Prague. This initiative accelerated after the war between Russia and Georgia in 2008 and with gas supply cuts between Russia and Ukraine in January 2009. At this time, the EU’s Eastern Neighbourhood was increasingly the venue for a tug-of-war for influence between the West – most notably the EU, NATO and the US – and the Russian Federation (Akcakoca et al. 2009: 11). Furthermore, the conflict between Russia and Georgia indicated that countries from the former Soviet space were vulnerable and that the EU did not have a concrete strategy for the security of both for the former soviet countries from the immediate EU neighbours and for its borders. The main aim of the EaP is to bring the six ex-Soviet countries of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine closer to the European democratic values and to integrate them stronger, politically and economically with the EU. Almost all these countries are supported to implement political, social and economic reforms and have expressed their wish to come closer to the EU. The EU intended to offer to its eastern partners ‘far-reaching support for democratic and market-oriented reforms and thus contributed to their political and economic stability’ (COM EaP 2009).

The Eastern Partnership as a joint policy of the EU, is based on common values and has three objectives:  accelerating political association;  furthering economic integration between the European Union and its eastern neighbours;  providing for citizen's mobility (COM EaP 2009). The EU strived for increasing its presence in the East because on the one hand these countries are immediate or appropriate neighbours, and from geopolitical point of view can create a linkage between Central Asia and the Caucasus and Europe. On the other hand, there are numerous challenges in such states as Moldova, Ukraine, Georgia, Azerbaijan, Belarus and Armenia with weak democratic stabilisation, high corruption, frozen conflicts, and low commitments regarding respecting human rights. Poverty is a common problem in the immediate EU neighbourhood (Longhurst 2005: 1-2). The idea of a policy for the eastern neighbourhood was initiated for the first time by Germany as ‘Neue Ostpolitik’ in the first half of 2007. The plan was for a Neue Ostpolitik with three emphases: - a ‘European Neighbourhood Policy Plus’; - a realignment of European-Russian relations on the basis of a renegotiated ‘Partnership and Cooperation Agreement’ (PCA) between the Russian Federation and the European Union, and - a strategy for Central Asia (Kempe 2007: 1-2). However, this idea did not immediately materialise, but took shape in a different form in May 2008 as a Polish – Swedish proposal for creating the EaP (Miltner 2010: 42). The Polish-Swedish proposal for the creation of the EaP balanced the position of the Eastern neighbourhood vis-à-vis (or against?) the French proposal for the creation of the Union for the Mediterranean. This reflected an ‘internal rivalry’ within the EU member states. On the one side, there were those (France, Spain, Italy) that were interested more in the Southern region. On the other side, there were EU members states (Poland, Sweden, Germany, Baltic countries, Hungary) that were interested to increase the EU presence in the east and supported ‘to keep the door open even if it’s on the long term’ (EU Observer 2007; Sadowski 2013: 13; Keukeleire and Delreux 2014: 257). The analysing the Joint Declarations of biannual EaP summits are important in order to take stock of the achievements of the EaP process, as well as of the challenges that lay ahead. EaP summits offer the chance for both the EU and EaP countries to reflect on

86 new directions of cooperation, to re-evaluate past activities, and to reflect on specific issues that each EaP country faces.

The Prague Eastern Partnership Summit 2009 Given the context outlined above, in June 2008, the European Council asked the Commission to prepare a proposal, however in September urged it to accelerate responding to the need for a clearer signal of EU commitment following the conflict in Georgia and its broader repercussions (COM 2008). The keystones of the Commission’s proposal for the establishment of an EaP were:  Association Agreements - to replace the existing PCAs.  Creation of a free trade zone.  Gradual visa liberalisation. The initiative excluded what most eastern neighbours value most – military security and the perspective of EU membership. Thus, the EaP was formally launched on 7 May 2009 (Sedelmeier 2010: 426). Through the EaP, the EU supported the reforms in the six EaP partner countries through this partnership focusing on democratic consolidation, respect of human rights and rule of law and the transition towards market economy. In the EaP Joint Declaration signed on 7 May 2009 in Prague, the EU and six EaP partner countries agreed that the EaP would be ‘based on commitments to the principles of international law and to fundamental values, including democracy, the rule of law and the respect for human rights and fundamental freedoms, as well as to, market economy, sustainable development and good governance’ (Joint Declaration Prague 2009: 5). It was emphasised that the EaP ‘will be developed without prejudice to individual partner countries' aspirations for their future relationship with the European Union. It will be governed by the principles of differentiation and conditionality’ (Joint Declaration Prague 2009: 5). To achieve these ambitious objectives, the EaP developed two paths: a bilateral one with the main aim of strengthening individual cooperation with EaP partner countries and a multilateral one to address challenges that are common to all partners on the regional level. The bilateral track was designed to create a closer relationship between the EU and each EaP partner to foster stability and prosperity based on the mutual interest. The participants in the EaP Prague Summit agreed that ‘bilateral cooperation under the EaP umbrella should provide the foundation for AAs between the EU and those partner countries who

87 are willing and able to comply with the resulting commitments’. Under the new AAs, the DCFTA will be developed. In order to implement efficiently and effectively the AA including the DCFTA, the EU ‘will develop Comprehensive Institution-Building (CIB) Programmes individually with each partner country in order to improve their administrative capacity, including through training, technical assistance and any appropriate innovative measures’13 (COM 2008: 2). The CIB programmes will improve the capacity of each partner to undertake the necessary reforms. In the same time, on a bilateral track, the EU and the EaP countries will negotiate and implement policies for visa liberalisation, deeper cooperation to enhance the energy security of the partners. The EU will be offering support for the economic and social policies designed to reduce disparities within each partner country and across borders (COM 2008: 2). The multilateral track was considered an innovation of the EaP and consisted in supporting reforms on issues of common interest. Four policy platforms were proposed under this dimension:  good governance and stability  economic integration and growth  energy security and transport  people to people contacts. Under these four platforms, the EU proposed to develop five flagship initiatives: integrated border management, support to small and medium-sized enterprises, regional electricity markets, energy efficiency and renewable energy sources, prevention, preparedness and responses to natural and man-made disasters and economic governance. All five flagship initiatives were implemented in the framework of the ENPI Regional East Programme for 2010-2013 and are designed to ‘give additional momentum, concrete substance and visibility to the Eastern Partnership’ (Joint Declaration Prague 2009: 9). Table 2.4 presents the EU financial allocation for the EaP countries divided into two periods: 2007-2010 and 2011-2013.

13 In the Chapter III the CIB program is analysed in depth

Table 2.4 Financial EU allowance for the EaP countries 2007 - 201014 2011 - 201315 Armenia € 98.4 million; Armenia: €182 million Azerbaijan € 92 million; Azerbaijan: €75.5 million Georgia €120.4 million16 Belarus: €41.5 million Moldova € 209.7 million; Georgia: €208 million Ukraine € 494 million Moldova: €308 million Ukraine: €389 million Source: Collected data from E-course ‘EU-Russia Relations: Between the Vilnius and Riga Eastern Partnership Summits’, October – December 2017, University of Tartu, Estonia and EaP webpage.

The final declaration of the Prague Summit did not include a membership perspective, however it was stated that the EaP ‘will be developed without prejudice to individual partner countries’ aspirations for their future relationship with the EU’ (Joint Declaration Prague 2009: 1-2).

The Warsaw Eastern Partnership Summit 2011 The second EaP summit was held in September 2011 in Warsaw during the first Polish EU presidency. It reaffirmed the Prague 2009 agenda. Drawing a summary of the two years after the initiating of the EaP, a decrease of democracy and respect of human rights was witnessed in several countries. For instance, in Belarus the President A. Lukashenko had reinforced his dictatorial methods against the opposition parties. Furthermore, Belarus did not participate in the EaP summit in Warsaw, which was a clear sign that Lukashenko did not want to follow the democratic way promoted by the EU.

14 In addition to the ENPI, partner countries can profit from: the Governance Facility (maximum EUR 50 million annually for all ENP countries); the Cross Border Cooperation (CBC) that brings together regions of EU Member States and ENPI partner countries sharing a common land or sea border. In 2008 the CBC East adds up to approximately EUR 25,6 million; the Neighbourhood Investment Facility (NIF) that operates with pooled grant resources of the Community and Member States, which are used to leverage International Financial Institutions loan financing. NIF focuses on the priority sectors Energy, Environment and Transport, but support may also be provided for SMEs and Social Sector development. There are projects ongoing ranging from Energy Transmission System, Technical assistance for Improvement of Water and Sanitation Systems, to the Modernisation Project at Chisinau Airport. In 2008 the NIF has allocated almost EUR 70 million to projects in the East [Data from E-course ‘EU-Russia Relations: Between the Vilnius and Riga Eastern Partnership Summits’, October – December 2017, University of Tartu, Estonia]. 15 In addition to the ENPI, partner countries can also profit from founds: Erasmus Programme which support the mobility of individual students and staff from partner countries to the EU with over 2 300 scholarships for students/staff to study in the EU; the European Instrument for Democracy and Human Rights (EIDHR) providing support for the promotion of democracy and human rights in non-EU countries; Horizon 2020 is the European grant and subsidy framework for innovation and research and development with a EUR 70 billion budget for 2014-2020; the Eastern Partnership Culture Programme strengthens regional cultural links and dialogue between the EU and partners cultural networks and actors [Data from E-course ‘EU-Russia Relations: Between the Vilnius and Riga Eastern Partnership Summits’, October – December 2017, University of Tartu, Estonia]. 16Additional funding up to EUR 500 million was available to cope with the consequences of the war in Georgia in August 2008 [Data from E-course ‘EU-Russia Relations: Between the Vilnius and Riga Eastern Partnership Summits’, October – December 2017, University of Tartu, Estonia]. 89

On the positive side, during EaP Warsaw Summit, a dialogue on visa-free regimes with Moldova and Ukraine was launched. Visa facilitation and readmission agreements were planned with Georgia (Joint Declaration Warsaw 2011: 2). Additionally, the negotiations on the AA with Ukraine which were launched in 2007 continued in a positive way. The EU had launched negotiations on the AA with Moldova in January 2010 and registered a good progress. With Georgia, Armenia and Azerbaijan, the EU launched negotiations on the AA in July 2010 (COM 2011a: 3). Furthermore, during the Warsaw Summit the EU reiterated that after the launching of the EaP there was more trade and economic interaction between the EU and its partner neighbours than even before (Joint Declaration Warsaw 2013). One should remember that principle ‘more for more’ was already analysed in the ENP 2011 review. In this context, within the EaP Warsaw Declaration it was emphasised that ‘the principles differentiation and mutual accountability will allow individual partners to better meet their aspiration, need and capacities’. Taking into account these principles, it will determine the intensity of cooperation and partners, who are more engaged in reforms, will benefit more from their relationship with the EU, including closer political association, deeper gradual economic integration in the EU Internal Market and increased EU support (Joint Declaration Warsaw 2011: 2). Nevertheless, some EaP countries namely Moldova, Ukraine and Georgia, criticised the EaP policy for its lack of new offers and membership prospects to them. These partners hoped in the final declaration for the direct references to the accession Art 49 of the Lisbon Treaty. However, despite of these discontents, partner countries accepted the EaP initiative as ‘the underlying basis for the relations with the EU’ (Penkova 2012: 26). The EU, during the EaP Warsaw Summit, reiterated the importance of the new separate ‘institutional set-up to manage the enhanced relationship between the EU and its eastern neighbours’ namely the launching of CIB programmes to support the implementation of the future AA including DCFTAs as well as to support the implementation of the action plans towards visa liberalisation (Joint Declaration Warsaw 2011; Penkova 2012: 26). Compared with the previous declaration, the Warsaw EaP Summit Declaration contained a slightly more promising wording for the pro-membership camp stating that ‘the participants of the Warsaw Summit acknowledge the European aspirations and the European choice of some partners’ (Joint Declaration Warsaw 2011: 1; Made 2011: 5).

Observers noted that the EU prefers to keep up some pro-membership rhetoric in the multilateral documents of the EaP (Made 2011: 5-6).

The Vilnius Eastern Partnership Summit 2013 The third EaP Summit in Vilnius in November 2013 marked an important step forward in the advancement of the EaP. The Vilnius Summit was supposed to mark progress in bilateral relation between the EU and EaP partner countries. The main objective of the summit was to sign the AA including DCFTA with Ukraine and initialling the AA including DCFTA with Georgia and Moldova. However, contrary to expectation, the AA with Ukraine could not be sign in Vilnius. Just a few days before the Summit, Ukraine decided do not sign the AA. One week before the EaP Summit, the Cabinet of Ministers of Ukraine adopted Order no 905-p, suspending the process of preparation for signature of the AA between the EU and Ukraine. As justification, the government cited the need to assure ‘national and economic security of the country’ (Sekarev 2011: 26). Some weeks after the EaP Vilnius Summit, Ukraine’s decision was ‘rewarded’ by Russia through a $15 billion (EUR10.9 billion) bailout and a drastic reduction of the price of Russian gas17 (Penkova 2014: 2). Regarding Armenia, on 3 September 2013 the government declared that it renounces to the AA with the EU and announced its decision to join to the Russian project of a Custom Eurasian Union with Russia, Belarus and Kazakhstan. The announcement came after the president of Armenia Serzh Sargsyan held a meeting with his counterpart Vladimir Putin. The frozen relations between Belarus and the EU remained intact and the relation between Azerbaijan and the EU were selective (Penkova 2014: 2). Before the summit, Russia punished Moldova and Ukraine with trade sanctions, as warning not to go ahead with negotiations with the EU. Thus, the Ukraine’s decision to withdraw temporarily from the AA led to a diminishing of the EU’s credibility in the neighbourhood. Two factors led to the problem, that firstly the EU did not take into account the ‘Ukraine’s clannish political and economic governance and its strength’, and secondly, the conviction that Russia would not oppose the EaP policy (Penkowa 2014: 3). In this way, the EU quickly reoriented its political emphasis to Georgia and Moldova, those countries that still shared the position to be closer to the EU. Both countries initialled the AA including DCFTA and decided that to sign the Agreements in

17 Gazprom slashed the gas price from $400 per 1,000 cubic metres to $268.5

2014 before the next EaP Summit in Riga. This step made by the EU had on its basis the risk of a Russian intention to ‘get both countries to follow in the footsteps of Armenia and Ukraine and withdraw from signing the agreements. The quick decision for signing of the AA with Georgia and Moldova was based as well on taking into account the political fragility of these countries (Emerson 2014: 10).

The Riga Eastern Partnership Summit 2015 The EaP Riga Summit that took place on 21-22 May 2015 ‘hosted’ one of the biggest crises from the Eastern region. Ukraine experienced both the Euromaidan revolution and the Russian intervention in Ukraine, culminating in the annexation of Crimea in March 2014 and the support for separatism in the Donetsk and Luhansk regions (Knott 2015). Russia’s ability to destabilise Ukraine and similar intentions redirected toward other EaP partners have shown the vulnerability of the Eastern region under the Russia’s pressure and their fragility regarding the foreign policy choices (Kobzova 2015: 3-4). As it was mentioned in the subchapter 2.1 the ENP review in 2015 was focused on the question how to make the EU more flexible and diversified. However, with the signing of the AA, it was introduced a differentiation within Eastern Europe region. The group of non-AA countries: Armenia, Azerbaijan and Belarus demonstrated different level of motivation and interest to cooperate with the EU ‘having no obligation to approximate to the EU allows for relationships that are tailor-made and flexible’ (Kostanyan 2015: 2). Since Armenia sacrificed in 2013 its AA with the EU in favour of joining to Russian Custom Union, in March 2015 the EU and Armenia completed the so called ‘scoping exercise’ to identify the legal ground for a future agreement. Regarding Azerbaijan, even if from the inception of the EaP, it did not have an interest to sign AA with the EU, after six years it expressed the interest to develop a ‘Strategic Dialogue’ with the EU that is free of the conditionality that underpins the EaP. The relationship between the EU and Belarus remained tense. Although Belarus is part of the EaP, the relationship with the EU remains limited due to the different view regarding promoting democracy and respecting of human rights (Kostanyan 2015: 2; Giragosian 2015: 5-7). The role of the EU, after the fourth EaP Summit, may be seen in two different approaches. The first three countries, Georgia, Moldova and Ukraine, were interested to be close to the EU and accepted the full advantages offered by the EU by the implementation of the AA including DCFTA. The other three countries, Armenia, Azerbaijan and Belarus,

92 did not choose a closer relationship with the EU. Rather, they shared a balanced interest to have some cooperation with the EU but in the same time do not break their relationship with Russia as the main influencer in the region. For this reason, the Joint Declaration Riga reconfirmed that the EaP partner countries have the sovereign right to freely choose the level of EU ambition and the goals to which they aspire in their relation with the EU. The signing provisional application of the AA with Georgia, Moldova and Ukraine constituted an important step in accelerating political association and economic integration with the EU. The AA signatory countries reconfirmed that the implementation of the AA was their priority (Joint Declaration Riga 2015: 4). Furthermore, the EaP Riga Summit coincided with the revision of the ENP 2015 review and the taking of a new EU Commission which as described previously (see ENP 2015 review). The ENP 2015 review emphasised that the EU had to take into account the internal challenges in individual EaP countries and to be able to propose and implement specific policies according to the interest of each EaP country.

The Brussels Eastern Partnership Summit 2017 The fifth EaP Summit, which was held in November 2017 in Brussels, adopted ‘20 deliverables’ through which the six EaP countries shall improve the rule of law, respect of human rights, develop and modernise their economy and fight against corruption in the next years. These 20 initiatives included activities in all of the four EaP platforms: strengthening institutions and good governance; economic development and market opportunities; connectivity, energy efficiency environment and climate change; and people to people contacts. In this broad perspective, the main provisions of the EaP Summit Declaration 2017 are: . Building a strong civil society. . Respecting gender equality and non-discrimination. . Developing new job opportunities at the local and regional level. . Creating opportunities to develop the trade between the EU and EaP partner countries. . Respecting rule of law and create an anti-corruption mechanism. . Implementing of Public Administration Reform (PAR) in line with the EU principles.

. Taking decisive steps to improve energy efficiency and the use of renewable energy and reduce greenhouse gas emissions. . Creating opportunities to invest in young people’s skills, entrepreneurship and employability (Joint Declaration Brussels 2017). The PAR provision is important for the EaP countries, especially for Georgia, Moldova and Ukraine as AA signatory countries. Without proper reform of their public administrations, most of the other goals outlined in the EaP Summit declaration will remain illusionary. To be noted that the AA including DCFTA which were signed with Moldova, Georgia and Ukraine in 2015 also require new reforms in the public institutions. A ‘Comprehensive Institution Building Programme’ has been designed, (as it was mentioned in the the Prague EaP Summit section p. 84) by the EU to strengthen public institutions in the AA- and DCFTA-context (more details about CIB programme are presented in the chapter III). The main topic of the EaP summit in Brussels was security and resilience due to the Ukrainian crisis. Whereas Georgia, Moldova and Ukraine had already reached the most important milestones (AA including DCFTA and visa liberalisation) as it was mentioned above, the other partner countries – Armenia, Azerbaijan and Belarus had taken smaller steps in establishing its relationship with the EU, through other types of agreements (Fras 2017). During the Brussels EaP Summit, the EU was focused on more realpolitik elements towards its EaP partner countries. A new concept of smart differentiation took shape in the relationship between the EU and the EaP partners. While in the previous EaP statement, the Eastern region was divided into two groups: pro-European: Georgia, Ukraine and Moldova and pro Russia: Belarus, Armenia and Azerbaijan, during the last EaP summit the final Joint Declaration emphasised that the ‘scope and depth of cooperation are determined by the EU's and partners’ ambitions and needs, as well as the pace and quality of reforms’ (Joint Declaration Brussels 2017). The EU promoted in the eastern region the western model and did not sufficiently take into account the Russian’s influence factor in the region. According to some scholars, the EU had greatly overestimated its own influence and underestimated the structural problems and risks in its neighbourhood (Lehne 2015). For this reason, in the Joint EaP Statement, the EU claimed to have recognised the geopolitical challenge in the region and to focus on more pragmatism and realpolitik as its framework. Therefore, in the joint statement it was emphasised that the EaP has to build ‘a common area of shared

94 democracy, prosperity and stability and increased cooperation which is not directed against anyone’. In the same time the ‘linkages with other partners required broader involvement and would contribute to the objectives of particular activities and the general objectives of the Eastern Partnership, cooperation on a case-by-case basis may be open to third countries’ (Joint Declaration 2017 Brussels). In 2019, at the 10th EaP anniversary of the EaP, the EU did not hold an EaP summit18 as in previous years. Instead, on 13-14 May 2019 it organised an Annual Eastern Partnership Ministerial meeting as a ‘high-level conference’ with participation of EU Foreign Ministers and their counterparts from the EaP countries. The discussion focused on the progress made by EaP countries during first ten years of the initiative as well as on the implementation of the ’20 deliverables for 2020’ agenda (European Council 2019; EEAS 2019). The annual EaP summit is significant for a number of reasons. Firstly, it is an occasion to reflect on joint policies that should be developed and implemented. Secondly, it is important to have a regular communication and dialogue channel between EU high level representatives and their EaP counterparts, so that they develop a joint understanding of the challenges that EaP countries face. Finally, the annual EaP summits offer a platform to evaluate to which extent agreed policy priorities were implemented by EaP countries, as a basis for new joint decision making. The results and failures of the EaP will be presented in the next subchapter 2.3.

2.3 European Neighbourhood Policy and Eastern Partnership initiative: a critical reflection

For a complex policy like the ENP, an important condition for coherence and effectiveness is a ‘consensus among the macro-policy makers on the goals of the policy and the instruments to be used’ (Sedelmeier 2007: 4). In the case of the ENP it was mentioned already that the main goal that is accepted by all member states is ‘to increase the EU’s security’, and to support stability in the neighbourhood through ‘promoting welfare and democracy in the ENP participants’. In this situation, the consensus, within ENP, on this goal is fairly strong among EU countries (Sedelmeier 2007: 4). However the

18 The EU did not hold an EaP summit in 2019 due to internal EU agenda (the European Parliament election took place at the end of May 2019, the election of the next presidents of the European Commission and European Council, and post Brexit Summit 2019).

95 question is how effective could be the EU through ENP in promoting security and stability in the neighbourhood countries, given that both regions (ENP East and ENP South) are different and have different aims in cooperating with the EU. The ENP has been criticised from the start that it comprises states of very different nature. For intra-EU political reasons (security, stability and EU policy coherence), countries of the North-African and Near East regions of Maghreb19 and Mashreq20 (now called ‘southern Mediterranean’) were grouped together with east European countries with which they shared very little historically, politically, culturally, linguistically or economically. One reason for this grouping lied in very different geopolitical interests of EU member states at the time of the ENP launch in 2004. For instance, France, supported by south European countries (Italy, Spain) was mainly interested in fostering stronger EU- relations with North Africa. In the same time, Sweden, new EU member Poland, and Germany were concentrating on the east European countries, some of which (Ukraine, Belarus) through the 2004 EU extension became neighbours of the EU. These different ‘eastern’ and ‘southern’ interests should be kept together through the ENP policy framework. So once the EU launched in 2008 the ‘Union for the Mediterranean’, it was necessary to create a counterbalancing on ENP East, and one year later the EaP was launched (see subchapter 2.2) (Keukeleire and Delreux 2014: 258; Whitman and Wolff 2012: 11). The grouping of 16 very different countries under the neighbourhood heading led to the fact that a true ‘neighbourhood’ identity never materialised. For example, the population of Southern neighbourhood region generally feels it has nothing in common with people from Eastern neighbourhood region. This has been so before the launch of the ENP, and has not changed fifteen years later. Early tries by the EU institutions to launch common activities or Inter-regional21 programmes for both the ENP South and East regions

19 Algeria, Libya, Morocco, Tunisia 20 Egypt, Israel, Jordan, Lebanon, Palestine, Syria 21 Under the ENPI, the programme documents were called National Indicative Programmes for regional cooperation and actions covering both East and South. See more detail: European Commission (2010). ENPI Interregional revised strategy paper 2007-2013 and Indicative Programme 2011-2013. Retrieved from https://library.euneighbours.eu/content/enpi-interregional-programme-revised-strategy-paper-2007-2013-and- indicative-programme-2011 [accessed 01 Nov 2019]; European Commission (2010). ENPI Regional East Programme: Strategy Paper 2010-2013 & Indicative Programme 2010-2013. Retrieved from http://www.eaptc.eu/struct_file.php?id=26 [accessed 01 Nov 2019]; European Commission (2010). ENPI Regional Indicative Programme (2011-2013) for the Euro-Mediterranean Partnership. Retrieved from http://eeas.europa.eu/archives/docs/enp/pdf/financing-the-enp/regional_indicative_programme_(2011- 2013)_en.pdf [accessed 01 Nov 2019]. Under the ENI, the programming documents for both regions are called Single Support Framework and Multi-Annual Indicative Programmes.

96 have received little enthusiasm22 beyond a small circle of a political elite such as policy makers, NGOs, business as social and consultancy firms, so that in practice both regions continued to perceive each other as separate (European Commission, DEVCO 2014: 70- 74). Furthermore, while an EU membership perspective did not realistically exist for any of the new ENP South countries, this was a very real policy driver in Ukraine, Georgia, Moldova, and to a lesser extent Armenia, Azerbaijan and Belarus. As far as Eastern Europe is concerned, the emergence of the EaP concept in 2008/2009 can be interpreted as a failure of the ENP policy. Had the ENP been a success, a largely duplicating EaP concept would probably never have been launched. To the defence of the EU, it has to be said that hardly foreseeable events strongly contributed to the need to review its policy approach. Most importantly, the war in Georgia in 2008 led to a strong feeling in some EU member states that the cooperation with Eastern neighbourhood countries had to be strengthened in order to act against Russian influence. If the launch of the EaP was indeed the best answer to the war in Georgia, or if a reinforcement of cooperation with eastern neighbourhood countries in the existing ENP framework, would have been preferable is hard to tell in retrospect. What can be said however is that the creation of the ENP in 2004 and the EaP in 2009 led to conceptual overlaps, confusion and lack of visibility among elites and the broader public. Presumably, had any of the two existed in the absence of the other, the chances for a common political space to emerge would have been greater. Given the impossibility to check the counterfactual, the answer to this has to remain open. Several main problems of the ENP could not be solved through the launch of the EaP. Most importantly, the EU membership perspective for those countries that wanted it, did not become any clearer. Arguably, future EU membership for good reformers became even more distant through the launch of the EaP, as the new concept again did not include any promise of EU membership. According to many observers and stakeholders in the eastern partner countries, key EaP approaches such as AA, DCFTA and mobility partnership were perceived as being designed to permanently keep them out of the EU, and

22 See detail that summarise the use of the ENPI between 2007-2013 by country and regional / inter-regional programme in terms of budgeting commitments in European Commission, DEVCO (2014). European Neighbourhood and Partnership Instrument 2007-2013: Overview of Activities and Results 2000-2013, p.74 Retrieved from https://ec.europa.eu/europeaid/sites/devco/files/overview_of_enpi_results_2007- 2013_en_0.pdf [accessed 01 Nov 2019].

‘in a permanent limbo’ somewhere between Brussels and Moscow (Keukeleire and Delreux 2014: 260-261; Whitman and Wolff 2010). Also, while the coherence of the new EaP region automatically grew through the non-inclusion of the southern ENP countries, it did not lead to a homogenous political space of Brussels-oriented reforms either. Too different were the geopolitical interests of Georgia and partially Ukraine and Moldova on the one hand, and Azerbaijan and Belarus on the other hand, with Armenia somewhere in the middle. While the first three countries had a strong (real or formal) pro-EU orientation in most of the years since 2009, Azerbaijan and Belarus showed no real inclination to change their political systems, while Armenia subscribed to some pro-western reforms, while remaining fundamentally dependent on Russian security guarantees protecting it against its long-standing adversary Azerbaijan. Despite the launch of the EaP, Moldova and Ukraine remained divided between roughly equal parts of the population with a general western and eastern orientation. War and territorial changes could not be prevented through the EaP policy either, as the occupation of Crimea and the war in eastern Ukraine have tragically shown since 2014. Therefore, if the creation of a common political space of six stable EU oriented reform countries was the aim of the EaP, successes were limited. However, on a more realistic scale, ENP and EaP fulfill some important functions that can be counted as modest successes: - With the exception of Crimea and Donbass, the ten years since the launch of the EaP were largely peaceful. The conflicts in Transnistria, Abkhazia and South Ossetia remained frozen (though rather through the overwhelming military force of Russia than because of the EaP). Despite occasional shooting, the long-standing conflict over Nagorno- Karabakh never fully erupted (though again the role of the EaP in this is not straight- forward). Radical political swings in Ukraine and Moldova remained largely peaceful, with Ukrainian elections in 2019 bringing in a young seemingly reform-minded president. Autocratic but peaceful countries on the border of the EU (Belarus) did not collapse, which would have brought hard-to-manage security and migration problems for the EU (The Economist Apr 9th 2016). - The fall of the EU visa requirements for Moldova (2014), Georgia and Ukraine (2017) greatly enhanced the mobility of the citizens of these countries. This liberalisation was politically and technically facilitated through the ENP and EaP frameworks (e.g. through support for the introduction of biometric passports and security

98 border and migration cooperation). While on a national level, further migration to the EU led to numerous challenges, on the individual level the improved travel freedoms must count as a strong and very tangible improvement. However, the general populations probably do not link this important improvement to the ENP /EaP framework. - As shown in chapter IV on CIB, where countries and institutions had the willingness to reform, the EaP offered many possibilities for finance, external advice, and cooperation with peers from the EU. Many technical improvements such as easing of administrative procedures and infrastructure investments were financed through EU programmes. Thousands of civil servants and experts from the six partner countries were trained through EaP projects. The introduction of the ‘more for more’ principle in 2011 was an important policy innovation to encourage policy innovations, in line with the international development consensus23. A general evaluation of the EaP programme is beyond the scope of this thesis. The above purely raised several issues which merit closer inspection, and which are relevant as framework conditions for the closer examination of the CIB programme in the following chapters. It is interesting to note that while ENP was reviewed in 2011 and 2015, to the authors knowledge no official evaluation or review of the EaP has taken place since its launch in 2009.

2.4 Russia, the European Union and the Eastern Partnership relations – an overview

After the collapse of the Soviet Union, the EU developed for the newly independent states a new instrument called ‘Partnership and Cooperation Agreement’ (PCA). The PCAs with each country were negotiated individually. The objectives of the PCAs were: - to establish a new trade regime with the newly independent countries; - to institutionalize political relations, including political dialogue, in order to address relevant issues as well as to provide for the opportunity to further improve and expand cooperation; - to ensure that EU cooperation and assistance is conditional upon the progress of the countries concerned in terms of political and economic reform (Zagorski 2004: 81).

23 See e.g. Dollar, D. (1998) Assessing Aid: what works, what doesn’t and why. A World Bank Policy Research Report which is based on decades of empiric data concluded that development assistance can support countries with willingness to reform, but cannot buy ‘systemic improvements’ where reform willingness is missing.

Russia signed its PCA with the EU in 1994. The agreement entered into force in 1997. Former Russian President Boris Yeltsin declared that the agreement had ‘historic importance’ and that with this agreement ‘Russia becomes a significant partner of the Europeans and we will do everything possible to support European integration’. At the same time, according to Yeltsin, this agreement means ‘the end of ideological and economic conflicts that had prevailed during the Cold War era’ (Yeltsin 1994). The EU and Russia set up an elaborated and an extensive structure of cooperation under the PCA, because Moscow wanted to be ambitious in developing bilateral relations with the EU. It was established to be organised at the highest level two summits every year between Russia and the EU, and at lower levels the cooperation through different committees and councils (Bildt 2015: 1-3). However, things did not work out as intended. On the one hand, the meetings on the highest levels provided opportunities for a comprehensive dialogue between two major actors. On the other hand, meetings related to the working structure on lower levels never materialised. The reason was that Russia preferred dealing with issues on the highest level. This could be explained by the fact that Moscow has been a dominant power in a different world and has less experience when it came to a horizontal relationship and to cooperate with multilateral structures as complex as the EU (Bildt 2015: 1-3). In consequence, the progress of cooperation between these two important actors has been slower in both the implementation of the PCA and bilateral secondary agreements, multilateral treaties and other international commitments. All these aspects led to an overwhelming agenda with a growing number of outstanding and unresolved issues (Vahl 2007: 121). The Common Strategy was a second major bilateral document between the EU and Russia, which was signed in 1999. Apart from the emphasis on the consolidation of the relationship between both actors stipulated already in the PCA, the Common Strategy sets out the aim of promoting the integration of Russia into a wider area of cooperation with Europe as well as creating conditions for the future development of a free trade area between the European Community and Russia (European Council 1999: 8). The European Council identified four main objectives under the Common Strategy:  Consolidation of democracy, the rule of law and public institutions in Russia.  Integration of Russia into a common European economic and social space.  Cooperation to strengthen stability and security in Europe and beyond.  Common challenges on the European continent (European Council 1999: 8).

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However, according to Katinka Barysch, the Common Strategy’s objectives already looked unrealistic when they were adopted by the EU because of the 1998 rouble crisis in Russia and the weak leadership of President Yeltsin. Thereby, the document played little role in the consolidation of the EU policy towards Russia (Barysch 2004: 11-12). A Russian strategic response towards the Common Strategy was developed through the ‘Medium-term strategy for the development of relations between the Russian Federation and the EU (2000-2010)’ and it was considered a response to the EU’s Common Strategy on Russia. The Medium-term strategy was drafted in 1999 and presented to the EU in October of the same year by then-prime minister Vladimir Putin (Lynch 2004: 103). According to the Russian Medium-term Strategy, the EU-Russian relations ‘would be based on treaty relations without mentioning the objective of Russia’s accession to or ‘association’ with the EU. Russia as a world power situated on two continents, should retain its freedom to determine and implement its domestic and foreign policies, its status and advantages of a Euro-Asian state and the largest country of the CIS, and its independence of its position and activities in international organizations’ (Maass 2016: 30; Adomeit 2010). During the EU Russia Summit in Helsinki in October 1999, the then Prime- Minister Putin described the Russian status as a ‘Euro-Asian’ state, renouncing to the goal of Russia’s integration into the EU, and a reorientation of Russian policy towards the former Soviet space. He asserted Russia’s prerogative as an autonomous actor on the world stage (Maass 2016: 30-31; Schuette 2004). While Yeltsin in 1994 stressed the importance of European integration, in the Medium-term strategy from 1999 the concept of integration into a common European space was rejected. Furthermore, the notion of integration had a different sense in Moscow from what the European Council had in mind. In fact, Russia wanted to use the experience of integration in the EU as an example for consolidating and developing its own integration processes with the smaller CIS countries (Adomit 2010: 11). The Russian response to the Common Strategy showed the position of the Kremlin’s anti-western turn after NATO’s Kosovo involvement in 1999 and the reticence of Moscow to be an ‘object’ of any EU strategy or policy. According to Russia’s own strategy, the main objective of EU-Russia co-operation is to balance US power and improve Russian access to EU markets and money (Barysch 2004: 11-12). The PCA signed in 1994 and the Medium-term strategy delivered in 1999 were the fundamental

101 features of Russian policy towards the EU inherited by the Putin presidency in 2000 (Smith 2004: 2). Once Vladimir Putin came to power in 2000, the relationship between the EU and Russia changed fundamentally. The EU had until 2004, when the ENP was launched, a ‘fairly monolithic policy towards Eastern Europe’. The EU developed similar agreements and had similar objectives for the post-Soviet countries. However, it reserved a special place for Russia, such as new policies were developed for Russia first, after that for Ukraine and later for other post-Soviet countries. Yet, this ‘monolithic policy’ changed with the launch of the ENP (Cierco 2013: 127). The EU is, on one hand, an international actor with a proactive foreign policy pursuing implicit or explicit objectives. On the other hand, the EU plays an important impact on its neighbourhood (Casier 2007: 74-75). The EU’s Big-Bang enlargement in 2004 has redrawn the political map of Europe. As it was emphasised in the subchapter 2.1, with the EU enlargement in 2004, the EU developed the ENP offering to the neighbouring countries to facilitate the development of a ‘ring of friends’. The Wider Europe initiative (2003) included as well Russia along with ‘Western NIS and the Southern Mediterranean’ in order to offer the ‘prospect of a stake in the EU’s Internal Market and further integration and liberalisation to promote the free movement of – persons, goods, services and capital’ (COM 2003: 4). However, after Moscow had started negotiations with the EU on the ENP, it decided to withdraw from the Wider Europe initiative. The reason was that Russia as influential actor, and a ‘five time bigger than the EU’ refused to be treated as a neighbour country of the EU. As a result, Russia and the EU agreed on the development of a strategic partnership on the basis of equality (Casier 2013). Thus, Russia preferred to develop a strategic partnership with the EU on the basis of equality outside the ENP framework. The Russian rejection of ENP was not because it did not want to cooperate with the EU but more about not wanting to be treated in the same framework as what it perceived as lesser nations. Russia preferred therefore to establish more direct and equal relations with the EU (Bildt 2015: 3). Another reason was that the EU 2004 led to an increasing influence of the EU and was seen as a serious challenge by Russia (Haukkala 2010: 168). Nonetheless, the interdependence between the EU and Russia continued to lead to many contacts which brought many disagreements between both sides. These disagreements became evident in the ‘new’ policy areas of EU competence such as Justice and Home Affairs, and foreign, security and defence policy and most notably over EU

102 enlargement to Central and Eastern Europe (Vahl 2007: 122). While the enlargement of the EU until 1995 was seen by Russia without much interest, the 2004 enlargement and the ENP raised suspicions in Russia. According to Hiski Haukkala, Russia felt insulted that is was grouped together with Moldova, Morocco and other countries in the Southern Mediterranean as a mere neighbour of the Union. For this reason, Russia insisted that the relationship with the EU should be ‘on the separate basis of an equal and mutually beneficial strategic partnership’ (Haukkala 2010: 165). This means that Russia did not want to join Europe by accepting EU principles and values, but it preferred to be an equal partner with whom the EU should negotiate these principles. Furthermore, Russia perceived the EU through as overly intrusive and unwanted encroachments on Russia’s own sovereignty (Haukkala 2010:165; Bildt 2015:3). After the launch of the ENP, Putin played ‘a more assertive role in the post-Soviet space’. This could be interpreted from two angles. First, due to the regime changes in Ukraine and Georgia through the Orange Revolution and Rose Revolution, Russia considered these regimes unfriendly, as it considered these regime changes as masterminded by the West. This fostered a more assertive foreign policy in particular in the neighbourhood. Second, the rising energy prices led to the creation of extra income for Russia and a renewed self-confidence after years of weakness (Casier 2016: 125). The 2007 EU enlargement of Romania and Bulgaria in 2007 brought the EU even closer to former Soviet countries especially Moldova, Ukraine and Belarus but also to the South Caucasus (Armenia, Azerbaijan, Georgia). The Orange Revolution in Ukraine raised EU interest in Eastern countries. The Rose Revolution in Georgia pushed the EU to extend the interest as well to the South Caucasus. Both ‘revolutions’ increased the EU enthusiasm towards the ENP eastern dimension and led to offer support for the countries that wanted to follow the European democratic way. Russian discontent over the ENP came in 2007 when the Foreign Minister Serghei Lavrov declared that ‘the CIS space has turned into a sphere for geopolitical ‘games’, which involves such instruments as ‘democratorship’. Let us be frank, the main criterion used to measure a nation’s level of democracy seems to be its readiness to follow in the footsteps of other countries’ policies’ (Lavrov 2007)24. As a result, when some countries expressed their willingness to follow a pro-EU course, Russia tried to sabotage this process through a multitude of manoeuvres. Using energy policy for influencing the countries from

24 See Lavrov’s speech (2007) The present and the future of Global Politics, available at https://eng.globalaffairs.ru/number/n_8554 [accessed on 02 Nov 2019].

103 the former Soviet Union, an approach known as ‘energo-diplomacy’, was considered as an appropriate way of increasing (or at least demonstrating) Russian influence in its neighbourhood (Rotaru 2008: 104). Russia used all possible leverages and pressure for destabilising the economic and political situation in the former Soviet countries. These countries therefore faced serious difficulties in finding their own way after independence. In a way, these countries became pawns in a permanent dispute between Russia and the West. In Ukraine’s case, Russia wanted to punish the country for choosing a pro-western government (Yushchenko) after the Orange Revolution. Hence, after some disputes between the Ukrainian Government and Gazprom on the increasing price for gas supplies, Gazprom decided to stop the gas supply towards Ukraine and to the rest of Central and Eastern Europe (BBC Moldova 2006). Moldova was affected as well by this gas crisis. Thus in 2006, gas prices roughly doubled. Furthermore, Russia introduced an embargo on wine, which was the main export item of Moldova towards Russia (Adevarul 2017 and Adept Democracy 2006). For Georgia, Gazprom doubled the price for gas as well. Moreover, Georgia’s key exports of wine and mineral water were banned on the Russian market for four months (Ziarul Financiar 2006). As Gazprom held a monopoly in the gas markets of these countries, Russia used this political weapon to control its neighbours, considering that the countries of the former Soviet Union were vulnerable. As a result, it can be stated that Russia has used an intimidating bargaining policy towards some of ENP East countries. The EaP was not seen with enthusiasm by Russia either. Two months before the official launching, Foreign Minister Lavrov stated that ‘we are accused of having spheres of influence. But what is the Eastern Partnership, if not an attempt to extend the EU's sphere of influence, including to Belarus’ (EUobserver 2009). Russia had perceived the EaP as an instrument for using ‘geopolitical conditionality’ that would be reoriented against the Russian interests (Secrieru 2010: 16). The Permanent Representative of Russia to the EU Vladimir Chizhov pointed out that the former Soviet countries will be forced to choose between ‘either bright future with the EU, or dark past with Russia’ (Secrieru 2010: 16). Whereas, the former Swedish Foreign Minister Carl Bildt argued that ‘the EaP is not about the sphere of influence. The difference is that these countries themselves opted to join’, Lavrov did not change his position and declared during the press conference after a meeting of the EU-Russian Permanent Cooperation Council that ‘we heard statements

104 from Brussels that it’s not an attempt to create new zones of influence and not a process directed against Russia. We want to trust these declarations, although some of the EU’s comments disquieted us’ (Rotaru 2018: 86). It was clear to observe that, Russia had a different attitude towards authoritarian regimes such as Belarus, Azerbaijan and in as compared to Georgia Moldova and Ukraine. This could be explained by the fact that Moscow understood the democratic and Western orientation not just as a foreign policy challenge, but as a risk for Russian internal politics that could destabilise its authoritarian itself (Neljas 2018:2). Therefore, Russia used different tools in the region to increase instability such as annexation of Crimea in 2014, aggression in the Eastern part of Ukraine, support for the separatist regions, pressure on former Ukrainian president Viktor Yanukovych not to sign the AA with the EU in 2013, using of soft power instruments as ‘carrots’ in the case of cheap gas and access to markets and ‘sticks’ in the case of gas and trade sanctions. Furthermore, Russia has seen the EU as ‘messianic project of exporting democracy’ and the ENP as the establishment of ‘an exclusive ideological underpinning of the European Union’ (Tuohy 2016: 5-6; Euroactiv 2015). Apart from that, Russia repeatedly stated that the former Soviet countries must be under its influence so that it still plays a key role in the East European region. As Russia has understood the EaP as aggression on its geopolitical sphere of influence, the initiative became difficult to develop. EaP countries came into a continuing economic and politic instability due to the tensions between the EU and Russia. As a consequence, while a few EaP countries still wanted to be closer to the EU, Russia has been punishing them through different tools such as gas wars, import bans and secessionist conflicts.

* * * The process of Europeanization promoted by the EU in the ENP region can be seen as partially effective. Through the mechanism of neighbourhood Europeanization, that crossed the border of the EU, western-oriented countries were encouraged and supported in their reform efforts. It has to emphasised that for the countries covered by the EaP, the process of Europeanization is mostly a ‘soft’ political reform rather than a ‘hard’ one as compared to accession countries, where the conditionality for future EU members consists e.g. in high penalties by the European Court on the one hand, and an ‘open door’ membership on the other hand.

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Regarding EaP countries, it can be argued that EaP is rather a ‘soft’ policy of Europeanization because it consists of the ‘diffusion of specific practices’ and policy transfer for those countries that are involved in the implementation of ENP tools (Celeta and Coletti 2015: 19). In this situation, the conditionality for ENP countries remains weak because an ‘open door’ is not existing. Even the ‘more for more’ principle seems resulted in permanent ‘zig zag’ policies that lead to instability, incertitude and low political will. Yet it is worth to mention that the EU financial assistance through ENP tools has increased, as for ENPI it was EUR 12 billion, for ENI EUR 15.4 billion, and for NDICI the proposed budget is EUR 22 billion. This shows the EU continued interest to foster stabilisation, security and prosperity in neighbourhood regions. With a decade of EaP, we can take a stock of challenges as well as progresse. Even if, the EaP has ‘diverted from its original path’ and ‘instead of transformation, it speaks of stabilization and differentiation’ (Nixey 2019) it can be argued that there is progress in the fact that three EaP countries signed the EU agreements AA and DCFTA and that they have received visa liberalisation. Russia, as regional actor has played an important role in the Eastern region. Once the EaP was launched, Russia ‘tolerated’ the initiative because it did not consider it of vital importance, as the perspective of membership was absent for this group of former Soviet countries. However, as the EU initialled and later signed the AA and DCFTA, Russia was determined harder and to ‘reshape its approach and policy’ towards EaP countries (Rotaru 2018: 165). In that topic, Russia exercised its power in all EaP countries. In Ukraine, it annexed a foreign territory (Crimea 2014) and provoked an armed conflict in Eastern Ukraine. It maintains separatist territories in Moldova (Transnistria), Georgia (Abkhazia and South Ossetia), and maintains status quo on Armenia and Azerbaijan on Nagorno Karabach. Belarus, in the meantime, remains under varying but still strong Russian influence. To sum up, the EaP area is a dynamic region and the influence of Russia is still very strong. In this way, the EU might have to rethink its policies especially towards the AA-EaP countries Georgia, Moldova and Ukraine, in order to give them more opportunities such as a future membership perspective or at least send stronger signals ‘to keep the door open’. As a result, the process of Europeanization could still be stronger and more conditional for the countries with more ambitious and willingness policies to move closer to the EU.

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Chapter III The Comprehensive Institution Building programme – a new building approach for the Eastern Partnership countries

This chapter presents a general overview on the main EU institution-building instruments for the ENP region, namely Twinning, TAIEX and SIGMA. The main focus will be on their use in the EaP countries (as opposed to the ENP South region). The mentioned instruments are similar in purpose to the CIB programme, the EU institution- building instrument that is analysed in this thesis. The Europeanization through institution-building process in EaP countries, discussed in this thesis, may be interpreted as a top-down approach. Through Europeanization as institution-building, the EU promotes the respect of rule of law, rapid institutional reform, and enriching the experience of the civil servants with EU practices. The first part of this chapter presents an analysis of the EU institution-building instruments within the EaP region and consists of two sub-parts. The first one shows a general overview on all projects implemented under Twinning, TAIEX and SIGMA from 2004 to 2009 in the ENP East region countries. The second one portrays the Twinning, TAIEX and SIGMA projects in the EaP countries from 2009 until 2017. The second part of this chapter outlines the ‘anatomy’ of the CIB programme as well as the implementation of the programme in the EaP countries. The CIB program is described in general terms. This part presents the main CIB clusters that are implemented in all EaP countries, as well as the EU financial assistance to individual countries. The last part of this chapter offers a SWOT evaluation of the CIB programme in the EaP countries.

3.1. Institution-building instruments in the EaP countries

One of the main aims of the EU in the EU candidate countries, potential candidates and EaP countries is the transformation and reforming of state institutions. Strong public institutions offer credibility, welfare and efficiency in relation with the citizens. The EU uses tools such as SIGMA, TAIEX and Twinning for institutional building capacity in the candidate and potential candidate countries, while for ENP countries, the EU developed these tools in 2004 for Twinning projects and respectively in 2006 for TAEX projects (Russu 2016: 26-27). Furthermore, for the EaP in 2009, it was developed an individual

107 program for institutional building namely the CIB Programme (see more detail sub-chapter 4.2). Institution building was understood as a way for stability in the partner countries. The ENP adopted similar instruments as those created for enlargement strategy: TAIEX, Twinning and SIGMA. These instruments were introduced chronologically in order to help ENP countries build the ground for public governance institutions (Tulmets 2011: 7). These tools strengthen the EU’s ability to provide financial and technical support and assistance in key reform areas in the EaP countries. EU financial tools like Twinning, TAIEX SIGMA are available for the EaP countries and it is necessary to explain their importance and role in the EaP partner countries in general because these instruments are complementing each other with the CIB Programme which will be described in the subchapter 3.2. The assistance offered by the EU through these instruments for both candidate countries and pre-accession countries as well as for the ENP countries contributes to the capacity building, institutional consolidation, legislative approximation and aligning regulations. The assistance is accessible firstly through either direct technical assistance by the involvement of a group of experts or by grants that are / available through public auction (specifically for pre-accession and candidate countries). The second type of the assistance is the involvement of the EU Member States in providing adequate expertise to support the transition process in the ENP region and specifically in the EaP countries (Barbulescu 2018: 57). Figure 3.1 presents the Twinning, TAIEX and SIGMA projects for the ENP East region for 2004-2009.

Figure 3.1 Number of Twinning, TAIEX, SIGMA projects in the ENP East region 2004-2009

Armenia, 39

Ukraine, 86 Azerbaijan, 40

Belarus, 4

Moldova, 52 Georgia, 36

Source: designed by the author based on data from Kleenmann 2010: 12; EuropeAid Report 2009.

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The ENP East countries implemented 257 projects on Twinning, Taiex, SIGMA over the period 2004–2009. These projects mostly focused on the following issues: finance and internal market, trade and industry, justice and home affairs, environment, energy and agriculture (EuropeAid Report 2009). These institution-building projects were implemented within EU Action Plans developed between the EU and the respective partner country. Until 2006, the projects were developed under the TACIS financial instrument, from 2007 until 2013 under ENPI, and from 2014-2020 under ENI. In the following part of the chapter, it will be briefly analysed all three tools provided by the EU in the EaP countries. The first two instruments TAIEX and Twinning are developed by the European Commission through providing technical assistance and expertise. The third instrument SIGMA is operated by the OECD in cooperation with the EU and it is based on top-down assistance, from a group of experts on top level towards the general administrative system.

TWINNING From its inception, the Twinning instrument was intended for the candidate countries and potential candidate countries in order to help them to acquire the necessary skills, capacities and expertise for the implementation and enforcement of the EU legislation. Since 2004, the Twinning instrument has been available for the ENP countries. However, the implementation of this instrument for the ENP region is different. On the one hand, for candidate and potential candidate countries the Twinning tool is targeted on transferring facilitation, implementing and enforcing the EU law for preparation of these countries to become a member of the EU. In this way, the assistance is more focalised to obtain concrete measurable and sustainable results. On the other hand, in the ENP countries, the Twinning tool is focused more on the strengthening the administrative capacities of public administration institutions through preparing the ‘new’ civil servants. The projects implemented through this instrument contribute to the harmonization of national legislative and procedural frameworks as the EU require according to the provisions of the EU Agreements (Barbulescu 2018: 65). The main aims of the Twinning projects in the ENP countries are:

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- To upgrade and modernise the institutions in a partner country through training, reorganisation as well as drafting of laws and regulations modelled on the EU acquis. - To send to the beneficiary country at least one Resident Twinning Adviser (RTA) for at least for twelve consecutive months, to arrange a number of medium and short-term missions, all to be carried out by public officials of the EU Member States institutions. - To work both for the beneficiary country and the EU partners towards commonly agreed results, which should be measurable and precise. - To approximate national legislation, regulations and standards to those of EU Member States in the framework of EU agreements signed with the EU (EC, Twinning). The role of the Beneficiary partner is to contribute to the development of the project with suitable projects according to their EU Action Plans, EU agreements, with human resources, developing training and conferences and provide office space for the EU experts. The role of Residential Twinning Advisor (RTA) is important as well in the development of the Twinning projects in the EaP countries because it provides expertise from the EU sides to the beneficiary country. Furthermore, it represents, through its projects, a better connection of the neighbour partner to the EU’s institutional settings. The beneficiary country that develops Twinning projects influence institutional reform in the preparation and implementation of important laws and learned how to take into account the EU acquis. This facilitates in some wat the communication between the EU and its partners (Tulmets 2011: 8-10). The role of the Twinning tool in the EaP countries is to improve the administrative capacity of the public administration institutions, the reorganisation of the structure of the institutions, the approximation of national law and regulations according to the EU acquis and standards. These particularities are specifically for the EaP countries which implement the AA and DCFTA. From 2010 to 2017, 255 Twinning projects for the whole ENP region were implemented (see figure 3.2). The total value of Twinning projects in the neighbourhood countries was EUR 303.6 million (COM Report 2019: 216).

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Figure 3.2 Twinning projects in ENP countries: 2010-2017

60 50 40 30 49 20 36 39 36 32 29 28 10 0 6 2010 2011 2012 2013 2014 2015 2016 2017

Source: designed by the author based on data from COM 2019.

From the total Twinning funding for neighbourhood region, for the South region a total of EUR 153 million were allocated, while for East region were a total of EUR 149 million (COM Report 2019). Figure 3.4 shows how the Twinning financial distribution was divided between EaP countries.

Figure 3.4 Funding for individual EaP countries (%) 2010-2017

Armenia 7% Ukraine 32% Azerbaijan 24%

Moldova Georgia 19% 18%

Source: estimation by author using data from COM Report 2019.

In the EaP countries, the Twinning projects are seen as a good way to improve institutional reforms as well as to create the new ones. This is a good opportunity for the EU Member States as well because the experts from these countries have the possibility to share their expertise as lessons learnt from their country to the ones which are interested to follow the EU way. In this way to facilitate the communication between the EU Member States and the EaP partner countries.

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TAIEX The Technical Assistance and Information Exchange (TAIEX) was set up in 1996 by the European Commission to share technical expertise in all fields of EU legislation and to support the faster implementation of the EU acquis in the candidate countries (EuropeAid Report 2009; 2012). The TAIEX projects are delivered under three types of assistance: - workshops - where EU Member State experts present specific areas of EU legislation in workshops to a large number of beneficiary officials; - expert missions - where EU Member States expert(s) are sent to the beneficiary administration to provide in-depth advice on the transposition, implementation or enforcement of a specific part of EU legislation; - study visits - where a group of three practitioners from a beneficiary administration take part in a study visit to an EU Member State’s administration (DG ENP and Enlargement). From its inception, TAIEX was implemented, as Twinning, in the pre-accession and candidate countries, and the implementation of these projects was widened on different acquis areas such as strengthen democratic institutions, the modernisation of public administration as well as the harmonisation of the legislation to the EU standards (Barbulescu et all 2018: 69-70). In January 2006, the European Commission extended its TAIEX operations to the neighbourhood countries in both regions including Russia. The main goal of TAIEX in the ENP countries is to ‘provide targeted technical assistance to aid the partner countries in understanding and drafting legislation related to the action plans and to help them with implementation and enforcement’ (EC: Council Decision 2006, art.1). The TAIEX tools have the following objectives in the neighbourhood regions: - to strengthen the public administration; - to approximate the EU acquis; - to achieve the priorities of the Neighbouring countries & Russia, as stated in the Action Plans and National Indicative Programmes or Roadmaps; - to reinforce networks between Neighbouring countries & Russia and EU MS; - to pave the way for future Twinning projects (EuropeAid Report 2009). The TAIEX project assists neighbouring countries with regard to the approximation, application and enforcement of EU legislation. This tool contributes ‘to the delivery of appropriate tailor-made expertise to address problems at short notice. TAIEX

112 provides ‘peer-to-peer’ assistance by public experts from the EU Member States to partners and stakeholders of the Partner Countries’ (EuropeAid Report 2009). Since 2007, a total of EUR 38.5 million were used for TAIEX, mainly in the Neighbourhood East (COM 2014). The aim of TAIEX, apart from to strengthening public institutions and approximation the EU acquis, involve also achieving the priorities of the ENP Action Plan, ENPI and ENI (Tulmets 2011: 10). Furthermore, the financial assistance within TAIEX projects consists in: . expert mission, . study visit, . workshops. As it is presented in Table 3.1, TAIEX projects in the ENP eastern region had a large number than in the ENP South region. This may be explained that some countries from the Eastern region shared the interest to follow the European integration way so that they were more involved in aligning their national law to the EU acquis (Tulmets 2011: 10).

Table 3.1 TAIEX Projects in the ENP countries between 2007-2017 ENP 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 countries Algeria 4 18 22 18 12 14 15 19 25 Egypt 4 10 10 17 41 11 19 22 22 26 31 Israel 9 8 11 13 41 14 15 20 21 27 29 Jordan 2 4 11 13 36 11 17 14 20 12 15 Lebanon 1 2 9 12 10 19 21 16 11 13 Lybia 1 8 9 2 - - - - - Morocco 3 13 11 19 46 19 9 13 48 35 22 Palestinian 3 4 7 23 11 9 3 3 4 Auth Tunisia 2 6 3 12 23 18 13 22 12 27 44 Total 20 42 56 113 231 126 115 135 157 160 183 ENP South Armenia 2 11 7 20 40 25 20 25 5 13 20 Azerbaijan 1 2 1 11 15 36 36 17 35 21 26 Belarus 1 2 7 15 25 38 25 18 12 15 23 Georgia 5 8 11 26 50 23 29 31 33 19 27 Moldova 23 18 13 19 73 69 74 43 48 53 46 Ukraine 10 12 31 62 115 61 63 49 110 97 82 Total 42 53 70 153 318 252 247 183 243 218 224 ENP East Source: Tulmets 2011 (calculation from 2007-2011); Author estimation and calculation (from 2012- 2017) using data from EuropeAid Report 2012, 2013, 2014, 2015, 2016, 2017.

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The activities carried out from 2007 to 2017 with TAIEX support focused in particular on the following four areas of intervention: justice and home affairs, energy, transport and environment, internal market and agriculture and food safety.

SIGMA Support for Improvement in Governance and Management (SIGMA) is a joint EU and OECD initiative that was initiated in 1992 and is financed by the EU through a centralized budget. SIGMA projects are focused on strengthening public management in areas such as administrative reform, public procurement, public sector ethics, anticorruption, and external and internal financial control. Initially, it was set up to support central and eastern European and pre-accession countries. In 2008 SIGMA25 was extended to the ENP countries26 and has implemented from 2008 to 2013 around 120 activities in the sectors of civil service, administrative justice and integrity, external audit and financial control, budgeting and public expenditure management, public procurement policy and regulatory systems, with institutions such as public procurement agencies, civil service agencies, courts of auditors, parliaments, ministries of finance and budgetary authorities (ENPI Report 2014: 56). SIGMA has the following activities: - to provide short to medium-term (from 1 day to 12 months) support to improve Governance and Management on the basis of requests from the Beneficiary Countries; - to assist national reform teams by providing expertise by peer practitioners including SIGMA staff (international civil servants) or public servants borrowed short-term from their respective MS administrations; - to assess reform progress and identify priorities on the basis of the EU acquis and assist decision-makers and administrations in institutional strengthening; - to facilitate assistance from the EU and other donors by helping to design projects and implement action plans;

25 See detailed information regarding SIGMA projects in ENP countries in EuropeAid Activity report Twinning, TAIEX and SIGMA within the ENPI 2009, 2010, 2011, 2012, 2013 26 SIGMA it is currently active in 11 Neighbourhood countries (Algeria, Armenia, Azerbaijan, Egypt, Georgia, Jordan, Lebanon, Moldova, Morocco, Tunisia and Ukraine) with more details see: European Commission (2014). ENPI 2007 – 2013: overview of activities and results. Report, DEVCO EuropeAid, Brussels. 114

- to improve and upgrade public governance in order to facilitate closer economic integration and political co-operation between the EU and its neighbours (EuropeAid Report 2009). As in 2008, SIGMA was extended to the neighbourhood regions, in the EaP countries were developed projects related to the public administration reforms in Azerbaijan, Georgia, Moldova and Ukraine, public internal financial control in Armenia, Azerbaijan and public procurement in Armenia, Moldova and Ukraine. Since 2008, EUR 17.7 million have been mobilised for the use of SIGMA in the Neighbourhood (COM 2014: 56). Figure 3.5 presents financial assistance through SIGMA projects in the EaP countries.

Figure 3.5 SIGMA projects within EaP countries 2008-2013

Budget dibursed by country 2008-2013 (eur)

Ukraine, 230469

Armenia, 632328

Moldova, 334520

Georgia, 592668 Azerbaijan, 293466

Source: compilation by the author from EuropeAid Report 2008, 2009, 2010, 2011, 2012, 2013.

The projects implemented under the SIGMA programme covered the following areas:  Civil service, Administrative Justice & Integrity  External Audit and Financial control, Budgeting and Public Expenditure Management  Public Procurement  Policy and Regulatory System. For the period of 2014–2020, SIGMA continues to work in partnership with the European Commission (Directorate-General for Neighbourhood Policy and Enlargement

115 negotiations) under ENI. The programme is active in eleven ENP countries: Algeria, Armenia, Azerbaijan, Egypt, Georgia, Jordan, Lebanon, Moldova, Morocco, Tunisia and Ukraine (as well as under ENPI). Under ENI, SIGMA works with the following institutions:  Centre of government and key co-ordination ministries;  State agencies such as public services, public procurement;  Independent oversight bodies such as Supreme Audit Institutions, ombudsmen;  Parliaments (SIGMA). In general, the role of SIGMA is to ‘support European Neighbourhood partner countries to make significant progress in their public governance reforms by enhancing the capacity of the public administration and transfer of know-how and best practices to reinforce horizontal systems of public governance through provision of high level European public expertise’ (COM 2015c: 2). The combined funding for TAIEX and SIGMA for the period 2014-2017 is indicatively EUR 37 million (EEAS, COM 2014: 7) and for the period 2018-2020 is indicatively EUR 32 million (EEAS COM 2018: 11). Both instruments are used within neighbouring countries for promoting good governance and approximation of legislation with the EU. Since three EaP countries (Georgia, Moldova and Ukraine) signed AA with the EU, the role of SIGMA in these countries is focused mostly on public administration reform. In this way, SIGMA has already assessed ‘the state of play of national administration against the principles of public administration’ in Moldova, Georgia and Ukraine. With financing from the Multi-annual Indicative Programme 2014-2017, SIGMA has contributed to the elaboration of Public Administration Reform (PAR) strategic frameworks in Moldova, Georgia and Ukraine and ‘delivered hands-on assistance to support implementation of PAR in line with country priorities in all Neighbourhood partners’ (EEAS, COM 2018: 4- 5). To sum up the institution building instruments Twinning, TAIEX and SIGMA prepare the ground for increasing the coordination between the EU Member States and neighbourhood partners. In this way, these tools provide a powerful platform for exchanging best practices for the implementation of the EU Action Plans, ENPI and ENI reforms and present an effective mechanism for the approximation and adaptation of the

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EU best practices and standards in the EaP countries. In this way, these tools became a key instrument for co-operation between the EU and ENP countries.

3.2. Comprehensive Institution Building programme at a glance

As described in the previous chapter, the EU intended to reinforce its political relations with the countries on its borders by launching the ENP in 2004 (for southern and eastern neighbourhood countries) and the EaP in 2009 (for eastern neighbourhood/partnership countries). The EaP Initiative, initiated by the 2009 Prague Summit, proposed (i) a deepening of political relations with the six EaP countries of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, through the negotiation of AA. It offered (ii) stronger economic relations through the negotiation of DCFTA. (iii) Better mobility for partner countries’ citizens was envisaged through the negotiation of mobility partnerships and the fall of visa requirements for entering the EU (Joint Declaration Prague 2009). To enable the planned strengthening of political, economic and mobility relations with the new Eastern Partnership countries, the EU emphasised the need for institutional reform in their partners’ administrations. As the 2008 Communication of the European Commission on the EaP made clear, ‘a sufficient level of progress in terms of democracy, the rule of law […] will be a pre-condition for starting negotiations and for deepening relations thereafter’ (COM 2008: 4). Therefore, the Communication announced a new approach to address administrative capacity in partner countries, called the CIB Programme ‘to assist partners in meeting these conditions and to help them meet the commitments stemming from the AAs, a CIB Programme for improving administrative capacity in all relevant sectors of cooperation will be developed with each partner co-financed, through ENPI’ (COM 2008: 4). This document also described CIB as an operational objective of the EaP (COM 2008: 20) and allocated a total amount of MEUR 186.5 from ENPI budget years 2010- 2013 for the CIB (COM 2008: 23), but did not provide further details on the new programme. Under the ENI budget 2014-2020, CIB is no longer active. However, CIB has inspired many institution-building projects in EaP countries, which are implemented in this budget period (see table 2.3 ENI financial support for EaP countries).

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The bolstering of the relations between the EU and EaP neighbours through the negotiation and implementation of the AA, DCFTA, visa liberalisation, the support to social and economic policies and cooperation in the field of energy may require strong institution building, because without institutional capacity the AA and DCFTA and other reforms can be correctly implemented neither by the EU nor by partner countries (Tulmets 2011: 6). In Table 3.2 there is presented the EU Agreements developed by the EU in the EaP countries. The AA is the most important document of the legal framework between the EU and the EaP countries. Regarding Belarus, the EU did not ratify a Political and Cooperation Agreement, given the authoritarian rule of President A. Lukashenko. As the ENP was launched, the EU adopted Action Plans with Azerbaijan, Armenia, Georgia, Moldova and Ukraine. Belarus was excluded from the ENP process. However, Belarus was included in the EaP as a ‘reward for some prudent first steps towards reforms’ (Keukeleire and Delreux 2014: 259). Belarus did not start negotiations on an AA, and, as a consequence, was not included in the CIB programme.

Table 3.2 The EU agreements with the EAP countries Armenia Azerbaijan Georgia Moldova Ukraine Belarus Partnership September 1999 July 1999 June 1998 February No PCA and 1999 1998 Cooperation Agreement (PCA)

Start of 19 July 2010 July 2010 July 2010 January March 2007 No EU negotiations on 2010 Action AA (DCFTA) Plan / No AA Close July 2013 2013 – July 2013 March 2013 2011 negotiations on negotiations AA (DCFTA) was stopped Initialled AA In September February 2017 November November 2012 2014, negotiation of 2013 2013 announced a November the join to comprehensive 2013 Custom new suspension of Union (Ru– agreement has preparation of Be-Ka) started AA Signing AA 27 June 27 June 27 June 2014 2014 2014 Source: compilation by the author.

The rest of this chapter first presents the main ingredients of the CIB approach, as planned by the European Commission in the relevant policy papers and guidelines.

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Secondly, it gives an overview of the implementation of CIB in the EaP countries through EU-financing from budget years 2011-2013. Thirdly, the practical application of CIB is described and analysed on the basis of the examples of two EaP countries, Moldova and Georgia. Fourthly, the results of the CIB so far are discussed and provisional conclusions are drawn. Proposals for possible improvements of similar programmes are given where this seemed possible.

3.3. CIB: Description of the new programme

EaP was officially launched during the Summit of EU and East European leaders, which were in May 2009 in Prague (see chapter 2.2). The Summit declaration stated that ‘the EU will develop CIB Programmes individually with each partner country in order to improve their administrative capacity, including through training, technical assistance and any appropriate innovative measures’ (Joint Declaration Prague 2009: 7). After the Prague Summit, the concept of the new CIB programme was developed by the European Commission in more detail in a note that was presented to the ENPI Committee in September 2009 and to the partner countries in ‘EaP Road-shows’ in September-October 2009. The note ‘Building core institutions to deepen our relationship’ described the CIB programme as a key tool for eastern partner countries to sign and implement AA and DCFTA with the EU. The AA including DCFTA succeeded the EU-Moldova Partnership and Cooperation Agreement signed in 1998 and the ENP Action Plan started in 2005. AA and DCFTA had been first mentioned in the EaP Prague Summit Declaration where the EU and EaP Partners were agreed to develop ‘under the EaP umbrella the foundation of the AA between the EU and those partner countries who are willing and able to comply with the resulting commitments’ (Council of the EU 2009: 7). They had the aim to deepen political association and to foster economic integration ‘by promoting future convergence towards EU legislation and standards and providing for mutual market access’ (Council of the EU 2009: 8). Both types of agreements required considerable reforms in the institutions that commit to the procedures and obligations stemming from them. The CIB programme of the EaP was created to respond to these needs (European Commission 2009a). The role of the CIB programme was generally described as:

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 an offer of additional EaP resources aimed exclusively at institution-building to deepen the relationship between interested EaP countries and the EU;  a more structural medium-term approach to institution-building in core institutions;  a closer link between reform dialogue and progress in institution-building;  possibility for innovative approach;  a closer partnership between EaP countries, the European Commission, EU Member States and other donors (European Commission 2009a). According to the note ‘Building core institutions to deepen our relationship’, the institutions can be a minister, an agency or a government institution that have a specific public sector responsibility. A cluster of institutions that have a shared administrative responsibility in the area which is central for fostering integration with the EU could be included as well. The institution that coordinates the EU integration process may be also considered a CIB institution because the relation between the core institutions and the EU will depend in part of the coordinating institution (European Commission 2009a). The role of CIB is focused on bilateral cooperation and provides the foundation of the AA and DCFTA. To function successfully, the CIB should be based on some important factors. Firstly, is aimed to help partner countries to accomplish the preconditions for concluding an AA and a DCFA and meet the commitments stemming from such agreement. Second, is focused on core institutions that are intended at upgrading the institutional capacity of a very limited number of core institutions that are central in the AA and DCFTA. Third, it is clear commitment that provides additional support for a reform effort subject to a preceding political agreement and contribution from the partner countries. Fourth, the agreement is comprehensive, this means that cover all the elements that can ensure that at the end of the programme the targeted institutions are able to assume on their own the obligations stemming from the new agreements. Finally, the CIB program is open to other donors’ support to Institutional Reform Plans through funding and technical expertise. The new Members States transition experience is particularly relevant. A national CIB programme comprises two key ingredients: - a Framework Document, which identifies the institutions to be strengthened. It outlines the key issues to be tackled and the possible tools to be mobilized. It is agreed through a “memorandum of understanding” which is co-signed between the EU and the partner country;

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- Multi-annual Institutional Reform Plans (IRP) (or Strategic Development Programmes (SDP) outlining the priorities to be pursued in order to upgrade the institutions and identify the measures to be taken, the necessary expertise and the funding sources. These plans are prepared and adopted by the partner country (European Commission 2009b; Tulmets 2011: 13). In order to prepare a Framework Document, the European Commission and the EU Delegations in the EaP partner countries analysed the relation with the EU of the specific country focusing on the ENP progress report, the monitoring and implementing of the ENP Action Plans, the reports from sub-committee, DCFTA related country assessments, the activities of the EaP multilateral platforms and the partner country’s agenda. This analyses helped to identify the key reform challenges in advancing toward and AA and DCFTA and a list of core institutions that had an important role in implementing the reforms. In the end, the institution which was identified that are suitable for the implementation of CIB were selected and listed in the Framework Document that is to be covered by the CIB (Tulmets 2011: 13). Once the content of an FD is agreed upon by the European Commission and EaP-country, a Memorandum of Understanding is signed and the operational phase begins. Once the Framework Document has identified the priority CIB-sectors in the partner country, the EU and respective government can prepare specific IRP for the targeted priority institutions. This process is officially led by partner governments. The role of the European Commission and the EU delegation in the partner country is to provide support through the process of the development of the CIB programme. Their support consists of providing technical assistance, organising TAIEX assessment missions and SIGMA programme for actions and measure to address the gaps identified and transfer of know-how. In this way, the EU makes sure that the partner country is able to develop the IRP. Each CIB institution develops the IRP that contains clear reform objectives, measure with actions and indicators, the means to be provided with a time frame for implementation and sources of funding if it is the case (Tulmets 2011: 13-15). In the document, ‘Guidelines for the preparation of the CIB under EaP (2nd version of 25.11.2009), the European Commission added more details on how CIB programmes shall be designed and implemented. These guidelines were mainly directed towards the staff in EU delegations directly working on CIB issues. According to the 2009 Guidelines, the activity of the CIB’s institutions is based on three factors: coherence, complementarity and synergies. The financial assistance for the

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CIB (see next chapter 3.4) is part of the National Indicative Programme (NIP) 2011-2013. In this context, the EU specified that it is important to ensure coherence in implementation between the CIB and the other measures of the NIP. In order to ensure coherence, the CIB builds upon relevant aspects of specific cooperation activities. Complementarity should be established between CIBs vertical focus on core institutions and more horizontal sectoral and cross-sectoral measures (European Commission 2009b). Coherence should be ensured between the CIB and complementary activities. It is necessary to exploit synergies within this programme as well as to create synergies between instruments and other EU policies and programmes in order to better results and maximising the impact of the combined interventions (European Commission 2009b: 3; European Commission 2010). The main actors in the CIB Program are partner countries and the Commission. The role of the partner country is to delegate a governmental body that is responsible for ensuring political coordination of the negotiation and implementation of the Agreements, ENP policies and Action Plans Association Agenda. The responsible institution should have sufficient political authority in relation to other institutions such as ministries, agencies, governmental institutions that take part in the implementation of the AA and negotiation process in order to be able to request specific actions and arbitrate where necessary. While this governmental body may not be the one in charge of the implementation of Community assistance, it should be able to ensure that assistance is consistent ‘Agreement driven’. According to the CIB Guidelines, this governmental body institution is the logical counterpart. Within this body, the partner country should appoint a CIB coordinator at a senior level who would ensure coordination within the Government and act as the interlocutor of the Commission. The CIB coordinator is responsible for the joint preparation of the Framework Document (FD) and, as the framework document is accepted, is responsible for overall supervision within national assistance coordination framework. The European Commission is responsible for maintaining the overall coherence of the approach and for leading the work on the preparation of the Framework Document and is associated to the future development of the IRP and the implementation of the CIB. Even if the IRP is the responsibility of the partner country, the Commission together with the EU Delegation leads on the preparation of IRPs (European Commission 2009b: 3-4).

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Importantly, the 2011 CIB Guidelines include an annexe named ‘Potential key challenges and related core institutions that were seen as critical in the areas of (i) coordination of the EU integration process, (ii) rule of law, and (iii) trade-related issues (European Commission 2009b). These ‘key challenges’ were strongly used by the EU delegations in the preparation of Framework Documents and individual CIB actions. Therefore, they are presented in Box 1 below integrally, as far as areas (i) and (ii) are concerned. (The third area, trade-related issues, is not the focus of this thesis).

Box 1 Key challenges in the CIB institutions 1. Co-ordination of the EU integration process  Support transparent and efficient governmental institutional structure for implementing the ENP Action Plan.  Strengthen the administrative capacity of the institutions to be involved in the implementation of the ENP Action Plan and the negotiations and implementation of an AA.

2. Rule of Law Judiciary  Enhance capacity for the judicial supervision within the judiciary including implementation of disciplinary functions as established by law (Judicial Inspectorate).  Establishment of judicial self-governing bodies or enhance existing bodies via technical training and equipment procurement as an additional means to secure judicial impartiality and independence (Judicial Governing Bodies).  Enhance legal certainty in the conduct of economic life through the provision of technical training to judges and prosecutors on trade-related topics (DCFTA) Judiciary and Prosecutors Office. Law Enforcement bodies  Development of investigative capacity of prosecutorial service on pre-trial investigation techniques through improved coordination with other law enforcement bodies Judiciary, Police (Prosecutors Office)  Development of legal enforcement capacity through improved coordination between relevant law enforcement bodies Judiciary, Police (Prosecutors Office). Public control functions  Development and intensification of external and internal control functions over public expenditure and budgetary processes – Court of Auditors / Internal Audit departments of Ministries and public institutions  Development of risk assessment and anti-corruption Integrity Plans for all public institutions, including where necessary definition of specific ethical codes – all Ministries and public institutions.  Enhance the role of the Ombudsman in the protection and vindication of civic social and economic rights – Ombudsman’s Office.

3. Trade and Trade-related areas Non-Tariff Barriers  Preparation of elements required for full exchange of tariff offers (Ministry of Economy / Trade). Technical Barriers to Trade  Approximate national legislation with the EU acquis in area of technical regulations and standards, (Ministry of Economy / Trade).  Development of national institutional system for standardisation, accreditation on technical regulations, conformity assessment, methodology and market surveillance (Ministry of Economy / Trade).  Creation of national bodies in above areas or enhance existing bodies via technical training and equipment procurement (National Competent bodies). Trade Facilitation and Customs  Accomplish development of national customs modernisation strategy, including gap analysis (Ministry of Finance or Customs Administration)

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 Development and modernisation of risk management system, post clearance, including gap analysis  Enhance custom control and enforcement including information exchange and inspection powers  Simplification of procedures and information flow for trade operator Rules of Origins  Enhance capacity of competent authority in control of verification of rules of origins and certification  Raise awareness of EU rules amongst competent officials (Customs Departments of Ministry of Economy) Sanitary and Phytosanitary (SBS)  Enhance food safety control body via training and equipment procurement  Enhance veterinary and phytosanitary control bodies via training and equipment procurement  Enhance national testing laboratories via technical raining ad equipment procurement

Source: Annex II, Potential Key challenges and related core institutions that could be the target of CIB 2010: 18-20.

3.4. CIB budget and sectors within EaP countries

In this subchapter, it will be presented the general context of the implementation of the CIB programme in the EaP countries, the budget for each partner country within this programme and the main sectors that the CIB program was developed. Once the conceptual foundations of the CIB were laid out in the documents mentioned above, it was time to apply the new concept in practice. This was going to happen through the ENPI programme 2011-2013. This three-year programme was part of the larger seven-year ENPI period 2007- 2013 with a budget of EUR 11,2 billion, sub-divided in the periods 2007-2010 (EUR 5,621 20 billion) and 2011-2013 (EUR 5,710 54 billion). NIPs for 2011-2013 were negotiated between the EU Delegations and the respective partner countries, which fixed the broad aid cooperation areas for the three years period. From the ENPI budget 2011-2013, approximately EUR 167 million have been earmarked for the CIB programme27. This earmarking was done through the country NIPs 2011-201328 (COM 2014: 77). The NIPs were detailed through ENPI Annual Action Programmes (AAP) for each of the EaP countries for 2011, 2012 and 2013. Through the NIPs and the subsequent AAPs, the following CIB funds were foreseen for the five partner countries in 2011, 2012 and 2013.

27 In 2013 the CIB allocation for Armenia was reduced, in line with the general re-orientation of planned support for DCFTA implementation. As a result, earmarked funding for CIB totals EUR 141 million over the period 2011-2013 28 If the EaP countries do not implement CIB projects, or implementation is delayed, the CIB funds should be ‘fully or partly reallocated to other programmes’, according to COM (2010). National Indicative Programme 2010-2013.

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Figure 3.6 CIB financial assistance for the EaP countries (EUR/million)

Armenia, 32 Ukraine, 43.37

Azerbaijan, 19

Moldova, 41.16 Georgia , 30.86

Source: Compilation by the author based on data from COM (2010a) Moldova NIP 2011-2013; COM (2010b) Georgia NIP 2011-2013; COM (2010c) Armenia NIP 2011-2013; COM (2010d) Azerbaijan NIP 2011-2013; COM (2010e) Ukraine NIP 2011-2013.

The following table 3.3 gives an overview of the key CIB reform areas identified in the country NIPs 2011-2013:

Table 3.3 The CIB Programme in the EaP-countries Armenia Azerbaijan Georgia Moldova Ukraine CIB Ministry of Ministry for Deputy Prime State Minister for Coordinator Economy / Foreign Affairs Minister / Chancellery of Foreign Affairs Ministry for / Ministry of Minister of the Prim- Foreign Affairs Economy European and Minister’s Euro-Atlantic Office Integration Key a) a) Rule of law, a) AA a) Public a) Steering and reforms Strengthening the reform of negotiations and Administration implementation areas the institutional justice, freedom coordination; Reform; process for AA structure for the and security b) DCFTA / Rule of law and DCFTA; negotiations for areas; trade policy respect of b) Trade and the AA b) Reforms on reforms human rights state aid b) Justice, state c) Democratic and monitoring; freedom and governance and oversight bodies fundamental c) Migration security: civil servant freedom; d) Public c) Preparation areas; c) DCFTA Administration for the c) AA and preparation Reform negotiations of working the DCFTA towards further deepening of bilateral economic and trade relations Source: compilation by the author based on data from COM (2010a) Moldova NIP 2011-2013; COM (2010b) Georgia NIP 2011-2013; COM (2010c) Armenia NIP 2011-2013; COM (2010d) Azerbaijan NIP 2011-2013; COM (2010e) Ukraine NIP 2011-2013.

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Individual CIB Memorandums of Understanding were signed by the EU and the Partner Country on the following dates:  Moldova: May 15th, 2010  Georgia: October 2nd, 2010  Ukraine: October 14th, 2010  Armenia: November 26th, 2010  Azerbaijan: January 13th, 2011 The following section gives a short overview on the content of the CIB programmes in the five EaP countries (CIB in Georgia and Moldova will then be presented in more detail in chapters IV and V).

CIB in Armenia The CIB Programme in Armenia supported capacity building of a number of core institutions that were central in the negotiation and implementation of the EU agreements between the EU and Armenia. After the signing of the Memorandum of Understanding in November 2010, between the National Coordinator of the Programme, the former Minister of Economy Nerses Yeritsyan and the former Head of the EU Delegation to Armenia, Raul de Luzenberger, Armenia finalised the Framework Document and completed the CIB Assessment Grid for the identified CIB institutions (Delegation of the EU in Armenia 2010). The Framework Document was focused on three main areas, as it is presented in table 3.4. It was identified as well the CIB key institutions that were responsible for the implementation of reforms that were required under the CIB programme: - strengthening of the institutional structure for the negotiations for the AA; - preparations for the negotiations of the DCFTA part of the AA; - justice, freedom and security, anticorruption.

Table 3.4 Principal clusters of CIB Programme in Armenia Cluster I Cluster II Cluster III Strengthening the Justice, freedom and security Preparations for negotiations of the institutional structure for AA DCFTA negotiations

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1. Ministry of Foreign Affairs 4. Ministry of FA 9. Ministry of Economy 2. Diplomatic Academy 5. Ministry of Justice 10. SPS (Sanitary and phytosanitary 3. Translation Centre (MJ) 6. Ministry of Territorial measure) Administration 7. Migration Agency 8.National Security Services Source: compilation by the author.

Core institutions identified in the Framework Document developed Strategic Development Programmes (SDP), to be supported as part of the Annual Action Programmes (AAP) 2011-2013, by means of a variety of tools including technical assistance, Twinning, TAIEX, SIGMA and training (COM 2010c: 17). The Memorandum of Understanding and the FD has obliged both parties Armenia and the EU to cooperate fully and effectively on the identified reform challenges: preparing for negotiations, negotiating and implementing the Association Agreement; supporting reforms on justice, freedom and security; preparing for negotiations on a deep and comprehensive free trade agreement (Delegation of the EU in Armenia 2010).

CIB in Azerbaijan According to NIP 2011-2013, the allocation for the CIB programme in Azerbaijan was EUR 19.2 mln. The CIB institutions that were identified, as it is presented in the table 3.5 were Ministry of Foreign Affairs, Ministry of Economic Development, Ministry of Justice and Civil Service Commission. The CIB key institutions were selected to be responsible for the reforms for the areas that were identified as important by both the Azerbaijan Government and the Delegation of the EU in Baku and it is presented in the table 3.4 below (COM 2010d: 15).

Table 3.5 Principal clusters of CIB Programme in Azerbaijan

Cluster I Cluster II Cluster III AA and working towards Rule of law, the reforms on Reforms on state governance and civil further deepening of bilateral justice, freedom and security servant areas economic and trade relations areas

1. Ministry of Foreign Affairs 3. Ministry of Justice 4. Diplomatic Academy of Azerbaijan 2. Ministry of Economic 5. Civil Service Commission under the Development President of Azerbaijan Source: compilation by author.

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The CIB institutions in Azerbaijan played a key role in the deepening bilateral relations and trade relations with the EU. More than that, the CIB institutions played an important role in the area of justice and Home Affairs, including visa facilitation and readmission agreements. As a result, the EU played a significant role developing various projects such as ‘Support to the National Coordination Unit and Cooperation Agreement Implementation in Azerbaijan’ (AAP 2006), ‘Support to the Ministry of Economic Development’ (AAP 2006), ‘Support to the Improvement of legal and Technical Aspects of food quality and safety assurance and certification’ (AAP 2006) and ‘Strengthening of standardisation, metrology, conformity assessment and accreditation’ (AAP 2006) (COM 2011b AAP Azerbaijan). All these EU projects were developed and implemented with the support of Twinning, TAIEX and SIGMA technical projects. In Azerbaijan, the CIB Program was developed under three components. The first element consisted of the preparation for the implementation of CIB. Under this component, it was offered technical support to the Programme Administration Office (PAO) at the Ministry of Economic Development and to the Ministry of Foreign Affairs. Both institutions were identified as a key institution in the coordination of the AA and the CIB Steering Committee. The second component involved the developed of the CIB Institutional Reform Plans. It was developed three IRPs. These three institutions were rebuilding under the CIB program and were prepared to develop the following areas: a. Association Agreement and working towards the further deepening of bilateral economic and trade relations (30%), leading reform institutions: the Ministry of Foreign Affairs and the Ministry of Economic Development; b. Justice and Home Affairs, including negotiations on a Visa Facilitation Agreement and an EU Readmission Agreement (30%), leading reform institution: the Ministry of Justice; c. Strengthening human and institutional capacities related to negotiating and implementing the future agreements (40%), leading reform institutions: the Diplomatic Academy of Azerbaijan and the Civil Service Commission under the President of Azerbaijan (COM 2011b AAP Azerbaijan: 4). The third component covered technical assistance developed under Twinning, TAIEX and SIGMA projects for both CIB and ENP Action Plan. Actions under this component supported the development of institutional and administrative capacities for regulatory approximation and implementation of ENP AP commitments in sectors

128 recognised as priorities, as well as identification and formulation of actions related to implementation, follow up and monitoring of actions.

CIB in Georgia According to the NIP 2011-2013 Georgia received under the CIB Programme EUR 30.86m. The CIB Program in Georgia assisted and prepared the institutions building for the implementations of the EU Agreements. The Memorandum of Understanding was signed in October 2010 between the Georgian Government and the European Commission and with it, the Framework Document entered into force. Within the Framework Document, three clusters of institutions that require institutional strengthening were identified: 1. Cluster of institutions in charge of reform co-ordination and negotiation of enhanced agreements. 2. Cluster of institutions in the area of trade and on preparations for negotiations on the DCFTA. 3. Cluster of institutions in the area of democratic development, good governance and human rights (Oversight bodies) (COM 2011c AAP Georgia). The CIB institutions, which were part of the programme, beneficiated as well from the technical assistance offered by the Twinning, TAIEX and SIGMA. The CIB key institutions are presented in table 3.6. A detailed evaluation of the CIB institutions in Georgia will be presented in chapter 5.4.

Table 3.6 Principal clusters of CIB Programme in Georgia Cluster I Cluster II Cluster III AA negotiations and DCFTA / trade policy reform Democratic oversight bodies coordination

1. Prime Minister's Office 5. Public Defender's Office 8. National Service for Food 2. Ministry of Foreign Affairs 6. The Chamber of Control Safety, Veterinary and Plant 3. Office of the State Minister of 7. The Parliament of Georgia Protection European and Euro - Atlantic 9.The Georgian Accreditation Integration Centre 4. The Civil Registry Agency of 10. The National Agency for the Ministry of Justice Standards, Technical Regulations and Metrology

Source: compilation by author.

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CIB in Moldova According to the NIP 2011-2013 Moldova, the EU earmarked for the CIB programme EUR 41.16 million. The CIB was an ‘Agreement-driven’ programme that assisted Moldova with institution building for a number of core institutions that are central in preparing the ground for and implementing the future EU-Moldova Agreement (COM 2010a: 13). The Memorandum of Understanding was signed in May 2010 between the Moldavian Government and the European Commission. In the same time the Framework Document was developed and the CIB core institutions were identified and prepared for the implementation of the EU Agreements and EU reforms under ENP. In March 2011 the methodology for new Strategic Development Programmes (SDPs) was developed for all central public institutions. The SDPs fulfilled the role of Institutional Reform Plans (IRPs) foreseen to be developed as part of the CIB (COM 2011d AAP Moldova). In Table 3.7 the CIB institutions and the main areas under the CIB Programme will be presented. A detailed evaluation of the CIB institutions in Moldova will be presented in chapter 4.4.

Table 3.7 Principal clusters of the CIB Programme in Moldova Cluster I Cluster II Cluster III Public Administration Reform Rule of law respect for human DCFTA preparation rights and fundamental freedom

1.The State Chancellery 4.The General Prosecutor's Office 7. The Ministry of Economy 2. The Ministry of Finance 5. The Ministry of Internal Affairs 8. The National Agency for the 3. The Public Procurement 6.The National Anti-corruption protection of Competition Agency centre 9. The State Agency on Intellectual Property 10. The Ministry of Agriculture and Food Industry 11. The General Inspectorate for Phyto-sanitary Surveillance and Seed Control 12. The Sanitary Veterinary and Animal origin Food Safety Agency 13. The Ministry of Health's Public Health Service Source: compilation by author.

CIB in Ukraine The NIP 2011-2013 for Ukraine foresaw EUR 43.37 million for the implementation of the CIB Programme. The CIB Programme intended to improve the capacity building of

130 selected CIB institutions in the negotiations and implementation of the EU agreements such as AA and DCFTA developed between Ukraine and the EU. The CIB Framework Document for Ukraine includes one horizontal area related to overall policy-making for regulatory approximation and three vertical sector areas linked to the implementation of the future DCFTA (sanitary and phytosanitary regulation and state aid control), as well as to the implementation of the Agreement on Readmission between Ukraine and the EU and the ongoing Visa Dialogue (migration) (COM 2011e AAP Ukraine: 2). Based on these priority areas, a number of institutions were identified. Under the Framework Document, each of the participating institutions developed an IRP that entered into force when the Memorandum of Understanding was signed in October 2010. The Ukrainian CIB institutions are presented in table 3.8.

Table 3.8 Principal clusters of CIB Programme in Ukraine Cluster I Cluster II Cluster III Cluster IV Steering and Trade and state aid Migration DCFTA implementation process monitoring for AA and DCFTA

1. Ministry of Foreign 3. Ministry of Economic 6. Ministry of Justice 8. Minister of Affairs Development and Trade 7.The State Migration Agricultural Policy and 2. Department for 4. The Antimonopoly Service Food (State Veterinary European Integration of Committee and Phyto -Sanitary the Secretariat of the 5. Ministry of Finance Service) Cabinet of Ministers

Source: compilation by the author.

The Memorandum of Understanding defined four main areas of reform to be implemented in accordance with the approved plans of the Institutional Reform by the Government of Ukraine: - migration policy The goal of the reform is to strengthen the capacity and improve the efficiency of the institutional structure of governance in the field of migration. - sanitary and phytosanitary measures The goal of the reform is to improve the efficiency and effectiveness of public administration in the field of food safety and bring them up to the European standards. - implementation of the future Association Agreement between Ukraine and the EU, including the creation of a free trade zone.

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The goal of the reform is to improve the effectiveness of the system of government in the field of European integration, the proper implementation of the commitments that Ukraine will take under the Association Agreement. - monitoring and control over the state aid for economic entities. The goal is to create a system of monitoring state aid control in Ukraine in accordance with the standards and criteria of the EU and the international obligations of Ukraine. The CIB institutions developed their SDPs that determined the priorities that contribute to the modernization of the respective institution in Ukraine; measures to be taken; resources to be provided; and funding sources including those outside the CIB (ProAid Ukraine). The National Agency of Ukraine on Civil Service was chosen as the coordinator of the programme through the Resolutions of the Cabinet of Ministers of Ukraine, No. 2078 of November 10, 2010 ‘Some aspects of preparation and implementation of the Comprehensive Institution Building in the framework of the EU’ Eastern Partnership’ (Government of Ukraine 2010).

3.5. CIB: Strengths, Weaknesses, Opportunities and Threats

In this subsection, a SWOT analysis (strengths, weaknesses, opportunities, threats) sums up the main features of the CIB programme. Whereas the strengths and weaknesses columns below reflect the structure of the program and the preferences of the main rational actors (EU, Georgian and Moldavian Governments), the threats and opportunities columns focus more on the external dimension and environment.

Table 3.9 SWOT analyse of the CIB programme STRENGTHS WEAKNESSES

 Special programme designed for EaP  Lack of political will from EaP countries countries  Lack of performance of state institutions  Bolstering institutions that are crucial for  No explicit membership perspective the implementation of the AA/DCFTA  Low salary of civil servants  Increasing administrative capacity of state  Low real interest from both parts, the EU institutions and EaP countries  Special tool for development of public  Lack of conditionality from the EU side institutions to enhance the implementation  Low visibility of the programme of AA/DCFTA  The EU’s limited political ambitions  Preparing civil servants to work on a highly professional level  Transfer of EU institutional ‘best practices’ to the EaP countries

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 Strengthening of the democratic legitimacy of state institutions  Improving the effectiveness of institutions  Provide practical support to partner countries OPPORTUNITIES THREATS

 Possibility to obtain more financial  Interference by Russia assistance if there is more interest and  Political instability in the EaP countries commitment from the EaP countries  Turnover of institutions’ staff  Strong institutions mean an effective  Low interest of the EU to continue the implementation of the AA/DCFTA – more programme if the EaP countries do not benefits reform the state institutions  Lesson learned from the EU countries  High corruption  Experiences and practices shared between  Brain drain EaP state institutions  More reforms implemented – the possibility to have a ‘open door’ for membership Source: designed by the author.

The CIB programme offered a number of strengths that contributed to bolstering key institutions that are responsible for the negotiation and implementation of the EU agreements AA, DCFTA as well as visa facilitation agreements. The programme was designed especially for the EaP countries. In essence, the CIB programme provided support to public administration reform, rule of law and the DCFTA component for individual countries that had decided which institutions needed to be consolidated. Another strength of the CIB programme was capacity building for civil servants from the key CIB institutions so that they were able to implement the AA in practice, and to contribute to the approximation of the national legislation to the EU standards. Another strength was the transfer of ‘best practices’ from the EU member states state institutions to EaP state institutions through resident Twinning advisers, trainings, seminars, visit studies and other measures. Finally, another strength was that within CIB the EU offered more financial assistance for more reforms, as was the case for Georgia (see chapter V). Along with its strengths, CIB programme had also some weaknesses that were related to the process of the preparation of institutions and the implementation of the programme. For instance, the preparation of Institutional Reform Plans, one of the main components of the CIB programme, took a long time in all EaP countries. This could be explained by three reasons. Firstly, a lack of expertise of civil servants in preparing plans for rebuilding institutions. Secondly, a lack of interest of EaP state institutions to reform itself. Thirdly a lack of interest by the EU to stronger push for reforms. As a result, the preparation of Institutional Reform Plans took 2-3 years, leading to the fact that the

133 implementation of the CIB reforms in the key institutions started in most cases around 2013, much later than foreseen. The lack of interest of the institutions from the EaP countries was due to the low salary level in public institutions and the resulting high staff turnover. Another explication for the lack of interest from the EaP countries, especially Georgia, Moldova and Ukraine, (countries that signed AA and DCFTA) was the lack of a membership perspective. On the EU side, it was a limited ambition to strongly push for reforms in the key institutions of the partner countries. As a result, the CIB program had a low visibility as a consequence of lack of interest from both sides the EaP countries and the EU. The CIB programme offered opportunities for EaP countries. Firstly, in addition to the financial assistance under the CIB programme, the EU offered more support for countries which implemented reforms in their institutions and were interested to do more for the continuation of reforming institutions (more for more principle). This was the case for Georgia, which received under ENI more financial assistance for CIB reforms within its DCFTA cluster (see more detail in the chapter V). Secondly, the possibility to offer lessons learnt from EU member states to EaP countries was significant because the EaP partners could apply these lesson in their institutions, thereby avoiding some mistakes, or could adapt these lessons to the reality in their countries. Thus, this opportunity offered the chance to implement reforms that functioned and had success elsewhere. Thirdly, the possibility to share the experience between CIB key institutions of EaP countries was an important opportunity as well. For instance, Moldova offered its experience regarding E- governance reforms (see chapter IV) to Georgian institutions. In turn, Georgia provided its expertise from the third cluster DCFTA (see chapter V) to Moldova and Ukraine. Fourth, even if there was no real membership perspective for EaP countries, the EU could in theory at least offer the beginning of an ‘open door’ for the most reformed countries, if they are persistent and responsible in reforming state institutions,. Within this analysis threats that might affect the efficiency of implementation of the CIB programme were also identified. One of the threats was the political instability in the EaP countries, such as in the case of Moldova, Armenia, Georgia, and Ukraine. The interference of Russia as a regional actor was another threat that could lead to the destabilisation of state institutions, and diminishing zeal in the promotion of democratic reforms and rule of law. As a consequence of these reduced reform efforts, the EU could redirection its financial assistance from CIB to other countries and issues. For instance, in 2014 Armenia joined the Eurasian Economic Union (EEU) a project led by Russia, and the

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EU consequently reduced CIB founds by EUR 23 million. As it mentioned above, one of the weaknesses of the implementation of the CIB program was often a high level of staff turnover in state institutions. The biggest resulting threats was that staff trained under CIB- inspired reforms and projects under Twinning, TAIEX and SIGMA decided to quit their working places and move towards private institutions in search of higher salaries or were hired by international organisations domestically or abroad. This resulted in increasing brain drain. The persistence of high corruption in state institutions was another threat on the path of democratic consolidation of public institutions. Overall, CIB was an important effort of institution–building that focused not only on reforming institutions for the implementation reforms according to EU standards, but also trained civil servants in the necessary expertise for implementing the reforms proposed by the EU. So far, only a limited number of academic studies have analysed the CIB programme. These studies analysed the launch of the CIB programme (Tulmets 2011; Youngs 2010: 61), the significance of the CIB programme as a new instrument developed for the EaP countries, especially for Ukraine, Moldova and Georgia (van der Loo 2016: 85- 96; Ademmer 2016: 81), the significance of the CIB instrument for a better preparation of public institutions according to EU standards, as well as the importance of preparation of civil servants to develop the CIB reforms in the key institutions (Abdullayeva 2016: 41), and gave a general summary of the evaluation of the programme (Zarembo and Litra 2019: 38; ENPI evaluation 2015; ENI evaluation mid-term 2018).

* * * To summarise, CIB founding was available from 2011 but the operational implementation of CIB projects in the EaP countries started only in 2012 and continued until 2017-2018, depending on the operational duration of each Financing Agreement with the EaP countries (European Commission 2014: 77-78). The CIB Programme in every EaP country was focused on concrete preparatory steps and specific aspects of institutional development such as capacity building of institutions, responsibilities linked to legislation, developments in concordance with the EU acquis, modernisation of public services, and customer-friendly services related to citizen vs government. More detail about the effectiveness and efficiency of the programme will be provided in the conclusion of this thesis.

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Chapter IV Comprehensive Institution Building Program in Moldova

This chapter gives an overview on domestic development in Moldova since its independence from the Soviet Union in 1991, in the context of a difficult neighbourhood and the start of its cumbersome ‘European integration’ process. In addition, it presents to what extent Moldova completed or not its transition process, and where it is standing on the indicators democracy, rules of law and economic freedom. The chapter offers a detailed overview of the CIB program in Moldova and the main clusters of this program: public administration reform, rule of law and DCFTA. The main CIB activities are described in detail for each cluster. The chapter thereby gives an overview of the CIB activities and Twinning projects, which are complementary to the CIB programme in Moldova and offers an understanding of the main reforms that have been implemented by CIB institutions in order to be sufficiently prepared for the implementation of the EU agreements. To be noted that for the time being there is not yet a deep evaluation of this programme by the EU, by the Moldovan government or by other stakeholders. In this way, the detailed description can lead to an answer to the question if the CIB programme was efficient in Moldova or not. The last part of the chapter shows the preliminary CIB results. The decision to present these results as preliminary is that there was no clear sequence in reforming CIB institutions, and that the effect of all CIB reforms is not yet visible in the country. Some CIB institutions have started reformation in 2012, other later in 2014, as the AA entered into force. In this regards, many results will emerge only at the end of 2020 year.

4.1 Moldova - country context

The modern history of the EU integration of the Republic of Moldova can be traced back to the Political and Cooperation Agreement (PCA) that was signed between the European Union and Moldova in 1994 and entered into force in 1998. After the collapse of the Soviet Union, the EU signed many cooperation agreements with the newly independent countries. The main goal of these agreements was to create an adequate framework for a political dialogue, to support these countries to build a viable democracy at their home and

136 to assure and help the transition of these countries to a market economy and to build the relations for developing the trade and increasing investments (PCA 1998). In spite of the fact that the Moldavian administration showed already in 1992 interest to follow the pro-European way (as declared the first former president of Moldova Mircea Snegur) negotiation on a PCA did not start immediately (Enciu 2005: 327). The main political issues in Moldova in the early 1990s were:  Transnistrian war (March 1992);  fragile domestic situation;  incertitude of the external policy (while on the one hand President then in office Snegur stated his preference for European integration, on the other hand he signed on 21 December 1991 the protocol of the formation of the Commonwealth of Independent States (CSI));  weak development of the formation of the state institutions;  difficult identification of internal actors with decision-making power (Enciu 2005: 327-328). From early 1993, a majority of Central Eastern Europe countries had already defined their new political orientation and framework of foreign relations. However, Moldova was still in an uncertain situation. In November 1993, President Snegur noted in a letter to the then President of the European Commission Jacques Delors that Moldova was the only Eastern European country with which negotiations for a political relationship had not yet started. In February 1994, finally negotiations for a PCA started between Brussels and Chisinau. The European Commission reported to the EU Council of the EU Ministers that Moldova had already realised many steps regarding the consolidation of the political stability, respecting rule of law and the acceleration of the economic reforms. Therefore, by 1994 Moldova was recognised to have met the conditions to be considered a transition country to a democratic society and a market economy (Enciu 2005: 328). With the entry into force of the PCAs in 1998, as it was mentioned at the beginning of this chapter, a new collaboration framework between Moldova and the EU had been established: the EU pledged to support Moldova’s efforts for strengthening democracy and completing the transition process to market economy. On the other hand, Moldova committed to respecting democratic values, fundamental principles and freedoms of human rights, as the main political aspects covered in the PCA. Nevertheless, the Agreement did

137 not contain the final aim of Moldova’s EU ambition, namely membership. Clearly, the emphasis of the PCA was on cooperation not on integration (Enciu 2005: 329). The entry into force of the PCA gave Moldova access to EU aid through the Technical Assistance for the Commonwealth of Independent States (TACIS) programme. A total of EUR 56.5 million from TACIS were allocated for Moldova from budget years 1995-1999. The following table 4.1 gives an overview about these funds between1995- 1999.

Table 4.1 TACIS Allocation by sectors 1995-1999 (EUR /million) Sectors Action Action Action Total programme programme programme 1995 1996/97 1998/99 Private Sector Development 1.5 4.5 2.8 8.8 Public Administration and Social 2.0 4.2 4.5 10.8 Sectors Agriculture 2.5 3.7 4.1 10.3 Energy 1.5 0.0 0.0 1.5 Transport 0.0 0.0 2.8 2.8 Tempus + Small Project Program 1.0 4.9 4.8 10.7 Other 0.5 0.6 0.5 1.6 Total Action Programme 9.0 18.0 19.5 46.5

Environment – Interstate Facility 2.0 Energy – Interstate Facility 2.5 Transport – Interstate Facility 0.5 Cross Border Cooperation 5.0 Total Facilities 10.0 Grand Total 56.5 Source: Evaluation of TACIS Country Strategy in Moldova. TACIS Report, 2000: 5.

The TACIS programme focused in Moldova on the following priorities:  Supporting institutional and administrative reforms.  Supporting the private sector and economic development.  Mitigating the social shock that were provoked by the transition. More specific issues were also covered: food production, processing and distribution, private sector development and human resources development (Boian 2010). The following TACIS indicative programme for 2000 – 2006 included as priority sectors institutional, legal and administrative reforms, and support for enterprises and assistance for economic development (Popescu and Umanet 2005). It can be summarised that through TACIS the EU offered financial and technical assistance to create an environment for democratic development and establish a legal framework according to the European standards (Boian 2010).

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The TACIS program was functional until the EU budget year 2006. From budget year 2007 onwards, TACIS was substituted by the ENPI as it was explained in the chapter 2.1. In retrospect, the results of the end TACIS look rather limited. The agreement and the funding programme gave only superficial attention to the main political challenges of the new state, such as the Transnistria conflict, the fact that Russian troops were permanently occupying this part of its territory and the possible inclusion of Moldova in the process of the more ambitious Stabilisation and Association process for the countries of the West Balkan. In terms of harmonisation of the Moldovan legislation with that of the EU, the PCA achieved only insignificant progress. This situation gradually improved with the developing of the EU ENP in 2004 and the accession of neighbouring Romania to the EU in 2007 (Chirila 2009: 50-51). In February 2005, Moldova signed its first Action Plan with the EU in the framework of the ENP. The EU-Moldova Action Plan (EUMAP) (2005 – 2007) established new strategic objectives for the cooperation between the EU and Moldova. The main aim was to consolidate the relations between the EU and Moldova and advance the implementation of the reforms in all areas. The EUMAP was a complex programme centred on economic and political reforms. The Action Plan was to be implemented by a government formed by the Communist Party of Moldova (PCRM), which ruled Moldova from 2001-2009, following on a number of nationalist and coalition governments which had been in power in the 1990s. The geopolitical situation of Moldova in the 2000s was influenced by the relations with Russia and the incident around the planned so-called ‘Kozak Memorandum’29. In

29 The Kozak Memorandum foresaw a change in the form of state organisation in Moldova, from aunitary state to a federal one, under the name of Federal Republic of Moldova. The foreseen federal subjects were the main stat of Moldova, the Moldavian Transnistrean Republic and the Territorial Autonomous Gagaus Formation. Under the proposal, the Transnistrean Republic and the Gagaus Formation would have had veto rights on decisions from the central authorities in Chisinau. However the signing of Kozak Memorandum failed after the pressure from the external partners and international organisations (the EU, OSCE, USA). See more: Kozak Memorandum (draft) (2003). Russian Draft Memorandum on the basic principles of the state structure of a united state in Moldova, November 17. Retrieved from http://www.stefanwolff.com/files/Kozak-Memorandum.pdf [accessed on 27 February 2020]; Tabarta, I. (2019). From Bratislava to Bratislava – the regulation process of the Transnistrian conflict is sliding back to years 2002-2003, Bulletin Power, Politics & Policy, No.2 December, IDIS Viitorul. Retrieved from http://www.viitorul.org/files/BULLETIN_Power%2C%20Politics%26Policy_IDIS_nr.2_Eng.pdf [accessed on 27 February 2020]; Popescu, L. (2013). The futility of the negotiations on Transnistria, ‘European Journal of Science and Theology’, Vol.9(2), pp.115-126. Retrieved from http://www.ejst.tuiasi.ro/Files/39/13_Popescu.pdf [accessed on 27 February 2020]; Neukirch, C. (2012). From confidence building to conflict settlement in Moldova, in Institute for Peace Research and Security policy (ed.) ‘OSCE Yearbook’, No.17, pp.137-150. Retrieved from https://ifsh.de/file-

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2003, and as a result, the relations between Moldova and Russia deteriorated. Moldova’s geopolitical situation was also influenced by the important regional events like the Orange Revolution in Ukraine and the Rose Revolution in Georgia (Botan 2013). In its early years, the Moldovan Communist Party government seemed to pursue the process of EU integration of Moldova with some determination. The high point of this process can be considered to be the signing of the EUMAP in 2005. However, according to after 2006 the process of the European integration in Moldova was transformed into a ‘process of imitation’, with superficial take-over of western policies and legislation but without a deep commitment to real political and economic reforms. The European Commission criticized in its ENP annual progress reports on the implementation of the EUMAP had not implemented chapters of the plan especially related to human rights, freedom of media, independence of the judiciary and the fight against corruption (Litra 2011:19). In 2009, after a long electoral contest that resulted in a serious breakdown in the rule of law and repeated elections in July, a new parliamentary majority in the form of ‘Alliance for European Integration’ (AEI) emerged. The AEI formed a new government in September 2009. Once the AEI came to power, this resulted in a very strong formal political commitment towards EU integration. The government programme ‘European integration: Freedom, Democracy, Welfare’ Activity Programme of the Moldavian Government for the years 2011-2014 aimed for a deepening of relations with the EU and stipulated the creation of a high level of welfare for the citizens as well as the implementation of other significant changes in the society which would accelerate the integration of Moldova into the EU (Bucataru 2012). However, again real changes in political and economic power structures proved much harder to achieve in Moldova than ambitious commitments on paper. Based on this pro-Western turn of the country, in January 2010 the EU started to negotiate a new political agreement with Moldova. The AA between the EU and Moldova was signed in 2014 as it was mentioned in chapter 2. The intensification of the sectorial dialogue and cooperation with the EU contributed to an increasing presence of the EU in Moldova. EU support was provided for the following sectors: strengthening of democracy, rule of law, respect of human rights,

CORE/documents/yearbook/english/11/Neukirch-en.pdf [accessed on 27.02.2020]; Popescu, N. (2011). Politica externa a Uniunii Europene si conflictele post sovietice, Chisinau: Cartier, pp.85-87.

140 and promotion of economic reforms. The EU provided support for Moldova through the ENPI. The assistance offered by the EU increased gradually from 2009 and amounted to about 70 mln euro, and by 2013 it was intended to be increased to 100 million euro annually (Bucataru 2012: 2-3). In the 2014 parliamentary elections, the Party of Socialists of Moldova (PSRM), a Russophile faction, emerged as the largest single parliamentary party with 25 seats, while the more moderate Party of Communists of the Republic of Moldova (PCRM) took 21. Among the pro-European parties, the reformist and centre-right Liberal Democratic Party of Moldova (PLDM) won 23 seats, the centre-left Democratic Party of Moldova (PDM) took 19, and the pro-Romanian Liberal Party (PL) secured 13 (ADEPT E-democracy 2014). In the same year, in November 2014, it was revealed that around $1 billion had fraudulently disappeared from the country’s banking system. The country’s leading politicians knew about the situation and according to press reports some of them had been involved in the embezzlement of funds. In the same time ‘the rivalry for control of the state institutions between Vladimir Filat and Vladimir Plahotniuc, the two most powerful businessmen in Moldova and leaders of the main pro-European coalition parties, entered a decisive phase. The conflict ended abruptly on October 15 2015, when V. Filat was arrested on charges of corruption and involvement in the banking scandal’ (BTI 2018). Despite this background of a ‘bank robbery of the century’ and the generally weak state of governance in Moldova, the EU decided in July 2017 to offer EUR 100 million macro-financial assistance (MFA) in grants and loans to Moldova, to support recovery from economic and political turmoil (Council of the EU 2017)30. However, the political crisis continued in Moldova so that, on 14 November 2018, the European Parliament (EP) adopted a resolution in which it expressed concern regarding the democratic process in Moldova as ‘the rule of law – including the independence and impartiality of the judiciary – (is) being undermined by the ruling political leaders

30 ‘Decision on an MFA to Moldova of up to EUR 100 million, of which EUR 60 million in the form of loans and EUR 40 million in the form of grants. Disbursements under this programme are conditional on good progress with a related programme sponsored by the IMF and on the implementation of specific policy conditionally to be agreed between Moldova and the EU in a Memorandum of Understanding’ see more Council of the EU, EP (2017) Decision (EU) 2017/1565 on providing macro financial assistance to Moldova, L242, p.14-21. Retrieved from https://www.europeansources.info/record/proposal-for-a-decision-providing- macro-financial-assistance-to-moldova/ [accessed on 03 April 2018]. and Council of the EU (2017) Republic of Moldova: Council agrees to 100 EUR million financial assistance. Retrieved from https://www.consilium.europa.eu/en/press/press-releases/2017/04/12/moldova-financial-assistance/ [accessed on 03 April 2019].

141 colluding with business interests and unopposed by much of the political class and the judiciary, resulting in the Republic of Moldova being a state captured by oligarchic interests with a concentration of economic and political power in the hands of a small group of people exerting their influence on parliament, the government, political parties, the state administration, the police, the judiciary and the media and leading to highly unsatisfactory implementation of legislation with little benefit for the citizens’ (EP Resolution 2018). In this situation, the European Commission, one day after the EP Resolution, decided to cut of financial assistance to Moldova by EUR 20 million per year for both 2017 and 2018 (EC Press release 2018) and freeze the above mentioned EUR 100 million macro - financial assistance. The justification for the temporary stop of the MFA programme was the non-fulfilment its political conditions, which had specified that ‘a precondition for granting macro-financial assistance is that the beneficiary country respects effective democratic mechanisms, including a multi-party parliamentary system and the rule of law and guarantees respect for human rights’(EP Resolution 2018: lit.g). With the political crisis in Moldova unresolved, and EU financial support severely reduced, the parliamentary elections of February 2019 were expected to be once again conflictual. Indeed, the February 2019 elections did not produce a clear majority. After protracted negotiations, in June 2019 a surprise coalition between pro-Russian Socialist Party led by President Igor Dodon and pro-European bloc ACUM (‘now’) led by Maia Sandu and Andrei Nastase was announced. This was a temporary agreement by (post-) communist and pro-European forces to remove the Democratic Party of V. Plahotniuc, the perceived real leader of Moldova in political and economic terms (The Economist June 15th 2018) from power. As the old forces of the Democratic Party did not want to cede office, for a few days in June 2018, Moldova even lived through the extraordinary situation of having two governments and two heads of states. The crisis ended with the old forces ceding control (14 June 2019), and a new cabinet under Prime-Minister Maia Sandu being sworn in on 8 June 2019. As of mid-2019, a predominantly pro-European government had once again taken office with commitments for reforms and European integration. In reality, as many of its predecessors, it was facing a steep uphill battle, given the mostly unresolved deep structural political and economic problems of the country. However, after five months of the new coalition (Bloc ACUM and Socialist Party), Sandu’s Government received a no-vote confidence vote on November 12th 2019. The

142 tensions between the coalition partners had increased over the Government’s proposed reform of the Prosecutor General’s Office. As a consequence, the Socialist Party initiated a motion of censure against the Government. The motion was supported by Democrat Party and was approved with 63 votes. On 14 November 2019, the Parliament approved a new Government led by Prime- Minister Ion Chicu (former Finance Minister in Filip Government) composed of ministers mainly from the Socialist Party. The Chicu Government was voted in by 62 MPs from the Socialist Party and Democrat Party. As mentioned in chapter 1.4, an evaluation of the transition process in Moldova Georgia is necessary to see how far advanced both countries are in this respect. Indicators on democracy, rule of law and economic freedom will be used in this assessment. The sources are: Freedom in the World Index, Nation in Transit, EUI Democracy Index, Heritage Economic Freedom and BTI Transformation Index. In 2018 Moldova was considered to be ‘partly free’ (Freedom in the World 2018). Moldova was ranked 58 out of 100 countries31 and was evaluated with a rating of 3.5 in the category freedom, 3 on political rights, and 3 on civil liberties.32 Despite the presence of a competitive electoral environment, protection of rights of assembly speech and religion, Moldova continues to show deficiencies in the rule of law that hampers democratic governance through persistent corruption33 in the government sector and political instability (Freedom in the World Report 2018). Figure 4.1 presents Moldova from 1999 until 2018 as a ‘partly free’ country. From 2013 until 2018, the overall score was 3 for all criteria analysed by Freedom House.

31 According to Freedom in the World Index, 0 point means lack of freedom and 100 points signify the political system with the highest degree of freedom. 32 The rates are from 1 to 7. The score 1 means most free, 7 least free. The Freedom in the World Index assesses the conditions of political rights and civil liberties around the world. The index analyses the electoral process, political pluralism and participation, the functioning of the government, freedom of expression and of belief, associational and organizational rights, the rule of law, and personal autonomy and individual rights. 33 See the level of corruption index in Moldova in figure 4.9 from subchapter 4.3. 143

Figure 4.1 Moldova: freedom in the world 1999-2019 Moldova: Freedom in the world 1999 - 2019

Freedom rating Civil liberties Political rights

4 3 3 3 3 3 3 3 2 2 2 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3 4 3 3 3 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3 3 3 3 3 3 3 3.5

1999200120022003200420052006200720082009201020112012201320142015201620172018

Source: designed by the author, based on the Freedom House reports from 1999 to 2019.

Generally, Moldova is maintaining a ‘partially free’ rate regarding freedom on political rights and civil liberties. According to the Nation in Transit report (2018), there is a moderate protection of almost all political rights, as a result of a strong protection of some of them, while neglecting others. Political instability continued during the last years. President Dodon relaunched a political dialogue with Russia and promotes pro-Russian policies to the detriment of European integration. Justice reform stagnates as well. Each new government announces to prioritise judicial reform and to promote the independence of the justice system, while real actions lags behind. As a consequence, the Nation in Transit report claims that despite the fact that the legal framework has improved over the years, the independence of judges leaves much to be desired and that the selective application of legislation is predominant (Nation in Transit 2018). The numerous anticorruption initiatives did not result in reducing this scourge. Ministries and state agencies remain politicised and the corruption index remains on roughly the same level (see figure 4.9, p.187). The Economist Intelligence Unit’s Democracy Index (EUI) uses a different methodology to assess the level of democracy. This index focuses on five categories: electoral process and pluralism, civil liberties, functioning of government, political participation and political culture. These categories are interrelated and form a coherent conceptual whole (EUI 2007:2). Analysing these categories, the EUI classifies each country as a full democracy, flawed democracy, hybrid regime or authoritarian34.

34 The EUI Democracy index began in 2006 and record the global democracy. For the EUI Democracy Index the higher rating means more democratic and lower rating less democratic.

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Figure 4.2 EUI Democracy Index in Moldova 2006-2019 Moldova 6.6 6.5 6.5 6.4 6.33 6.32 6.32 6.32 6.32 6.35 6.2 6 6.01 5.94 5.8 5.85 5.6 5.4 2006 2008 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: designed by the author based on data from EUI Democracy Index35 2006-2019.

From 2006 to 2015 (figure 4.2), Moldova was ranked as a ‘flawed democracy’ and saw a marked decrease in its score from 6.5 in 2006 to 6.33 between 2010 and 2014, with a slight increase in 2015 with a score of 6.35. In 2016, Moldova experienced a fall of the score to 6.01, while in 2017 and 2018 it further fell to 5.94 respectively 5.85. As a consequence, the country was classified in the group of ‘hybrid regimes’ that means that it experienced a worsening in the functioning of government and in civil liberties. Figure 4.3 presents the scores in the area ‘economic freedom’ in Moldova from 1999 to 2018.

Figure 4.3 The economic freedom in Moldova (1999-2020) Moldova 62

60 60 59.1 58.7 58.4 58 58 57.9 58 57.4 57.1 57.4 57.3 57.5 57.4 56 56.1 55.7 55.5 54.9 54.9 54.4 54 53.7 52

Source: designed by the author based on information collected from The Heritage Economic Freedom (1999 - 2020).

35 The Economist Intelligence Unit's Democracy Index, Infographic data, see https://infographics.economist.com/2019/DemocracyIndex/ , [accessed on 14 Dec. 2019].

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According to the last Economic Freedom Index (EFI) compiled by the Heritage Foundation, in 2019 Moldova ranked 97th in the world. The country saw a slight increase in the economic freedom with a score of 59.1 (EFI 2019). In 2018, Moldova was ranked 105th in the world with an economic freedom score of 58.4 and 40th among 44 countries in the Europe region (EFI 2018: 298). The Index rates Moldova as ‘mostly unfree’. Generally, the freedom of economy in Moldova was regarded as ‘mostly unfree’ from 1999 to 2002 with a score between 56.1 and 57.4. In 2003 Moldova was ranked with a score 60 meaning ‘moderately free’. However, from 2004 until present (2019) Moldova is listed in the category of ‘mostly unfree’. The Bertelsmann Index (BTI) is built around the factors of democratic state- building, economic transformation, and governance. For each of these areas, specific indicators are chosen. They are also relevant for CIB institution-building in Moldova. Table 4.2 presents the results with the scores for ‘political transformation’ and ‘economic transformation’ (BTI Index).

Table 4.2 Economic and political transformation in Moldova 2006-2018 2006 2008 2010 2012 2014 2016 2018 Status 5.06 5.93 5.79 6.24 6.33 6.24 5.96 index very limited limited limited limited limited limited limited Democracy 5.40 6.85 6.65 7.05 7.15 6.70 6.20 status highly defective defective defective defective defective defective defective democracy democracy democracy democracy democracy democracy democracy Rule of law 4.8 6.0 5.8 6.3 6.5 6.5 5.5 Stability of 4.5 7.0 7.0 7.5 7.5 7.0 6.5 democratic institutions Market 4.71 5.00 4.93 5.43 5.50 5.79 5.71 economy poorly functional poorly functional functional functional functional status functioning flaws functioning flaws flaws flaws flaws Private 5.5 5.5 5.5 6.5 6.5 7.0 7.0 property Welfare 4.0 4.0 4.0 4.5 4.5 5.5 5.5 regime Governance 3.50 4.46 4.49 5.39 5.50 5.31 5.15 Index weak moderate moderate moderate moderate moderate moderate status Governance 3.83 4.93 4.97 5.95 6.12 5.92 5.75 performance Resource 3.0 4.0 4.0 5.0 5.3 5.3 5.0 efficiency Consensus 4.3 5.4 5.2 6.8 6.8 6.0 6.0 building Source: designed by the author based on data from BTI 2006-2018.

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According to this index, Moldova is a ‘defective democracy’. In 2005, Moldova was ranked with the lowest score of 5.06 even as a ‘highly defective democracy’. From 2008 to 2018 however, this indicator improved. However, in 2016 and 2018, there was a minor setback with a score of 6.70, respectively 6.20. The market transformation in Moldova was seen as ‘poorly functional’ in 2006, and from 2008 to 2018 as ‘functional flaws’, when it scored between 5.00 and 5.71. From 2014 onwards, when Moldova signed the AA including DCFTA its score on market economy status slightly increased from 5.50 in 2014 to 5.79 in 2016, respectively 5.71 in 2018. The governance status is similar to the democracy one. The lowest score was in 2006 with 3.50 and was seen as ‘weak’, with a slight increase for the next years 2008-2012 when the score was from 4.46 to 5.39. However, from 2012 till 2018 the governance performance decreased, thus recording a score of 5.50 in 2018. To summarise, Moldova can be qualified as a flawed democracy, which is still vulnerable to internal and external changes. One of the biggest challenges of the transition process in Moldova is institutional reform. Rapid geopolitical changes, political instability, frequent changes in foreign policy, and the general lack of political will led to a postponed process of democratic reforms. This led to a difficult geopolitical situation for such a small state as Moldova which only recently appeared on Europe’s political map. In this country context, the CIB programme that the European Union and the Moldovan government planned and implemented from around 2011 to 2013 with a dely in implementing of CIB projects until 2017/2018 (with financing from EU budget years 2011-2013) was probably the most structured effort to modernise the Moldovan administration in view of structural reforms and European integration.

4.2 Comprehensive Institution Building in the ENPI Annual Action Programmes 2011-2013

Given the difficult political developments in Moldova since independence, summarized in the previous sub-chapter, as well as the backwardness of the public administration, the new EU approach of CIB, developed in 2009 as part of the preparations for the Eastern Partnership, seemed to fit well for the Moldovan context. The main aim of the CIB was to assist in the preparation and implementation of the EU-Moldova AA and DCFTA which was to planned as an integral part of the AA. The EU

147 and Moldova started negotiations on an AA in January 2010. The AA required two main aspects: Firstly, legal and regulatory approximation with the EU. Secondly, improving institutional capacities, because Moldova’s intention was to exploit the AA to its full potential (CIB Framework Document Moldova 2010: 2). Therefore, the role of the CIB in supporting AA was to strengthen the country’s key institutions. Furthermore, the programme promoted the economic integration with the EU particularly by supporting the negotiation and implementation of DCFTA. The Framework Document for CIB 2011-2013 for the Republic of Moldova was signed after lengthy discussions on 24 November 2010 between the Prime Minister of Moldova, Vladimir Filat, and the Head of the EU Delegation to Moldova, Dirk Schuebel. The Framework Document identified three main reform challenges (clusters) that were to form the priorities of the CIB Programme in Moldova:  Cluster 1: Enabling public administration institutions to implement structural reforms.  Cluster 2: Ensuring respect for the rule of law, human rights and fundamental freedoms.  Cluster 3: Advancing Moldova towards a possible DCFTA. The main provisions of the CIB Framework Document concerning these three reform challenges were as follows.

Cluster 1: Enabling public administration institutions to implement structural reform According to the Framework Document, this CIB priority was necessary for improving the administrative institutional capacity in Moldova. It was considered useful for both the implementation of the EU Action Plan and the EU Agreements. The foreseen approach in this priority area was as follows: firstly, the State Chancellery, as the coordinator of the programme, should create a framework of institutional development plans and monitoring system taking into account the need for coherence and compatibility with the implementation of the AA. Secondly, human resources development was considered a significant step because it was important to prevent ‘drawbacks’ (rolling back of achieved reforms). Thirdly, modernisation of the public services, in special facilitation of e-governance practice designed to improve services delivery to business and the public (CIB Framework Document Moldova 2010: 4-5).

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The State Chancellery was nominated as CIB coordinator. Other two institutions in this cluster were the Ministry of Finance and the Public Procurement Agency. The role of the Ministry of Finance was to prepare and implement the reforms of the public financial management system, including the procedures for the authorisation and control of public expenditure. The Public Procurement Agency was set up to ‘centralise a number of key steps of the procurement process by public administration of procurement contracts’ (CIB Framework Document Moldova 2010).

Cluster 2: Ensuring respect for the rule of law, human rights and fundamental freedoms During the implementation of the Moldova EU Action Plan, progress was registered in some areas such as improved follow-up on the rulings of the European Court of Human Rights. The CIB Framework Document addressed in the cluster 2 many other challenges which had remained open: ensuring adequate justice administration, proper implementation of guarantees for human rights and fundamental freedoms by the law enforcement bodies, neutrality of the public media, promotion of a pluralistic media environment and increased efficiency in tackling corruption (CIB Framework Document Moldova 2010: 5). The following key CIB institutions were identified for this cluster: Ministry of Internal Affairs and the Centre for Combating Economic Crimes and Corruption which in 2012 was transformed into the National Anticorruption Centre and General Prosecutor’s Office.

Cluster 3: Advancing Moldova towards DCFTA In the third CIB priority, some progress had already been achieved under EUMAP, such as on customs, sanitary and phytosanitary standards, financial service and energy. The planned DCFTA gave Moldova a possibility to integrate into the EU internal market without becoming an EU member state. In this view, the DCFTA required strengthening of the mechanism meant to ensure proper and effective implementation of sectorial legislation and standards. The key challenge under this cluster was to transpose the EU acquis in a comprehensive manner into new legislation, and develop and implement secondary legislation in DCFTA relevant areas (CIB Framework document Moldova 2010: 5). To summarise, the CIB Framework Document Moldova specified the main objectives and expected specific outcomes for all three clusters described above. In the

149 view of the Moldovan administration, the main goals of the document (and of CIB as a whole) was ‘strengthened institutional and management capacity of each concerned institution through improved policy leadership and coordination; capacity to act professionally, with adequately trained personnel, adequate information systems and related information databases, and equipment; improved policy coordination, development, monitoring and assessment and strategic planning systems; strengthened civil servants' skills in adjusting public policies and bringing the legislation in line with European integration standards; corps of professional and motivated civil servants operating for the benefit of the society and contribute to reducing institutional corruption risks; quality of service rendered to society; improved quality of policy analysis etc’ (CIB State Chancellery Seminar 2010).

Funding for CIB activities The implementation of the CIB in Moldova was financed from the ENPI Annual Action Programmes (AAP) 2011-2013. A total of EUR 40.565 million was allocated for dedicated CIB activities through the three AAPs 2011-2013. As the preparation and life- span of EU-funded technical assistance projects typically takes several years (1-2 years for preparation and 3-4 years for implementation), the implementation of individual CIB activities and reforms in Moldova ended only around 2017-2018. The annual budget split for CIB in Moldova was as follows:

Table 4.3 CIB financial allocation in Moldova 2011-2013 CIB financial allocations for NAAP 2011 – EUR 8 million Moldova in 2011- NAAP 2012 – EUR 17 million 2013 NAAP 2013 – EUR 15.565 million36

Total CIB EUR 40.565 million Moldova

Source: designed by the author based on COM 2011d AAP, COM 2012 AAP, COM AAP 2013.

The following tables show in more detail which activities were included in the mentioned CIB programmes in the financial years, 2011, 2012 and 2013:

36 Originally, an amount of EUR 16.16 million had been foreseen for CIB for AAP 2013, but this was then reduced to EUR 15.565 million (COM 2011d AAP).

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Table 4.4 CIB in Moldova in 2011 Components Project/activities CIB funds Component 1- Preparatory work for the 1.1. Support to the CIB 2,000,000 development of CIB Strategic Coordinator Development Programmes (MEUR 2) NAAP 2011 (FA 1.2 Support to the signed on 6 March development of SDP 2012) Component 2 – Support to the 2.1. TA to DCFTA 2.000,000 implementation of selected components of (Ministry of Economy, SDP (MEUR 6) Ministry of Agriculture, Food Safety Agency etc) 2.2. Project for Min 2.000,000 Finance / State Tax Inspectorate 2.3 Visa dialogue Phase II 2.000,000 Implementation for Ministry of Internal Affairs - Forensic equipment supply contract

Total CIB 2011 8,000,000

Source: designed by the author based on COM 2011d AAP.

Table 4.5 CIB in Moldova in 2012 Components Project/activities CIB funds

NAAP 2012 FA to be Component 1 Reforming the Support to the implementation 4,000,000 signed in August 2012 Public Administration of the PAR and October 2012

Component 2 Rule of Law Support to the Min of Internal 5,000,000 Affairs and border Police possible further support to the CCECC (NAC) Component 3 DCFTA Supply and Infrastructure 8,000,000 Total CIB 2012 17,000,000 Source: designed by the author based on COM 2012 AAP.

Table 4.6 CIB in Moldova in 2013 Component Project / Activity CIB funds Component 1 Comprehensive 3.1. Twinning projects (grants) 6.175.000 NAAP – 2013 FA Institution Building Programme signed in August 2013 3.2. Support to institutions 4.840.000 under CIB (service contact)

3.3 Provision of ancillary needs 1.550.000 linked with other forms of technical assistance Total CIB 2013 15.565

Source: designed by the author based on COM 2013 AAP.

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It should be noted that not all EU-funded projects addressing institutional capacity in Moldova in 2011-2013 were formally carried out under the CIB-label. For instance, a massive EUR 10 million rule of law budget support programme for Moldova from the ENPI budget 2011 was not formally part of CIB. The AAP Document designs the main objective as ‘accelerating of a sustainable justice sector reform in Moldova’ and to ‘increase the efficiency of the judiciary and other agencies in the justice chain’ (COM 2011d AAP: 32). The actions from this project were coordinated with the implementation of the CIB, particularly of the Public Prosecutor’s reform. However, it remains unclear if and how the budget support related to the CIB projects were coordinated in detail. Also additional to the CIB programme, a team of around 25 high-level experts from EU member states was recruited by the EU in 2010 for a period of 1-2 years, and later prolonged. Together with civil servants the high-level experts assisted on development of projects, implementation of reforms and, most importantly, offered their expertise regarding general policy questions in their respective fields and the approximation of national legislation to the EU standards (Interview, Rodrigez, EU Delegation in RM).

CIB core institutions The Framework Document signed in 2010, had identified 13 core institutions in Moldova that were to be supported by the CIB. These institutions were selected on the basis on their strategic importance for European integration and the implementation of the AA and DCFTA:

Table 4.7 CIB institutions and non-CIB institutions in Moldova

CIB Institutions CIB Clusters 1 State Chancellery Cluster I Public 2 Ministry of Finance Administration 3 Public Procurement Agency Reform 4 Ministry of Internal Affairs Cluster II Rule of 5 Centre for Combating Economic Crimes and Corruption (now CNA) Law 6 General Prosecutor’s Office 7 Ministry of Economy Cluster III DCFTA 8 Ministry of Agriculture and Food Industry 9 Ministry of Health 10 National Agency for Protection of Competition 11 State Agency for Intellectual Property 12 Sanitary Veterinary and Animal Origin Food Safety Agency 13 General Inspectorate for Phito-sanitary Surveillance and Seed Control

Non-CIB Institutions 1 Ministry of Foreign Affairs and European Integration 2 Ministry of Justice

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3 Ministry of Regional Development and Constructions 4 Ministry of Defence 5 Ministry of Transport and Road Infrastructure 6 Ministry of Environment 7 Ministry of Education 8 Ministry of Culture 9 Ministry of Labour Social Protection and Family 10 Ministry of Information Technology and Communications 11 Ministry of Youth and Sport 12 National Statistics Bureau 13 Cadastre and Land Relations Agency 14 Bureau of interethnic relations 15 Border Guards Service 16 Agency Moldsilva 17 Material Reserves Agency 18 Tourism Agency Source: designed by the author based on data from Support to the State Chancellery 2012.

Additionally to these 13 CIB institutions, the Moldovan government foresaw another 18 institutions (see table 4.7) to carry out similar reforms, without formally being of CIB. The idea was to leave no major institution unprepared for the European integration process (Interview, Ciurea, State Chancellery). Funding for reforms in these 18 institutions did not come from the CIB budget presented above. However, they could apply for other EU-funding such as Twinning, TAIEX, SIGMA, etc.

4.2.1. Cluster 1 Public administration reform

For cluster 1, public administration reform, the CIB Framework Document did not describe exact action points, but emphasized in rather general terms the need to ‘modernize’ public administration, reform public financial management, develop human resources and improve e-governance (CIB Framework Document Moldova 2010: 4).

CIB reforms in the State Chancellery Moldovan and international stakeholders agreed that the reform of public administration is an important requirement for the implementation of the AA including DCFTA in Moldova, and for the EU integration of the country in general terms. However, Moldova has longstanding serious deficiencies regarding efficiency of the public administration such as good vision, transparency, bureaucracy, high degree of politicization, and insufficient administrative capacity. Many of these issues are perceived to be due to the historical (Soviet and pre-Soviet) heritage, lack of political will or lack of professionals with broad visions that are able to make drastic changes in the system. In this

153 context, the public administration in Moldova has consistently remained inefficient and in need of concrete and drastic reforms. Public administration reform plans had existed in Moldova long before CIB. For example, in 2005 a Strategy of Public Administration Reform (SPAR) had been adopted. The main goal of the SPAR was to identify the measures for ensuring modernisation of public administration, reorganising of ministries and administrative institutions the optimisation of the policy making process and the improvement of management of human resources (Government Decision no. 1402, 2005). The reforming process focused on the following principles: transparency, responsibility and efficiency (Popovici 2018: 32). An Action Plan for the implementation of the SPAR had been adopted. The process of implementation of the Strategy was intended for two years from 2006 till 2008. Nevertheless, despite many ambitious and enthusiasm from the Moldavian Government, the reforming process of public administration was difficult and slow. As a result, at the end of 2008 it was necessary to continue administrations reforms. However, no new SPAR Action Plan was adopted nor improved the old one. In 2008, the Moldavian Government approved a methodology for the elaboration of Action Plan on the implementation of the National Development Strategy (NDS) for the period 2008-2011 (Government Decision no 191, 2008) for administration reform by individual ministries and agencies in 2008-2011. Thereby, the reform of public administration was continued in 2009 and had an important place in the new Government Programme ‘European integration: Freedom, Democracy and Welfare’ 2011-2014 adopted by the Alliance for European Integration (COM 2011d Action Fiche: 19). With the elaboration of the CIB Programme, the public administration reform was given a new stimulus. The State Chancellery as the coordinator of the CIB Programme re- evaluated how the public institutions developed and implement their Action Plans under the NDS 2008-2011. After a full evaluation and a consultation with the EU Delegation in Moldova, the State Chancellery proposed a new methodology for the development of the Strategic Development Programmes (SDP) and the SDP methodology was approved by the Moldavian Government in March 2011 (Government Decision no 176, 2011)37. During the interviews conducted by author, Lucretia Ciurea and Ione Gumene (State Chancellery) emphasised the role of SDPs developed by CIB and non-CIB institutions. Under the CIB-approach, SDPs were considered necessary for the

37 In the CIB Guideline it is mentioned that the CIB institutions should develop Institutional Reform Plans. However, for Moldova the European Commission accept the name of Strategic Development Plans.

154 identification of the weak points of administrative capacity of the respective institutions. SDPs should have created a set of interventions to improve these administrative capacities. Key CIB institutions prepared their SDPs. In order to avoid discrepancies between CIB- and non-CIB institutions, the State Chancellery asked the latter to prepare SDPs as well (see table 4.6 for Moldova’s CIB and non CIB-institutions). In the SDPs, the structure of the internal management and administration process was changed in order to improve the efficiency of the implementation of reforms in practice and to increase the quality of public services. Due to the fact that public administration reform had already started in 2005, and that Action Plans had been developed in 2008-2011, it was necessary that the SDPs developed in 2012-2014 were based both on previous reform plans as well as the new EU criteria in the CIB programme. As CIB coordinator in Moldova, the State Chancellery received EU support and expertise in the preparation and implementation of the CIB programme. The Chancellery assisted CIB public institutions in preparation and implementation of multi annual reforms in practice. The CIB Framework document in Moldova specified some of the reforms to be taken under Cluster 1. Box 4.1 below presents the entire expected reforms to be implemented by CIB institutions within this cluster.

Box 4.1 Expected results under CIB Cluster 1 - A civil service able to steer European integration in its areas of responsibility and understand the institutional connection to this process, and bring primary and secondary legislation in line with the EU Acquis. - A civil service with substantially improved performance and productivity. This effort should target, in particular, public financial management in line with international standards and best practice and an efficient system of public procurement, through increased transparency, economies of scale, automated control and the equality of tenders with regard to information on public procurement procedures. - Accordingly the introduction of new tools of e-government and e-transformation through the Moldovan administration. Source: FD Moldova 2010: 5.

The State Chancellery organised training sessions, seminars and meetings with all beneficiary-ministries and agencies and provided a better understanding of CIB. It consolidated a professional team that worked on increasing progress in specific areas and adapting institutional activities to European standards (Interview, Ciurea, State Chancellery). Within the CIB programme, the State Chancellery developed in 2011 a project ‘Technical assistance to support the Government of Moldova in building the capacity for

155 application of Twinning, TAIEX and SIGMA instruments and to prove support in preparation and implementation of the CIB’ with a duration of 24 months. The role of this project was to:  to build the capacity of State Chancellery for technical leadership in the identification preparation and implementation of activities funded by external assistance;  to support the Programme Administration Office at the State Chancellery as the central institution for promoting, planning and implementation of the use of EU instruments, specifically Twinning, TAIEX and SIGMA;  to build capacity and assist the State Chancellery in the preparation and implementation of the CIB Programme (COM 2011d AAP). Under this project, the CIB institutions were trained by the State Chancellery how to develop Twinning, TAIEX and SIGMA projects. One of the most important aspects was that the actions and activities intended to be developed must be in concordance with the AA and DCFTA stipulations. For some CIB institutions such as Ministry of Economy, Ministry of Health and Public Procurement Agency the development of the Twinning projects was a new one. In consequence, the State Chancellery suggested for these institutions to start with a ‘light’ Twinning project. As the necessary expertise and practice were obtained over time, these institutions could develop more ‘complex’ Twinning project.

E-governance reform in Moldova A good case study on CIB Cluster 1 reforms implemented in Moldova is e- governance. Within the State Chancellery, the State Electronic Government Centre (EGC) is charged with offering e-services. The EGC is the main institution responsible for the implementation of the ‘Moldova 2020 Digital Strategy’ that started in 201238 which the main aim is to create necessary conditions for increasing the use of Information and

38 The (then) (2012) Ministry of Information Technology and Communications launched the drafting process of the Digital Moldova 2020 Strategy- a policy document that shall provide the necessary conditions to build a modern Information Society in the Republic of Moldova. This framework document defines the interaction between private and public partners aimed to ensure economic growth based on knowledge and governance efficiency by increasing the use of ICT tools, to exploit the benefits offered by Information Society for citizens’ convenience and well-being. See more: Ministry of Economy and Infrastructure, Digital Moldova 2020, retrieved from https://www.i-policy.org/2013/10/digital-moldova-2020.html [accessed on 15 January 2016]; and East Horizon, Fostering dialogue and cooperation between the EU and EECA in the HORIZON 2020. D3.3 Report and Development Roadmaps in EEAS countries, retrieved from https://eeca- ict.eu/images/uploads/pdf/D3.3_Existing_R-D_Roadmaps_in_EECA_countries.pdf [accessed on 27 January 2018].

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Communications Technology (ICT) by public institutions, the private sector and citizens. In EaP countries in general, and in Moldova in special, modern concepts of public administration reforms include the building up and improvement of e-governance for the benefit of citizens, the private sector and other relevant actors (CIB Framework Document Moldova 2010). It is important here to distinguish two similar but not identical concepts: E- Government and E-Governance. E-Government is an institutional approach dealing with the development of online services for citizens (Sheridan and Riley 2006: 1). In turn, E- Governance is a broader term and refers to a procedural approach which defines and assesses the impacts that technologies are having on the practice and administration of governments and the relationships between public servants and the wider society (Sheridan and Riley 2006: 1-2). Under the concept of E-Governance the public administration tries to use information and communication technologies in the public sector more efficiently, and to improve the ability of the government to carry out its responsibilities. There are many more definitions and explications of the term E-Government among researchers and scholars. E-Government generally refers to the ability of the government to interact electronically with citizens, business and other governmental entities (Sharma 2004: 198). Most researchers define electronic government as government use of information and communication technologies to offer to citizens and business the opportunity to interact and conduct business with government by using different electronic media such as telephone touch pad, fax, smart cards, self-service kiosks, e-mail, Internet and EDI (Almarabeh and AbuAli 2010). Another definition of E-government, presented by the World Bank, states that ‘E-Government refers to the use by government agencies of information technologies (such as Wide Area Networks, the Internet, and mobile computing) that have the ability to transform relations with citizens, businesses, and other arms of government’ (World Bank 2002: 2). Fundamentally, E-Government and E-Governance offer a good chance for improving the quality of public services, enhancing citizen's confidence in public institutions and a country’s competitiveness. Shailendra and Sushil characterise these channels of communication as: - Government to Citizens (G2C): deals with those activities in which the government provides on-line access to information and services to citizens. G2C applications enable citizens to ask questions of government agencies and receive answers; file income taxes, pay taxes etc.

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- Government to Business (G2B): deals with businesses such as suppliers using the Internet and other information and communication technologies. G2B includes two- way interactions: government-to-business and business-to-government. - Government to Government (G2G): deals with those interactions that take place between different government organisations. Many of these activities are aimed at improving the efficiency and effectiveness of overall government operations (Shailendra Suchil 2007: 4-5). As the Moldova State Electronic Government Centre was designed to modernise the public service in Moldova, through the development of the e-governance, the ECG offers all three approaches mentioned above, namely G2C, G2B and G2G. The Centre uses modern technologies which help the government and public institutions to offer fast solutions for citizens, meaning quality public services in real time, accessible from anywhere. Using e-services reduces considerably the risk of corruption, as it limits and formalises the direct contact with civil servants, thereby limiting the possibility for requesting bribes. It offers the possibility of keeping track of interactions. It also saves time for both the public administration and citizens. In the following, some of the e-services mostly used by the citizens and which was part of CIB e-governance reforms will be briefly presented. E-Criminal Record is one of the most requested public services in Moldova, with around 500 to 1500 requests per day. To simplify the procedure for obtaining this public service, the Ministry of Internal Affairs, in partnership with EGC, launched the e-Record public service. Open Data Portal is an innovative initiative for governments, civil society and the ICT communities worldwide. This portal includes free access to public government data in a standard online format. The aim of this e-service is to increase the transparency, productivity and responsibility of the public institutions. There are 640 services on this platform, of which 160 are e-services with open data access.39 A further innovative application can be accessed that allows tracking how the public budget is spent. The BOOST40 data tool makes it possible to analyse the allocation

39 See more details about the public services and e-service on Government of Moldova, Public Services Portal https://servicii.gov.md/default.aspx [accessed on 06 March 2020] and Government of Moldova, E- Governance Agency http://www.egov.md/en [accessed on 06 March 2020]. 40 BOOST is not an acronym. It is the name of a new data tool developed by the World Bank to help enhance public sector performance. BOOSTs are being constructed in more than 17 countries around the world. See more: The World Bank (2011) A new data tool to BOOST public spending efficiency, Knowledge brief,

158 and use of public expenditure. It permits free access to see information which takes into consideration the financial situation of the public sector. Moldova was the first country in the EaP region which made state expenditure public under the BOOST World Bank programme41. This service was developed by ECG in cooperation with the Ministry of Finance. However, according to data portal the updates information made by the Ministry of Finance is until 2015. This possibly can be explained that after the major bank fraud scandal in Moldova (see sub-chapter 4.1 p.141), data regarding financial situation was not published on the BOOST site and as a result of banking fraud the transparency on the financial expenditure decreased. Two other services created for the citizens are MPay and Mobile Signature. MPay is an informational tool by which various services can be paid online. According to the Decision regarding electronic documents and digital signature (Parliament Law No.164 2004) electronic documents are equivalent to documents signed by hand. With ‘Mobile Signature’ citizens can sign papers, reports, declarations to institutions, online requests, etc., by using their mobile phone or through Internet. Also, they can access public and private e-services in an easy and convenient way. Citizens will no longer depend on the tight schedule of institutions as they will be able to access e-services from anywhere and at any time. According to last data from December 2018 there were 60 561 active users42. Government to Business offers many services such as Electronic Fiscal Record that facilitates tax-payment. Using this e-service, the fiscal record is automatically checked, which reduces the possibility of making errors while introducing data. The tax-payer no longer needs to go to the Fiscal State Agency to deposit fiscal reports. It is no longer necessary to print forms, resulting in less resources spent on printing fiscal reports. As with many electronic services, a positive environmental side-effect is less paper. The e-Licensing service provides specialized functions to optimize submission and review of license applications to the Licensing Chamber. Licenses can be requested electronically. The State Register of Public Procurement launched e-Procurement, thus enhancing competitiveness and trust in the procurement process and simplifying interaction with the contracting authorities. retrieved from http://siteresources.worldbank.org/INTECA/Resources/KB43onBOOST.pdf [accessed on 10 July 2019]. 41 The World Bank, Open Budget Portal: Moldova retrieved from http://boost.worldbank.org/country/moldova [accessed on 10 July 2019]. 42 For more detail regarding the types of the e-services used by the users, monthly transactions, distribution of transactions, distribution of payment methods see the quarter infographics on Government of Moldova, E- Governance Agency. Resources retrieved from http://egov.md/en/resources/infographics [accessed on 10 July 2019]. 159

Another two e-services were elaborated by the EGC in partnership with the National Health Insurance Company (CNAM) and the National Social Insurance House (CNAS): e-CNAM and e-CNAS43. With the help of e-CNAM service, economic agents can submit electronic forms to the state health insurance company at any time and in any place where Internet access is available. Via e-CNAS system44, employers in Moldova can present in electronic format the so-called Rev 5 declarations for their employees, simultaneously with the declarations on calculation and use of mandatory state social insurance contributions (4-BASS form). In 2014, the service of Fast Electronic Statement (e-Invoice) was launched. This e- service represents a rapid solution for economic agents from Moldova in terms of bills and invoices’ development and electronic circulation. This e-service has the main goal to increase the quality of public service, to diminish corruption, to increase transparency in the public procurement and to accelerate the process of e-transforming of Moldova. For the moment all ministries and the central public administration use this e-service. Even if, at the time of launching of this service, the deadline for the implementation of e-Invoice for all institutions in the entire country was December 2019, later on the Parliament extended this deadline until July 2020.45 Reforms on e-Public Procurement will be discussed below on CIB reforms in the Public Procurement Agency (p.165). The last group of e-Governance used in Moldova is Government to Government (G2G). The Moldova National Open Government Data Initiative was launched in April 2011, as part of the Global Open Data Initiative. Moldova was the 17th country joining to this initiative. One year later, the first Moldova Open Government Action Plan (OGAP) was approved and launched (Government Decision No.195 2012). The State Chancellery and the E-Government Centre were responsible for the implementation of the action plan. The OGAP has three main objectives:  strengthening public integrity by ensuring a participative decision-making process and citizen participation and increasing transparency in governance;

43 Government of Moldova, E-Governance Agency (2013). Electronic reporting at CNAM (National Health Insurance Company) and CNAS (territorial Social Insurance House) becomes functional. Retrieved from http://www.egov.md/en/communication/news/electronic-reporting-cnam-and-cnas-becomes-functional [accessed on 10 July 2019]. 44 In 2015 the e-CNAS service was connected to MSign. 45 Parliament of RM (2019) draft legislative acts, Proiectul legii cu privire la modificarea Codului Fiscal no.1163/1997 (art.117) retrieved from http://parlament.md/ProcesulLegislativ/Proiectedeactelegislative/tabid/61/LegislativId/4622/language/ro- RO/Default.aspx [accessed on 10 July 2019]. 160

 efficient management of public resources through the increase of public spending transparency;  improving the quality of public services delivery (OGAP 2012-2013). Through this platform citizens can be consulted on various draft laws. On the platform, citizens can follow the public consultations agenda. Thus, they can check the public consultation that are due, and follow it. In January 2013, the two initiatives M-Cloud and SIGEDIA (Government Decision no.170 2011) for the increasing of the efficiency civil servants’ work were launched. By using M-Cloud technology, many institutions use common applications stored in a single data centre. In order to access them, a public official only has to connect the internet. SIGEDIA is part of the Action Plan for the initiatives implementation “paperless government” (Government Decision no.975, 2011). The purpose of this initiative is to implement an efficient documents circulation system throughout the Government that simplifies and accelerates decision making processes.46 Based on this impressive number of new initiatives and other institutional reforms, the Open Government Partnership’s Moldova Progress Report 2012-2013 (IRP Moldova 2014) mentioned that the main progresses which has been achieved in public administration is increasing transparency in decision making, opening data portal and increasing level of information about the state budget and public expenditure. Nevertheless, the report states that the Moldovan Government should still work ‘on improving the public procurement mechanism, on reducing corruption and on developing the system for online sending public officials’ income statements (IRP Moldova 2014). A second Open Government Action Plan (OGAP) covered the years 2014-2015. The main focus was on the Strategic Program for Technological Modernization of Government for 2014-2016: E-Transformation (Government Decision no.1906, 2013). The main objectives were:  promote the principles of open data by default;  ensure transparency in the work of the public administration authorities and access to public information;  ensure transparency of the governance at the local level.

46 The pilot project, coordinated by the State Chancellery, was first implemented in the following institutions: Ministry of Agriculture and Food Industry, Ministry of Economy, Ministry of Finance, Ministry of Justice and Ministry of Labour and Social and Family Protection.

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The third OGAP 2016-2018 (Government Decision no.1432, 2016) focused on the following objectives: Insuring Efficient Management of Public Funds by Increasing the Transparency of Public Expenditures; Strengthening Public Integrity by Insuring a Participatory Decision Making Process, and Increasing Transparency in the Governance Process; and Improving the Quality of Public Services. The fourth OGAP 2019-2020 (Government Decision no.1172, 2018) has the following objectives:  ensuring access to information and promoting the use of open data by citizens;  increase budgetary transparency and of public procurement; strengthen the platforms and mechanisms of collaboration with civil society;  involvement of diaspora in decision-making process. However, the last assessment report provided by the EaP Civil Society Forum (2018) points out the following problems:  while Moldova had some progress in improving database and information portal, the authorities do not update these portals so that the funds provided by external donors are not used entirely;  the enforcing of Law on Public Procurement led to increasing the transparency of public procurement, however, ‘a number of state enterprises and joint stock companies with state shareholding do not fall within the scope of the law and this may be a risk of use of public funds’;  there is lack of transparency in the budget process for both at the level of executive authorities and legislative authorities of central and local level. The draft budget is not published for public debates for both central and local level as it is stipulated in legislation;  the Central Public Administration do not provide on their web page information about the anticorruption activities, planed budgets, plans and results of public procurement process;  there is no law requiring transparency by autonomous central public authorities such as the National Bank of Moldova, Court of Accounts, National Regulatory Agency in the Energy Sector, National Commission for Financial Markets, Competition Council (EaP Civil Society Forum; OGAP Report 2018: 4).

CIB reforms in the Ministry of Finance

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The second institution in CIB Cluster 1, Public Administration Reform, was the Ministry of Finance. Talking with the civil servants form the Ministry of Finance that were involved in the implementation of CIB reforms within the institution, they mentioned that as with other Moldovan institutions, before the start of CIB already a number of similar reform projects had been carried out. In the case of the Ministry of Finance, a 2006 World Bank project on Public Financial Management is especially noteworthy, as its main aim was to ‘achieve effective and transparent management of public finance – as an enabler of poverty reducing programs and economic growth’(Interview, Ministry of Finance). In the framework of CIB, the Ministry of Finance and the EU Delegation in Moldova launched a strategically important Twinning project called ‘Strengthening Public Financial Management in the Republic of Moldova’. This Twinning project consisted of a cooperation by Moldovan, Swedish and Dutch officials. It was seen as a continuity of the mentioned previous World Bank project. While the latter has set the foundations for public finance management reforms in Moldova, the new Twinning project was more specific, aligning itself with the requirements of the CIB Framework Document (Interview, Ministry of Finance). The Twinning project intended to adopt ‘the EU’s concept of Public Internal Financial Control finance management’ (Twinning Activity Report 2013: 2). The project covered two areas of the PAR (public administration reform) under CIB: - the development and implementation of a process of strategic planning across central public authorities. In this context, the Institutional Development Plan developed by the Ministry of Finance at the beginning of the CIB programme highlighted the importance of the necessity ‘to develop a clear strategic and operational objectives’; - the development of a new Law on Civil Service which promotes the introduction of modern human resource management practices in all public authorities. So that the Ministry of Finance emphasised in their SDP the importance ‘of the competent staff to undertake control activities’ (Twinning Project Fiche MoF 2008:6). The Twinning project had four components: - Component 1 Enhanced capacity of the Central Harmonisation Unit to oversee the implementation of the PIFC in Moldova. - Component 2 Updated the legislative and normative framework. - Component 3 Strengthened the financial and managerial control.

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- Component 4 Strengthened the Internal Audit Capacity.47 These components intended to improve audit functions and to establish a framework to improve communication between the Court of Accounts, State Chancellery, Ministry of Economy, and other relevant stakeholders. A Strategy for Development of Public Financial Control 2014-2017 was developed, as well as a Strategy for Communication within Internal Public Financial Control ‘Programme for development’ (Interview, Ministry of Finance). The updating of the legislative and normative framework to EU standards was important especially to create specific norms such as IT internal audit and performance audit. Concerning the next two components, they completed each other: the first one, the development of the financial and managerial control with the emphasis on the manager’s instructions and the second one, the instruction of the civil servants and the formation of the pilot missions. These components are significant because, apart from the managers’ instructions and visit studies, the training of trainers activity is substantial for the reason that Twinning experts only staid for a short time in Moldova. After the end of the project it is important that the experience and knowledge obtained be transferred to other, including newly recruited civil servants (Interview, Ministry of Finance). In 2013, the Moldavian Government approved a ‘Strategy for development of Public Finance Management 2013-2020’ which underlined the ‘Government commitment to improve in a sustainable way accountability and performance of public financial system’ (COM 2014a AAP: 11). The public finance management was seen as an important tool for delivery fiscal policies, and the Government should be able to promote the high standards of responsibilities and transparency in the public sector that are significant for the delivering of public services (Government Decision No.573, 2013). The Twinning project prepared the ground for a new project ‘Support to Public Finance Policy Reform in Moldova’ for 2014-2017, in which the main objective was to assist the Ministry of Finance (Government), the Committee for Economy, Budget and Finance (Parliament) and the Supreme Audit Institutions (Court of Accounts) ‘in the process of enhancing good governance, effective fiscal policy, transparent and accountable public finance policy and strengthened public financial system’ (COM 2014a AAP: 15). The main activities that have taken under this project were to:

47 More details about the specific activities for each component see: Twinning project fiche ENPO AP 2008 ‘Strengthening Public Financial Management in the Republic of Moldova’, Twinning number MD10/ENP- PCA/FI/07.

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- maintain the dialogue with the Government with the main focus on transparency and accountability in public financial policy and management; - monitor regularly the budget support eligibility criteria of macro-economic and PFM developments, budget transparency, as well as progress in implementation of the public policy; - analyse and monitor the results of the reforms objectives through independent reviews; - provide complimentary support to help the Government in its efforts to implement public finance policy and PFM reforms (COM 2014a AAP: 17-18). The main issues identified in the development and implementation of this project was the lack of the experience in the implementation in practice of the legal framework of public finance management. Whereas for each Twinning project, for instance, there is a Residential Twinning Adviser (RTA) from an EU Member State which offers his or her expertise and know-how in the preparation of the projects, planning the activities, a main issue that persists is the implementation in practice after the finishing of the project.

CIB reforms in the Public Procurement Agency The third and last CIB institution under the Cluster 1 (Public Administration Reform) was the Public Procurement Agency (PPA). This institution matters for several reasons. Firstly, well-managed public procurement saves costs and therefore reduces pressure on the public budget. Secondly, it strengthens the private sector’s trust in state capacities and thereby stimulates economic development and contributes to growth and jobs. Thirdly, it increases transparency and maintains the citizens’ trust in government (COM 2015d; World Bank 2018). However, traditionally the national system of public procurement in Moldova is characterized by low level of competition between the bidders, lack of transparency and problem with harmonisation with international and EU standards (IDIS Viitorul 2016: 5). Public procurements play an important role for Moldova’s economy. According to commentators, since 1991 the country’s public procurement has known three significant stages: (i) modernisation of the legal framework, (ii) digitalisation and (iii) approximation to the EU’s public procurement legislation due to the signing of the AA including DCFTA (Emerson and Cenusa 2018: 101). The EU provided assistance to the Public Procurement Agency through the Twinning project ‘Support to the public Procurement System in Moldova’ which started in

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2010 with a duration of 21 months. The main objectives of the project were to develop the conditions for competitive and transparent competitions, to ensure convergence with the EU legislation and with key international principles. The Twinning project derived from EUMAP, which foresaw that particular attention should be given to the ‘development of conditions for open and competitive award of contacts between the parties, in particular through call for tenders’ (Twinning Project Moldova 2010)48. The project consisted of the following components: - strengthening the institutional capacity – internal organisational and functional structure of the PPA; - legislative framework for public procurement approximated according to the EU standards; - promoting good practices in the public procurement sector and disseminating the available information to the public procurement actors - improving the e-procurement system using modern technology (Twinning Project Moldova 2010). According to the CIB Framework Document, the PPA should establish an automated information system on public procurement procedures and implement a national Action Plan on public procurement (CIB Framework document 2010: 6). More specifically, the PPA needed to develop reforms in three directions: - gradual harmonisation of the sector-specific legislation with the EU Acquis; - institutional reforms within public procurement area; - creation of an effective system regarding the appeals in respect of the public procurement agreements (IDIS Viitorul 2016: 7). As in the case of the Ministry of Finance, the Twinning project for the PPA laid the ground for the next steps of the implementation of the CIB programme and later for the AA and DCFTA. On the side of the EU, the legislation on public procurement changed in 2014. The new EU legislative package included three directives that were approved by the European

48 More details about the whole Twinning project see: Twinning project, ‘Support to the Public Procurement System in the Republic of Moldova’, Twinning number MD09/ENP-PCA/FI/05. Retrieved from https://twinning.msz.gov.pl/fiszki-archiwum/support-to-the-public-procurement-system-in-the-republic-of- moldova/ [accessed on 09 April 2019].

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Parliament and Council on 26 February 201449. These new Directives simplify the EU procurement regime, offer more flexibility, establish better access to EU procurement markets for Small Medium Enterprises and ensure the social and environment criteria (Emerson and Cenusa 2018: 109). However, the new EU package led to delays in Moldova, as the country had to harmonise with the new complex EU framework in its own legislation, policies and projects. In 2015, the Moldavian Parliament adopted the Law on Public Procurement no 131, which was ‘one of the prerequisites’ for the acceptation of Moldova (after seven years of negotiations) to the WTO Agreement on Public Procurement. This Agreement established the legal framework for the rights and obligation of the parties related to law, procedures and practices used in public procurement. The framework of the agreement focuses on the non-discriminatory treatment application to all tenders, and ensures transparency at all stages of public procurement (Emerson and Cenusa 2018: 109-108; IDIS Viitorul 2016: 10). Furthermore, the Moldova State Register of Public Procurement launched the automated informational system e-Procurement (see more e-services launched by ECG) with the aim to enhancing competitiveness and trust in the procurement process and simplifying interaction with the contracting authorities50. This platform was the first step for the digitalisation of the public procurement process. The main goal of this platform was to increase transparency, efficiency and credibility in this institution. The e-Procurement platform provides announcements of intended procurement activities, the information regarding bidding documents and electronic bid template for economic operator (Emerson and Cenusa 2018: 104). However, the role-out of e- Procurement was hampered by the lack of financial resources for the promoting the using of digital system and lack of insufficient information of economic agents regarding the component of e-procurement (Budianski et all 2014:65; Emerson and Cenusa 2018: 104).

49 Directive 2014/23/EU of the European Parliament and of the Council on the award of concession contracts; Directive 2014/24/EU of the European Parliament and of the Council on public procurement and repealing Directive 2004/18/EC; Directive 2014/25/EU of the European Parliament and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC. 50 More details regarding these services and other provided by the G2B see: Government of Moldova, E- Governance Agency. Government for business, retrieved from http://egov.md/en/projects/business [accessed on 10 July 2019]. 167

To improve the situation, the Ministry of Finance initiated in 2016 a new electronic procurement system called MTender51. A Memorandum on the piloting of the new platform was signed between the Ministry of Finance, Public Procurement Agency, e- Government Centre, representatives of the Business Associations, Civil Society and economic operators (Ministry of Finance 2017). The pilot version of the new electronic system was also launched. The foreseen role of MTender was to facilitate the entire procurement circle from planning to contracts implementation. Moreover, all information about the procurement operations should be available not only to companies but also to normal citizens (Emerson and Cenusa 2018: 104). In 2016, the Government also approved the Strategy on Development of the Public Procurement system in Moldova for the period 2016-2020. An Action Plan was developed as well for the same period of time (Government Decision no.1332 2016). Yet, problems still persist on public procurement in Moldova. A major one is the lack of specialists in this area, due to low salaries in the public administration. Another issue is the persistent lack of transparency of the public procurement procedures. For instance, contracting authorities do not provide requested information on the public procurement dossier, even the minimum information required in the new Law 131. Some contracting authorities either restrict the civil society access to the procurement working group or create conditions so that civil society representatives cannot participate.

4.2.2. Cluster 2 Rule of law

Reform of the justice sector was a declared government priority in Moldova since at least 2009. Unfortunately, progress in the real world proved difficult due to a combination of factors, including lack of political will, communist institutional heritage, rampant corruption, oligarchic structures and lack of competent professionals. Wide- ranging reforms in the justice system were conceived with the support of many international donors.52 Through CIB, the EU offered support for particular institutions such

51See more: Ministry of Finance, MTender, pilot project developed by the European Bank for Reconstruction and Development, Chisinau. Retrieved from http://mtender.gov.md [accessed on 10 July 2019]. 52Moldova’s Justice Institutions have received different donor contributions that led to the improvement of justice system. For instance: Joint Programme by the EU and Council of Europe on Increased Independence, Transparency, and Efficiency of Judiciary in Moldova with a contribution of EUR 3.3 million. This programme helped the establishment of the National institute of Justice; Joint EU an Council of Europe Democracy Support Programme with an amount of EUR 4 million which contributed to prevent issues attested by the April 2009 events and included certain capacity building segments for judges as well; Threshold Country Programme developed by the Millennium Challenge Corporation with a total budget of

168 as the Public Prosecutor’s Office, Ministry of Internal Affairs and Centre for Combating Economic Crime and Corruption (later renamed National Anticorruption Centre). According to the CIB Framework document, ensuring respect of rule of law, human rights and fundamental rights requires substantial changes and reforms in the responsible institutions. The needed justice sector reforms according to the CIB Framework Document are given in Box 4.2 below.

Box 4.2 The CIB reforms in the Cluster 2 - well-defined functions and powers of the various components of the judicial system, the prosecution and the law enforcement bodies, in line with European standards; - an administration of justice carried out without undue interference from the executive or from interested parties other than the executive, and of public order in full respect of the need to protect human rights and allow the exercise of fundamental freedoms; - a very significant reduction of the level of corruption, which has serious consequence for Moldova’s aspiration to European integration; for this to be achieved, Moldova will need, beyond specialised institutions for fighting corruption within administration, law enforcement and the judiciary, a full political commitment towards a zero-tolerance policy as regards corruption, and at all levels an integrative approach to anti-corruption measures; - a strengthened administrative capacity of the institutions involved in the administration of justice, public order and in particular the fight against corruption, including to implement reform / change; and in particular the commitments resulting from the future AA; - a transparent system of accountability of judicial and law-enforcement bodies to the citizens; - improved inter-agency cooperation; - as means to achieve in-depth reform, revised performance assessment systems and significant re-training of the staff, and improvement of the technical base, of the institutional concerned with the administration of justice and public order. Source: CIB Framework document Moldova 2010: 7.

A Justice Reform Strategy for 2011-2016 was adopted in November 2011 (Parliament RM Law no.231, 2011) and an Action Plan for the implementation of this strategy in February 2012 (Parliament RM Decision no.6, 2012). The main aim of the strategy was to build an accessible, efficient, independent, transparent, professional justice sector, with high public accountability and consistent with European standards to ensure rule of low, and protection of human rights (The Justice Reform Strategy 2011: 1). The Strategy had seven main pillars: justice system, criminal justice, access to justice and enforcement of court decisions, integrity of the justice sector actors, role of justice in economic development, respect for human rights in the justice sector and well-coordinated, well-managed and accountable justice sector. A working group for the coordination and monitoring of the strategy was created (Ministry of Justice 2012). As a result of these endeavours, Moldova has elaborated normative acts, prepared legislation respecting

USD 24.7 million with a duration from 2007 to 2009 including components’ on anti-corruption, improvement of the court facilities and build Electronic Judicial System; Trial Monitoring Project with a budget of EUR 300 000 developed by OSCE in cooperation with ODHIR from 2006 to 2009 which produced valuable statistics on the prevalent procedural realities. See more details: EU AAP 2011.

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European standards, while, reducing the scourge of corruption, and application in practice of the legislation was a less progress. An important aspect in the justice sector reform was the adaptation of the mechanism of the judges’ performances evaluation. The performance of judges is evaluated by an Evaluation College. The respective law was adopted in July 2012, and the evaluation system was operational from 2013 onwards. The aim of this evaluation was to establish the level of knowledge and professional judge’s aptitude and the capacities to apply the theoretical knowledge and necessary aptitude in practice, and to improve professional skills on the individual level and the level of courts of law (Law no.154, 2012, art12 (1)). From the AAP 2011 budget, the EU financed the project ‘Support to the Justice Sector Policy Reform in Moldova’ with the main objective ‘to accelerate a sustainable justice sector reform and to increase efficiency of the judiciary and other agencies in the justice chain’ (COM 2011d AAP: 32) with a duration of 36 months. In 2012, the next AAP implemented by the EU included a continuation of the reforms for the justice system through ‘Support for Justice Sector Reforms’. The second project continued sector-wide efforts with the main objective to ‘build an accessible, efficient, independent, transparent, professional justice sector with high public accountability and consistent with European standards, to ensure the rule of law and protection of human rights’ (COM AAP: 5). Even if the EU and other international actors have offered a significant support for the reform of judicial system in Moldova through different projects, programmes, technical assistances or more for more ‘carrots’, real progress in this sector was unsatisfactory. A main reason for this low progress was the political situation within the coalition government in 2012 when Prime Minister Vladimir Filat was banned by the Constitutional Court from leading the Government. The institutional crisis ended with the formation of a new coalition government consisting of the former partners and headed by former Foreign Minister Iurie Leanca (COM 2013 ENP Progress Report). During 2014, Moldova continued to adopt laws regarding system for promoting and assessing the performance of judges, based on a transparent procedures and quantitative and qualitative criteria in line with the EU standards. Furthermore, the European Judicial Training Network granted the status of observer to the National Institute of Justice of the Republic of Moldova in June 2014 (COM 2014b ENP Progress Report 2014: 6). However, political interferences continued to be present in the judicial institutions.

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The Justice Sector Reform Strategy for the years 2011-2016 was extended until 2017. The reforms were refocused on reforms at the Constitutional Court concerning composition, professional criteria, and procedures for selecting its judges (Blockmans et all. 2018: 14-16). The main aim in this Cluster 2 was to prepare the judicial institutions for the implementation in practice of the AA. For an effective application of the EU agreements, the specified institutions must be democratic, respecting the rule of law and fundamental rights. Reforms in the judicial sector are significant because of the necessity to ensure the impartiality and independence of the judiciary, the independent functioning of the National Anticorruption Centre (NAC) and for establishing zero tolerance of corruption for the legal profession (Emerson and Cenusa 2018:15). However, it seems to deviate from the implementation of reforms as it is stipulated in the Justice Reform Strategy. Both the EU and civil society complained that there is lack of transparency in the NAC’s activities and lack of the public consultation regarding the proposal laws. Regarding human rights area, Moldova is a signatory to the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). As part of ECHR (1950), it must implement its rulings. Moldova has also ratified most other international human rights treaties such as Convention on the Elimination of All Forms of Discrimination against Women in 2017 and the European Convention on Gender Equality in 2017 and in the same year, the Government approved the National Gender Equality Strategy 2017-2021 (COM 2017 Progress Report: 4; COM 2018c Progress Report: 4). However, the lack of trust in justice has consequences on the respect of human rights. As a result, the number of cases especially on prosecution and arrest of political representatives remains high (COM 2018c Progress Report: 4). The 2018 Activity Report of the European Court of Human Rights shows that there were 814 applications against Moldova in that year, 7.4 % more than in 2017 (Gribincea and Goinic 2018: 3). The Centre for Combating Economic Crimes and Corruption (CCECC), another CIB core institution contributes to the building of an efficient state through the fighting against economic crimes and corruption. The longstanding recommendation from the EU side was to build the CCECC into a strong and independent institution. In 2012, Moldova’s Parliament adopted Law no120 on the amendment and completion of some legislative acts. Through this law, the CCECC was renamed National Anticorruption Centre (NAC). The competence of the NAC included the prevention of corruption and the fight against corruption, related crimes, money laundering and terrorist financing. However, the

171 independence of this institution is questioned by civil society and other independent observers. In 2013 the NAC was transferred from the Parliament administration to Government administration at the proposal of the Liberal Democrat Party and the Party of Communists. In 2015, after Prime Minister Filat’s arrest, the NAC was moved again under the Parliament subordination with the support of the Democrat Party, Socialist Party and Communist Party. The law regarding the decision to transfer the NAC under the Parliament subordination was adopted in two readings in one day, without any public consultation. The director of NAC represented the Democratic Party (Transparency International Moldova et all 2017: 15) and therefore was not considered an independent authority. During the interview with the coordinator of the CIB program, L. Ciurea, it was mentioned that the reforms of the third CIB institution from the cluster 2, Ministry of Internal Affairs, the main results were mainly declarative. This institution requested more financial assistance for the procurement of computers, soft programme and other technical equipment (Interviw, Ciurea, State Chancellery). In this situation, the Ministry of Internal Affairs developed a Twinning project focusing on relevant supplies. In 2011, the EU provided EUR 4.4 million to finance a project for the enhancement of the forensic laboratories. In 2012 an amount of EUR 2 million was offered through a Twinning project on complementary supplies for development and implementation of the ‘Intelligence Led Police’ concept (COM 2015e AAP: 14), whose goal was to modernise and consolidate the police system in line with EU standards and best practices (Twinning 2015: 2). Relevant study visits and seminars were organised on the national level through which the importance of democratic reforms were promoted and respect of fundamental rights and impartiality and independence of judiciary institutions preached. The specialised instruction for the police staff was focused on technical learning on software programmes and specialised laboratories (Interview, Ciurea State Chancellery; Interview, Gumene State Chancellery).

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4.2.3. Cluster 3 Deep and Comprehensive Free Trade Agreement

The third CIB cluster in Moldova supported the DCFTA that the country negotiated with the EU since 2010, and which Moldova and the EU signed in 2014, together with the Association Agreement. The DCFTA approach which the EU used in its trade negotiations with Neighbourhood countries was one of the of the most far-reaching trade proposals for third countries. They were inspired by the EU’s agreements with pre-accession countries. The DCFTA offered the possibility to integrate these countries into the EU market without becoming members of the EU. The main goal of DCFTAs is to support the transition to a market economy, to increase economic and trade relations and to offer assistance and expertise on the approximation of related legislation in line with the EU standards. Box 4.3 highlights the aims of the CIB institutions within cluster 3 concerning the implementation of the DCFTA.

Box 4.3. Expected results under CIB reforms Cluster 3 DCFTA - Implementation of the ‘key recommendations’ submitted to that end by the European Commission in line with the Action Plan prepared by the Moldavian Government. - In-depth reflection on Moldova’s economic model and the definition of a path towards a more resilient model based on knowledge, investment enhanced productivity and high competitiveness. - Professionally equipped institutions with clarified responsibilities and sufficient and adequately trained personnel, able to improve their policy setting capacity and to interact actively with the DCFTA negotiating and implementing process. Ability to identify and address existing tariff and non-tariff barriers to trade, for agriculture and industrial products and services. - Significant further approximation efforts to EU norms and standards in particular market regulation rules, in all sectors. At the same time, implementation of sectoral strategies or action plan and existing laws designed to harmonise the trade related legal framework to the EU Acquis. - Implementation of EU best practices in trade related areas, such as assurance, the protection of competition or the financial management of agricultural programmes. - Implementation of DCFTA communication plan. At the same time, a country trade facilitation strategy in view of helping Moldova businesses and Moldovan regions, to realise the export opportunities generated by the future DCFTA including though adequate investment-support and financing schemes. - Development of an entrepreneurship and innovation culture through enhanced general and vocational training system, to be eased by the simplification of business procedures. - Adequate prioritisation of DCFTA objectives in Moldova’s medium term expenditure framework (MTEF). Inclusion of business support mechanisms and agencies into the MTEF. Source: Framework document Moldova 2010: 9-10.

The AAP Moldova (COM 2013a: 35) described the concrete action points of CIB on DCFTA as: (i) overall coordination and administrative capacity building; (ii) market access for goods/trade statistics; (iii) tariff and non-tariff barriers (NTBT); (iv) technical barriers to trade (TBT); (v) sanitary and phyto-sanitary (SPS) measures; (vi) trade facilitation and customs administration; (vii) rules of origin (RoO); (viii) services and

173 investment; (ix) intellectual property rights (IPR); (x) public procurement; (xi) competition; (xii) sustainable development. All CIB institutions from cluster 3 prepared SDPs in which they developed the main actions that must be taken to prepare themselves for the implementation of the DCFTA. In this cluster, the CIB institutions in Moldova were quite inter-connected in their activities, meaning that reforms by one institution often had consequences for some or all of the others. Some of the CIB institutions developed a Twinning project for cooperation with counterpart administrations from EU member states. Other CIB institutions approximated the specific legislation according to the EU standards with the help of technical assistance from other projects, while a few others focused on instruction of their staff. CIB work on DCFTA covered the following issues: - trade in goods; - trade in services; - technical Barriers to Trade and Market Surveillance; - custom legislation and custom procedures (Misane et all 2017: 7; EaP Civil Society Forum p7). Developing institutional reforms in these areas is technically complex. Work areas comprised the following: harmonisation of laws with EU acquis; boosting productivity; enhancing national competitiveness; public administration reform in the concerned institutions; e-governance; fighting corruption; developing a Trade and Investment Strategy to attract Foreign Direct Investment in Moldova (Misane et all 2017: 7-8). Signing a DCFTA implies first of all alignment of a partner country’s legislation with EU regulations. Legal approximation in Moldova with international trade standards had already related with the countries accession to the World Trade Organisation in 2001.53 In fact, WTO membership of a country is condition for the implementation of DCFTA (Delcour et Wolczuk 2013: 9). Since 2008 the EU offered free access to the EU market for almost all Moldavian products through the autonomous trade preferences (ATPs) regime (COM 2013 ENP Report: 11). The EU had taken the decision to grant ATP access to

53 World Trade Organisation (2001) WTO’s General Council approves accession of Moldova, retrieved from https://www.wto.org/english/news_e/pres01_e/pr224_e.htm [accessed on 12 July 2019].

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Moldova because of Russia’s import ban on several Moldavians’ agricultural products54 (Emerson and Cenusa 2018: 40). The technical part of the DCFTA negotiations between the EU and Moldova started in February 2012 and lasted until June 2013. In the EU’s perspective, the Union thereby provided the overall framework for improving Moldova’s trade and trade-related environment (ENP Report 2013: 11). In a highly technical process, Moldova brought its trade-relevant legislation in line with the EU acquis. Legal approximation is a condition and significant tool to achieve economic integration of Moldova into the EU internal market law.55 The AA covers the term of approximation in a large context. According to the art 451 of the AA the assessment of the approximation law in Moldova to EU law emphasises especially ‘the aspect of implementation and enforcement’ (COM 2014c: 6; Association Agreement Moldova – EU 2014). Furthermore, Moldova shall carry out gradual approximation of its legislation (Association Agreement Moldova – EU 2014, art. 448). One more important aspect regarding the legal approximation is that this process is focused on three stages: translating the acquis into national language, drafting of legislation and compliance checking (Wolczuk 2018: 18). In Moldova, the process of legal approximation was facilitated by the fact that for Romania the acquis had already translated during the process of accession to the EU and that therefore Moldova could profit from an existing complete translation in its own language. Furthermore, the acquis is constantly being up-dated in Romanian, which is an official EU language since the country become EU member in 2007. Explicatory main information on the EU (history, policies, legislation, facts and figures, etc.) is as well available in Romanian (and all the other EU official languages) on the EU institutions’ websites. However, Moldova still needed to build up domestic EU expertise because EU directives may be in contradiction with issues regulated at national level, and because in general the practical approximation process is extremely cumbersome. Another aspect is that draft legislation implying ‘structural changes’ should be preceded by ‘an ex-ante

54 The ATP trade preferences for Moldova lasted until December 2015, including a transition period from ATPs to DCFTA. 55 It is important to note that there is a difference how EU Member States and third countries have to ensure that their national legislation is in line with the EU acquis: While for Member States this process is called ‘transposition’, the correct term for third countries is ‘approximation’ (COM 2014c: 6). 175 impact assessment’, which was a challenge for Moldova due to lack of trained staff or domestic technical capacity (Wolczuk 2018: 20). EU acquis compliance checking of draft national legislation by a competent authority is mandatory for all laws, regulations and directives with an ‘EU acquis character’. The national legislation covering the compliance check is Decision no 1345 adopted by the Moldavian Parliament on approximation of legislation of Moldova to the EU acquis (Wolczuk 2018: 21-22). The DCFTA comprises three important components that are relevant for CIB institutions. The first component is ‘Trade only’. It covers the conventional aspects of a free trade area agreements focusing on reduction of import and export tariff duties adoption of the rules of origin practices along the lines of the pan-Euro-Mediterranean Convention. The Rule of ‘Trade only’ has three main aspects: (i) tariff rate quota, (ii) rules of origins (iii) right of establishment. The second component covers ‘Deep’ aspects. This component focuses on non-tariff barriers, including food safety, sanitary and phytosanitary measures, technical standards for industrial products, approximation to the EU law on national treatment, public procurement, services and customs administration. The third component comprises ‘Comprehensive’ aspects and is related to national treatment and market access for goods, trade remedies, sanitary and phytosanitary measures and technical barriers to trade, customs and trade facilitation, trade in services, intellectual property, electronic commerce, capital movement, public procurement, anti-trust and competition, energy issues, transparency, sustainable development, dispute settlement and mediation (Adarov and Havlik 2016: 19). As mentioned, a number of CIB institutions developed Twinning projects in which they wanted to cooperate with counterpart institutions from EU countries. Within the CIB programme, the State Agency for Intellectual Property prepared and implemented a Twinning project called ‘Support to Implementation and Enforcement of Intellectual Property Rights in the Republic of Moldova’ with duration of two years 2010-2012. This Twinning project was done in cooperation between Moldovan experts with government officials from EU member states: Denmark and Romania. The main objective of the project was ‘to improve implementation and enforcement of intellectual property rights in the Republic of Moldova’. The project helped to improve the communication between government institutions that are responsible for intellectual propriety rights, by increasing the ‘awareness of the importance of protecting intellectual property rights and

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(contributing) to the development of the national system of protection of geographical indications, appellations of origin and traditional specialties guaranteed’ (AGEPI 2010). Another CIB institution the National Agency for the Protection of Competition developed a Twinning project called ‘Support for the implementation and enforcement of policy on competition and state aid’. The duration of this project was 18 months. In September 2012, the Law on Competition came into effect and the then National Agency for Protection and Competition was renamed the Competition Council of the Republic of Moldova (Parliament Law no.183 2012). The main objective of the Twinning project was to draft two laws. The first one, the Law on Competition entered into force in 2012. The second one, the Law on State Aid entered into force one year later (Parliament Law no.139 2013). During the preparation of these laws within the Twinning project, EU experts from Austria, Romania and Latvia were present as Residential Twinning Advisors (RTA) and advised on European good practices and expertise (PAO newsletter no.4). These two new laws are considered important pillars for the economic development of the country and for the implementation of the DCFTA in practice. The Ministry of Economy developed two Twinning projects. The first Twinning project ‘Strengthening the Capacity of the Centre of Accreditation in the Field of Products Conformity Assessment of the Republic of Moldova’ developed during 2012-2014 had as objective ‘to improve the trade competitiveness of Moldova and to harmonize the quality infrastructure with international and European standards’ (COM 2010f Twinning Project 1). The second Twinning project developed by the Ministry of Economy was called ‘Support to the Main State Inspectorate for Market Surveillance, Metrology and Consumer Protection’ and had the overall objective ‘to contribute to the implementation of the requirements for market surveillance in line with the requirements of EU regulatory instruments’ (COM 2010g Twinning Project 2). The main issues in this project were: the necessity of revision the legislation regrading regulating market surveillance, lack of cooperation between the market surveillance authorities, lack of methodology for planning market surveillance activities based on risk analysis, and deficient capacities for laboratory testing lack of mechanism for communication and interaction with business (PAO newsletter no 5). In 2010, the EU recommended to the Moldavian Government the creation of a single institution responsible for food safety management (Delcour 2016:114). In 2011, Ministry of Agriculture and Food Industry (MAFI) adopted the Food Safety Strategy 2011- 2015 and a detailed Action Plan. In the same year (2011), a plan for EU approximation in

177 this sector was developed (Delcour 2016: 114). In 2012 the Law on establishing principles and requirements general of food safety legislation was approved (Law no.113 2012), in line with EU standards. As an output of this reform process, in 2013 Moldova’s Food Safety Agency was established as a single food safety control authority for the entire food chain. Another Twinning project ‘Support to Moldova in the field of norms and standards in food safety for plant origin products’ was developed in 2012-2014. The institutions that beneficiated from this project were the MAFI and the National Food Safety Agency (NFSA). The overall objectives were: - development of the agricultural and food sectors of Moldova in compliance with EU and international rules and to support the ability of these sectors to participate more fully in international trade; - risk-based national pesticide monitoring programme that ensures compliance with EU regulations and increases consumer protection; - implementation of the concept and practice of a risk-based approach in all relevant activities of the NFSA, particularly relating to pesticides; - sufficient capacity of the NFSA to define, plan, organise and achieve strategic and operational objectives by using EU compliant approaches which are risk based and targeted at prevention (COM 2012a Twinning project fiche 4). Finally, in 2013 a Twinning project ‘Support to the National Food Safety Agency of the Republic of Moldova’ was developed with a duration of two years. The main objective was ‘to enhance the commercial and export potential of the agribusiness food chain in Republic of Moldova in line with EU standards and DCFTA technical requirements’. The role of the Twinning project within National Food Safety Agency (NFSA) was to strengthen the capacity of NFSA in ‘managing all aspects of food safety from the farm to fork, in establishing unified food safety control system at the central level, with regional and local representations and in enforcing compliance of agro-food operators with national/EU standards in view of DCFTA’ (COM 2012b Twinning project fiche 3).

4.3 Preliminary results of Comprehensive Institutional Building in Moldova

This sub-chapter discusses the preliminary results after the implementation of most of the CIB projects and activities in Moldova. CIB institutions in Moldova were selected

178 on the basis of their responsibilities regarding the AA and DCFTA, so that the implementation of these major new agreements would not be impeded because of lack of preparation by the national administration. However, one key ministry was not included in the list of CIB institutions, namely the Ministry for Foreign Affairs and European Integration (MFAEI), although it obviously is a major institution in the process of the European integration of Moldova and in the process of negotiation and implementation of the EU Agreements. It might be speculated that insufficient preparation of the MFAEI has contributed to limited success of CIB in Moldova. Yet, since 2014, the ENI, which is the second ENP tool after the ENPI, when has started implementation of the annual action programmes, the MFAIE has the main role to coordinate the communication between the EU Delegation in Moldova and beneficiary public institutions56. During talks with the head of Monitoring and Evaluation Division of the State Chancellery, he commented that there was not used a specified methodology in the process of the selection of institutions, thus the process of identification of institutions was used according to the responsibilities of the institutions for the implementation of the AA. In this context, the 13 CIB institutions that were analysed in the previous sub-chapter (see 4.2.1; 4.2.2; 4.2.3) were selected according to their competences in accordance with the expectance of the EU Agreements implementation.

Preliminary results in CIB Cluster 1 CIB reforms under cluster 1 were focused on building a civil service capable of promoting the European integration and approximate primary and secondary legislation to the EU acquis; preparing the civil servants for the implementing of these reforms and to adapt the public financial management in line with international standards and shape an efficient public procurement system; implement e-governance in the Moldavian administration. The State Chancellery, as the CIB coordinator, built its technical capacity and leadership in order to provide adequate assistance in the identification, preparation and implementation of different projects including Twinning, Taiex and Sigma funded by the EU or other international donors. The preparation of the SDPs by the CIB institutions took longer than intended. This could be explained by the fact that many institutions did not know how to identify the main issues in their institutions and which kind of activities,

56 Government of Moldova, MFAEI, Comprehensive Institution Building programme info, retrieved from https://www.mfa.gov.md/ro/content/cib-info [accessed on 04 May 2019].

179 projects and programmes could be implemented to diminish or reduce the existing problems. Time was also needed in order to change and harmonise the existing Institutional Development Plans with the SDPs foreseen under CIB. On the positive side, the State Chancellery tried to include as many institutions as possible in the CIB programme. As funds were not sufficient to directly support institutional reforms in the whole central administration, a differentiation was made between 13 core institutions which benefited directly from CIB, and 18 non-core institutions which did not directly receive funds from the EU through CIB, but could participate in certain CIB activities and were encouraged to plan and carry out similar institutional reforms. In this way, a significant of the Moldavian central public administration institutions had access to EU know-how, even if this access was often not used as much a possibility. Civil servants participating in CIB activities were given the opportunity to acquire English skills related to project management and their respective fields expertise. They were instructed in the complex practices and procedures of the EU related to the implementation of the AA and the linkage that is created between the Moldavian public institutions and the EU ones. These practices are important for Moldavian institutions because they can ‘borrow’ good practices and transfer or adapt them to the domestic context. However, the important issue of high staff turn-over has to be mentioned here. Moldovan civil servants who participated in CIB projects and trainings were able to acquire competences, that later on enabled them to apply for better paid jobs outside the CIB institutions (Interview, State Chancellery). In this way, public institutions first trained their staff from specific departments to improve their capacities and increase professional motivation. Then, these institutions lost many of their best staff because of low salaries. The CIB programme (and EU technical assistance in general) invested significant efforts and funds in projects and training activities, but did not insist on a sustainable public administration reform that would have tackled to central problem of low salaries in the public sector in Moldova. Based on the interviews, the State Chancellery and the EU Delegation in Moldova made a mistake by preparing professionally the civil servants but not offering a good remuneration to motivate staff and experts to stay in the CIB institutions as well as non- CIB institutions. The discrepancy of salaries between international institutions (including the EU) operating in Moldova and the national administration can reach 700-1000% and

180 has not remained unobserved. Even if the competence area is similar for Moldovan civil servants and experts in state institutions and the EU Delegation, salaries are quite different. For example, the State Chancellery regularly revises and analyses draft legislation and public policy documents. The EU Delegation in Moldova does the same, but with considerably higher salaries for national policy managers. This can lead to frustration and an incentive to leave jobs on the side of the State Chancellery and other Moldavian institutions. A similar conflict exists between national civil servants and Moldovan nationals working in international (including EU-funded) technical assistance projects, with the latter group again being substantially better paid. Even if a CIB-trained Moldovan expert does not want (or cannot) change jobs, his or her motivation can be negatively impacted by the mentioned pay gap. Technical assistance projects often suffer from the fact that most high-quality work is left to the well paid international experts, while national experts limit themselves to more administrative work (organisation of events and external contracts e.g. for translations, etc.). In this way, Moldovan experts do not fully profit from the knowledge built up or communicated in a project. Much of the knowledge leaves the country with the international expert when the project ends (interview, DEVCO). During the interview with the Project Manager at EU Delegation in Moldova, it was emphasised that due to the mentioned lack of a systematic civil sector reform in Moldova, Public Administration Reform (PAR) continues to be inefficient. Another important factor hindering real reforms is political and administrative instability, politicised state institutions and lack of a strong ground of PAR. Even if the reform of the central administration has been initiated a long time ago, it is still ongoing. The number of ministries has already been reduced a few times. The last initiative of reduction of ministries was in 2017, from sixteen to nine. However, as of 2019 there are still major issues for example regarding the merging of the Ministry of Health that merged with the Ministry of Social Assistance. According to Health Minister Ala Nemerenco, these two ministries should be separated because it is not possible to cover all the problems in the field, merging by contributing to the ‘breaking’ of the institution's activity57. Previously, these two ministries were merged, and then they were separated.

57 The (former) Health Ministry made this declaration when she was invested in the position of Health Ministry by the new Government conducted by Maia Sandu in June 2019. See: AGORA (2019) Ala Nemerenco sustine separarea Ministerului Sanatatii, Muncii si Protectiei Sociale: ‘Nu este posibila acoperirea tuturor problemelor’, June 24. Retrieved from https://agora.md/stiri/58638/ala-nemerenco-sustine-separarea-

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The role of the EU Resident Twinning Adviser (RTA) was considered to be important because of the transfer of good practices and expertise. A Twinning RTA was appreciated when he or she understood the context of Moldova and how to redress the issues in a specific area so that the Twinning project for an institution could be successful. On the negative side, the political instability led to the fact that practices were not institutionalised. From 2009 until the present, prime-ministers often changed and every time the approach of institutional building was changed as well, according to the activity program initiated by each new leader and new government58. Therefore, a possible issue, identified by J. Rodriguez and V. Croitoru, that determined the insufficient reform of public administration and rebuilding of public institutions was the political instability. The frequent changes of government have hampered the process of policies and reforms coordination following the established plan of actions initiated by each CIB institutions as well. For this reason, often the EU expert (RTA) was not able to transfer the necessary expertise for the complex policies, because there was a lack of political support and stability for the necessary public policy framework (Interviews Rodrigues, Delegation of the EU to Moldova; Croitoru, State Chancellery). On the side of international consultancy companies which implement CIB and other technical assistance projects, the incentive is to implement the respective project with a minimum of changes as compared to the offer they had submitted to the EU (or national administration, or other donor) when they had won a service contract tender. Again, the incentive is not to ‘dive deep’ into the local situation, but to provide relative standardised technical assistance projects that could be offered to Montenegro as well as to Moldova. A perverse joint incentive structure can therefore appear in which the responsible civil servants, international consultancy and international experts have the same interest to implement projects ‘without problems’, but also touching the ‘real problems’ on the ground, such as the need for deep administrative reforms, including salary reforms (interview, DEVCO). One of the main goals of the state institutions within the CIB framework was the modernisation of public services, especially the introduction of new e-services for the use of Moldavian citizens, businesses, and other public institutions. In the sub-chapter 4.2.1, ministerului-sanatatii-muncii-si-protectiei-sociale-nu-este-posibila-acoperirea-tuturor-problemelor [accessed on 21 July 2019]. 58 Prim-Ministries in Moldova: V. Filat (Sep. 2009 – Apr. 2013); I. Leanca (Apr. 2013 – Feb. 2015); C. Gaburici (Feb. 2015 – Jun. 2015); N. Gherman (Jun. 2015 – Jul. 2015); V. Strelet (Jul. 2015 – Oct. 2015); G. Brega (Oct. 2015 – Jan. 2016); P. Filip (Jan. 2016 – Jun. 2019); M. Sandu (Jun 2019 – November 2019); Ion Chicu (November 2019 - present). 182 the main e-services provided by the Moldavian EGC within the State Chancellery were described. The idea of e-public services for G2C, G2B and G2G lead first of all to the improvement of public services to adapt them to new technologies, to increase transparency between public institutions and in their relations with citizens as well, and improve public participation regarding the Government decisions. Progress in this practical field of e-governance can be considered as one of the successes of the CBI programme in Moldova. According to the UN E-Government Index 2018, Moldova has improved its international ranking from position 80 in 2012 to position 69 in 2018 by its enhancing and increasing access to information, promoting digital services through its public institutions and promoting e-governance. The UN E-Government Index shows a slight fluctuation to 64 in 2014, respectively 65 in 2016 as it is shown in the figure 4.4.

Figure 4.4 E-Government Index provided by the UN (2010-2018)

2018 69 2016 65 2014 66 2012 69 2010 80

0 10 20 30 40 50 60 70 80 90

Source: designed by the author based on data from UN E-Government Index 2010, 2012, 2014, 2016, 2018.

An Open Government Data platform in Moldova was launched in 2011. However, according to the E-Participation Index59 provided by the UN there is a low interest from the citizens regarding respective government data. E-Participation, as a concept, means ‘the process of engaging citizens through ICTs in policy, decision-making, and service design and delivery so as to make it participatory, inclusive, and deliberative’ (UN E- Government Index 2018: 112).

59 The UN E-Participation Index uses the following indicators: E-information, that means enabling participation by providing citizens with public information and access to information without or upon demand; E-consultation, that means engaging citizens in contribution to and deliberation on public policies and services; E-decision-making, that means empowering citizens through co-design of policy options and co-production of service components and delivery modalities, see UN E-Government 2014: 197.

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Figure 4.5 shows the participation and interest of Moldavian citizens regarding government data.

Figure 4.5 E-participation citizens in Moldova (2010-2018)

2018 58 2016 38 2014 40 2012 50 2010 37

0 10 20 30 40 50 60 70

Source: designed by the author based on data from the UN E-Participation Index.

An explanation of this result could be found in the already mentioned low public interest. Citizens are not demanding ‘disclosure of government data, in contrast with most other countries where government data was released under strong public pressure’ (UN E- Government survey 2014: 175). In this respect, a Moldavian Think Tank ‘Expert Group’ is working on a project ‘Budget Stories’60 in which it presents budgetary information in the form of easy to understand infographics, visual stories and facts. In order to adjust the national legislation to the EU standards, the Government of Moldova adopted the Action Plan 2011-2013 within CIB programme. The Action Plan established the objectives focusing on the strengthen institutions both central and local, approximation of the legislation on the EU standards, transparency and modernisation of the public procurement system. Despite the approximation of legislation on public procurement to the EU acquis and other institutional reforms that the Public Procurement Agency conducted, there are many issues that still exist and need to improve, such as lack of transparency especially in the procedures of negotiation of tenders without any publication, failure to provide reasonable time for preparing of the tenders as well as the terms for the closure of agreements is too short (IDIS Viitorul 2018). Notwithstanding efforts of modernisation and digitalisation (e-procurement), this institution still remains underdeveloped and continues to lack transparency in its activities. Whereas the digitalisation of public procurement seems to improve the process of transparency and diminish the level of corruption in this area, a study published by IDIS

60 Expert-Group, Budget stories, retrieved from http://www.budgetstories.md/, [accessed on 29 June 2019].

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Viitorul, a Moldavian Think Tank61, has shown that the confidence of citizens in the Public Procurement Agency is mostly low (Figure 4.6). Partially because of this reason, the efficiency of this institution is low as well (Figure 4.7).

Figure 4.6 The level of confidence in the public procurement system The level of confidence in the public procurement system

very high high moderate low very low

10% 4% 10%

32% 44%

Source: designed by the author, data adapted from IDIS Viitorul

Figure 4.7 The efficiency of the public procurement system The efficiency of the public procurement system

very high high moderate low very low

18% 37%

32%

Source designed by the author, data adapted from IDIS Viitorul According to the ‘Association Implementation Report on Moldova’, reforms within the Ministry of Finance continue. In 2017, Moldova enrolled in the International Budget Survey and scored 58th out of 100 countries on budgetary transparency (COM 2018c Progress Report: 3-4).

61 IDIS Viitorul, Moldavian Think Tank, developed the project ‘Cutting edge improvements in the public procurement system in Moldova through inclusiveness, creativity and law-adding practices’ financed by the EU. See: IDIS Viitorul, Achizitii publice, retrieved from http://www.viitorul.org/ro/content/achizitii-publice [accessed on 10 July 2019]. 185

The recommendations of the European Commission regarding the improvement of the activities of the Ministry of Finance in order to have a better implementation of the AA remain valid, despite the implemented CIB projects:  improving public participation in the formulation and monitoring of the annual budget;  creating the parliamentary Public Accounts Committee in order to strengthen the parliamentary oversight of the budget execution (COM 2018c Progress Report: 4). Regarding the process of e-transformation of the public services, there is still resistance from some public institutions. Some institutions and economic agents prefer to use paper invoice rather than e-invoice. This comes despite many positive arguments for economic agents to use e-invoices instead of paper ones, such as data security, fast operations, lower costs in the billing process operation, excluding postal taxes. Apart from these positive facts, using of e-invoice will improve the quality of public services, diminish corruption and increase transparency in public procurement process and economic activities and accelerate the process of e-transformation of country. E-invoice means more transparency, or ‘paper invoice’ creates some open ways for corruption (CPR 2019). The e-invoice had to be mandatory starting with June 2019. However, the Moldavian Parliament voted a decision in the first lecture and the using of E- invoice was postponed for one more year, for July 2020.

Preliminary results in CIB Cluster 2 Despite many reforms requested by the EU and many CIB and other projects that were implemented or are ongoing with the support of the EU and other international actors, the field of justice and law enforcement in Moldova is still considered weak, corrupt and much politicised. Weak institutions in the justice sector undermine public trust in law enforcement in judicial system. According to the Institute of Public Policy the public trust in justice system decreased from 2009 to 2018 as documented in the Figure 4.8.

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Figure 4.8 Public trust in justice system in Moldova 2009-2018

40 36 30 25.01 23 20 18.3 14.8 15.5 13.6 15.6 10 12 7.8 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: designed by the author based on data from Barometer of Public Opinion62 from 2009 to 2018.

Regarding the Public Prosecution Office, there is little evidence for real reforms. One of the problems is that the Public Prosecutor Office lacks independence, despite the adaptation of the new laws regarding integrity and transparency in the judicial system (COM 2014b Progress Report: 6). A high level of corruption persists in many key sectors such as justice, customs, public procurement, social sphere and education (COM 2014b Progress report: 6). As from June 2019, the new atypical coalition between the Socialist Party and the Bloc ACUM led to a transfer of power and a start of release of perceived ‘state capture’ by an oligarchic group around Democratic Party leader Vladimir Plahotnuc. There are two institutional processes taking place in Moldova. Firstly, a release of institutions from ‘state capture’, a process that is still on-going at time of writing and secondly, the consolidation of democratic institutions. For the moment (2019) the process of ‘cleaning’ institutions from corrupt or unqualified officials63 is still in progress, and remains to be seen if this process will proceed on the basis of objective, unbiased criteria. Moldova has inherited one of the most unreformed and weakest prosecutorial systems in Europe. Reforming the prosecution system was given by the EU as a condition for budget support. However, the Moldavian Parliament failed to reform the prosecutorial system and as a result the EU decided to withhold EUR 1.8 million of the envisaged EUR 60 million. A reason for this failure could be that even if the Parliament approximates

62 The answers are based on the question: To what extend do you trust in … . The distribution of cumulative response ‘very much trust’ and ‘some trust’. 63 From June 8th to July 5th 2019 more than 30 business executives, state secretaries, head of public institutions, political parties’ leaders resigned or were resigned. This situation happened when M.Sandu was Prime-Minister of Moldova and one of the priority initiated by her was cleaning up the state institutions. However, in November 2019, the Sandu’s Government fell after losing the confidence vote pushed by Socialist Party. 187 legislation according to the EU requirements, there was a lack of political will and interest to implement the reform measures in practice. The reform of the Anti-Corruption Prosecution Office has also lagged behind, as another example of unsuccessful or incomplete CIB-inspired reforms. Another example is ‘the recycling of incumbents in key positions’. An example is the case of the Prosecutor General Eduard Harunjen, who was selected by the Superior Council of Prosecutors in a public contest and within 24 hours approved by the previous President of Moldova Nicolae Timofti, despite publicised materials about his excessive personal wealth and allegations that he gave the order to close a criminal investigation involving the death of a person in the civil unrest of 2009 (Blockmans et all 2018: 17). Furthermore, E. Harunjen worked in the Anti-Corruption Prosecution Office between August 2013 and July 2015 (including the period of bank fraud) before being successively promoted to the position of first-deputy of the Prosecutor General, Interim Prosecutor General and then Prosecutor General (Blockmans et all 2018: 17). Another aspect that should be mentioned here is the fact that these legal institutions are excessively politicised and still under control of V. Plahotniuc (Democratic Party) (the process of ‘deoligarchisation’ of the state institutions has started once Maja Sandu became Prime-Minister of Moldova)64. However, the high level corruption cases of persons affiliated to the other parties (Liberal Democrat Party and Liberal party) were ‘examined behind closed doors’. Moreover, the Supreme Court has in the past few years not take important decisions against the interests of the Democratic Party (Blockmans et all 2018: 17). An important aspect of institutional building in the justice sector was the approval in 2011 by the Moldavian Parliament of the National Anticorruption Strategy for 2011- 2016 (Parliament Decision no.154, 2011). The main actions were focused on the following: a) efficient and effective combating of corruption in the justice sector; b) strengthening of the mechanisms facilitating the implementation of the ethical standards of anti-corruption behavior at the level of institution of the justice sector; c) development of the segment of justice culture of zero intolerance to corruption among administration body-institutions (Parliament Decision no.154).

64 On 12 November 2019, the Sandu Government was dismissed by a censor motion initiated by Socialist Party.

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Despite existing international mechanisms and different initiatives in the fight against corruption, reports show that corruption in Moldova remains a major problem. During the last 1o years several stages of corruption could be noted. The figure 4.9, according to the Transparency International, highlights that corruption in Moldova registered a slight increase in 2012, however in the following years the corruption coefficient decreased to the score 31 out 100 and was ranked at the 123nd place out 176 on the same place with countries such as Azerbaijan, Djibouti, Honduras, Sierra Leone (Transparency International 2016). Countries with a low score in Corruption Perception Index (CPI) are considered to be ‘plagued by untrustworthy and badly functioning public institutions’ and ‘the anti-corruption laws exists only on paper and people are confronted with bribery and extortion’ (Rahman 2017: 4). In 2018, the CPI in Moldova was moved from 31 out 100 in 2017 to 33 in 2018 and was ranked 117 out 180 (Transparency International 2017; Transparency International 2018). In border terms, the level of corruption remained on the same level, so that this undermined the democratic state institutions and shows a significant aspect that the public institutions in Moldova a still weak and are not able to control corruption. Moreover, the performances regarding the fighting against corruption in Moldova are poor, however, with the changing of the new Government in 2019, there is a hope for anti-corruption effort.

Figure 4.9 Corruption Perception Index in Moldova 2009-2018

Corruption Perception Index 2009 - 2018 40 35 36 35 35 33 33 33 31 30 29 29 30 25 20

Tytuł osi Tytuł 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: designed by the author based on data from CPI 2009-2019

As regard to Box 4.2 p. 168 (the cluster 2) the CIB institutions failed in the implementation of the required reforms. The anticorruption legal and institutional framework was strengthening due to external pressure after 2009 in the form of aid of

189 conditionality policies. However, until June 2019 when the Government conducted by the Democratic Party controlled by the oligarch V. Plahotniuc, political will to fight against corruption and rebuilding strengthening and democratic institutions was limited. The reforms of the prosecutorial and integrity system remain long overdue (Emerson et all 2017:3). Even if the creation and reformation of the NAC was done, the implementation of the activities of this institution remains weak and enforcement inconsistent. Another issue identified is the unprecedented scale of politicisation of state institutions revealed especially after banking scandal in 2014 and increasing of power into single oligarchic group hands that placed Moldova into an extreme ‘state capture’ category (Emerson et all 2017:3).

Preliminary results in CIB Cluster 3 After five years (2019) of the DCFTA implementation it is important to evaluate the role of the CIB institutions from the CIB cluster 3 and the main challenges that had emerged. DCFTA is an important agreement for the economic development in Moldova because it establishes a free trade area between the EU and Moldova. The provisional application started in September 2014 and in November 2015 Moldova announced that the conditions had been fulfilled for DCFTA application on the entire territory. In 2016, the agreement is fully operational for the territory of Moldova.65 In 2016, the CIB key institutions from the cluster 3 made significant efforts to approximate the national legislation in line with the EU acquis (EC Progress Report 2017:6). Generally the CIB institutions (cluster 3) have received EU technical assistance

65 Except the Transnistrian region. From the inception, Transnistria did not show interest in being part of the DCFTA. It was understandable, because DCFTA requires the approximation of the framework in line with the EU, or Transnistria is a region that is strongly economic and political depended on Russia. However, as Moldavian economist predicted that ‘Transnistrian companies will put pressure on the Tiraspol representative to become more cooperative and the AA with the EU will create a natural prerequisites for the country’s integration’ see: Eurasianet (2016) Moldova: separatist Transnistria region reorienting trade from Russia to EU, retrieved from https://eurasianet.org/moldova-separatist-transnistria-region-reorienting-trade-from- russia-to-eu [accessed on 19 July 2019]; Secrieru, S. (2016) Transnistria Zig-zagging towards a DCFTA, Policy Paper, No.4 (145), PISM; Gumene, V. (2019) Transnistria: DCFTA’s implications for foreign trade, Policy brief No.6, Understanding the AA between the EU and Moldova, Georgia and Ukraine, retrieved from https://3dcftas.eu/publications/dcfta%E2%80%99s-implications-for-foreign-trade-of-the-transnistrian-region, [accessed on 19 July 2019]. Rregrading Transnistria and the AA/DCFTA see: Litra, L. and Popescu, N. (2012) Transnistria a bottom up solution, European Council on Foreign Relations, retrieved from https://www.files.ethz.ch/isn/173479/ECFR63_Transnistria_Brief_AW.pdf [accessed on 12 July 2019]; Prohnitchi, V. and Lupusor, A. (2013) Transnistria and the Deep and Comprehensive Free Trade Agreement: a little stone that overturns a great vain? Policy notes No.2, Expert-Group, retrieved from http://pdc.ceu.hu/archive/00006664/01/Expertgrup2013_Transnistria_and_DCFTA.pdf [accessed on 29 November 2019].

190 through Twinning projects, EU expertise through EU Highly Advisers as well as human capacity development through staff trainings, visit studies and specialised seminars. However, the weaknesses in human resources still persist because of law remuneration. As regards the international EU experts who are involved in CIB or other technical assistance programme, may be in some way problematic as well. During the interview conducted by the author, it was mentioned that an international technical expert on, for example, phytosanitary trade standards, typically does not only work in Moldova. Often he or she is partially or fully employed in 5-10 similar aid projects in a wide range of countries over a period of several years. Payment of the international expert is on the basis of delivered expert days, not on results achieved. The easiest way to deliver the expert days is to provide a similar (or in the worst case identical) set of expert material (draft presentations, regulations, training courses etc) only slightly adapted to national circumstances. It is not cost-efficient for the expert to deeply engage with national counterparts, or the interfere in highly political issues as salary reforms, lack of political will or corruption. The CIB institutions related to the implementation of DCFTA have focused mostly on approximation of national legislation, development Twinning projects and organised specialised trainings seminars in the EU Member States related to the AA/DCFTA and other relevant topics (PAO Newsletter no.2). The CIB institutions MAFI, NFSA and the Ministry of Health’s Public Health Service which is in charge of the control of non-animal food products, are inter-connected in their activities thereby the overall results are inter-connected as well. Overall, the implementation of the EU Twinning project developed by the NFSA in cooperation with the State Food and Veterinary Service of the Republic of Lithuania, concluded with the following results: - it was drafted in accordance with EU requirements of 20 national legal acts in the area of animal health and welfare, food safety were drafted an 30 ‘standard procedures and checklists, animal disease surveillance programmes, emergency plans’; - it was organised six study visits to Lithuania and Latvia for specialists from Moldova; - it was developed 14 seminars for more than six hundred participants; - it was carried out 10 training events with participation of 120 persons from the specialised institutions (SFVS Latvia 2019).

191

Moldova approved a new SPS Strategy in 2017 (Government Decision no.1150 2017), however sanitary and phytosanitary standards required more reforms. Even if the staff competences in ‘verifying feed and food law animal health welfare rules’ have been strengthened (COM 2017 Progress Report: 7) through CIB twinning as well as training through EU technical assistance under ENI, approximation and implementation of national legislation is slow. In 2018, according to the Association implementation report on Moldova, the situation remains the same without any improvements. Furthermore, ‘laboratory diagnostic capacities for monitoring and surveillance of animal diseases as part of official control remained weak and did not register significant improvements’ (COM 2018c Progress Report: 11). On the positive side, the Competition Council has progress on ‘regulation state aid by adopting sectorial regulations for various forms of aid’ as well as ‘the monitoring system is working well’. However, the main issue is the ‘factual independence of the institution’ and ‘possible obstacles to competitions’ (COM 2018c Progress Report: 12; COM 2017: 7). According to EU Agreements (DCFTA) the Competition Council must be independent and have power on how to authorise state aid. The Moldavian Competition Council started to approximate its legislation according to the EU standards in 2012 (see subchapter 5.2.3). It was revised and adopted Competition Law no. 183 and the Law on State Aid No.139. Apart from approximating its legislation, the Competition Council, with the support and expertise provided by the EU experts through technical assistance, has enforced and strengthened its capacity building as an institution (Emerson and Cenusa 2018: 119-122). The State Agency for Intellectual Property Rights (IPR) implemented positively the Twinning project ‘Support to Implementation and Enforcement of Intellectual Property Right’ and it is considered one of the most successful CIB institution regarding the development of Twinning projects as well as getting expertise and know-how from the EU side, for instance from the Danish Patent and Trademark Office (Denmark) and State Office for Intervention and Trademarks (Romania). The main results that have achieved were as follows: - a system of implementation and compliance with intellectual property rights has been developed; - an implementation mechanism has been identified and a good level of communication among the institutions responsible for the enforcement of intellectual property rights was established between the Ministry of Internal Affairs the Customs Services the General

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Prosecutor’s Office the Ministry of Justice the Ministry of Agriculture and Food Industry. All staff members responsible for these activities participated in workshops and seminars, study visits, and trainings targeting the enhancement of their skills (PAO newsletter no. 2). The legal framework on the intellectual property is consistent with both international and those of the EU. In 2015, the Government approved a National Intellectual Property Action Plan (2015-2017) based on the National Intellectual Property Strategy 2010 adopted in 2012 by the National Commission on Intellectual Property. The structure of the plan covers the responsible authorities and the necessary action to achieve objectives and respect deadlines (Emerson and Cenusa 2018: 111-114). Another positive aspect is the legal framework of the State Agency for IPR. The Agency works consistently on the harmonisation of relevant legislation on the ‘protection of copyrights’ with EU law. Some progress has been made in order ‘to bring promotion and protection of intellectual property closer to European practices (Emerson and Cenusa 2018a: 15). However, while the legal framework is mostly advanced, the main issue it the implementation and the improvement of institutional capacities (Emerson and Cenusa 2018: 115) as well as the considerable issues ‘on IRP enforcement, including in justice sector’ (COM 2018c Progress Report:12; COM 2017 Progress Report: 7). Regarding the national Agency for the Protection of Competition that is subordinated to the Ministry of Economy, both Twinning projects were implemented successfully. In result, one the hand, the ‘primary cross-sectorial legislation’ regarding ‘market surveillance, methodology and standardisation’ was adopted according to the AA/DCFTA (COM 2017 Progress Report: 6). On the other hand, it needs more implication on ‘the secondary legislation on the legislation on market surveillance and general product safety’. The problem consists in complexity of the legislation, lack of financial resources to implement it as well as lack of the specialised staff (COM 2017 Progress Report: 6). From 2014 until 2016 the implementation of DCFTA was influenced by economic and political issues that affected domestic demand and business confidence and had a negative impact on trade and investment activities (Emerson and Cenusa 2018: 42-43). Figure 4.10 presents exports of Moldova to the EU, Russian Federation and other CSI countries. The exports of Moldova to the EU countries can be evaluated as positive.

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Figure 4.10 Moldavian exports to the EU, CSI and Russian Federation (thousand USD) Moldavian exports 2009-2018 (thsd. USD) 3000000 2500000 2000000 1500000 1000000 500000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total CIS countries ..Russian Federation European Union countries (EU-28)

Source: designed by the author based on data from the National Bureau of Statistics of RM66.

In 2018, Moldova exported USD 2.706.1m in which exports to the EU were USD 1.861.8 accounting for 68% of Moldova’s exports. Moldavian exports to Russia, in 2018, was USD 218m accounting for 10% while the exports to the CIS countries were USD 415m which is 15%. However, in 2013 the total exports in Moldova were USD 2.428.3m and the Moldavian exports to the EU in 2013 were USD 1.137.2m which is equal to 46.83% , while exports to Russia were USD 631m accounting for 25,9% of Moldova’s exports, respectively for the CIS countries the total exports were USD 923m accounting for 38% of total Moldavian exports. So, it is clear that the EU is the most important export destination. One explanation could be the Autonomous Trade Preference opened for Moldova from 2008 in order to offer to Moldavian products free access on the EU market. As the DCFTA negotiations lasted until 2013 and from 2014 the EU AA/DFTA was signed, the liberalisation of trade between the EU and Moldova has a continuing positive progress (see all detailed data in Appentix I, Table A).

66 The information is presented without the data on enterprises and organization from the left side of the river Nistru and municipality Bender.

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Figure 4.11 Moldavian imports from the EU, Russian Federation and CSI countries (thousand USD) Moldavian imports 2009-2018 (thsd. USD) 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total CIS countries ..Russian Federation European Union countries (EU-28)

Source: designed by the author based on data from the National Bureau of Statistics of RM67.

In 2018 (see Figure 4.11) the total imports in Moldova were USD 5.760.0m of which USD 2.850.8m were imported from the EU accounting for 49.49% and imports from Russia were USD 720m consists of 12.5% and respectively imports from the CIS countries were USD 1.449.0 m accounting for 25%. Whereas, in 2013 in Moldova the total imports were USD 5.492.3 m of which USD 2.472.1m were imported from the EU which consists 45% and the total imports from Russia were USD788m accounting for 14.3% and respectively total imports from the CSI countries were USD 1.672.3 accounting of 30.44% (see all detailed data in Appendix I, Table B). To sum, the DCFTA is an important instrument for the economic development for Moldova. The main goal is not to liberalise trade in goods and services but also ‘to facilitate the adoption of EU standards’ in the areas such as public procurement, food safety, technical regulations, intellectual property rights and so forth. Both CIB institutions and non-CIB institutions work on the implementation of the specific reforms, approximation of national legislation in line with EU, and developing of friendly business climate.

67 The information is presented without the data on enterprises and organization from the left side of the river Nistru and municipality Bender

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4.4 Summary

In order to evaluate the impact of institutional reforms which were conducted under the CIB program, a ‘3E-criteria’ approach68 developed by Nicholas B. Stern, was used. The 3E stands for effectiveness, efficiency and equity. In this approach, the effectiveness dimension asks to which extent the CIB reforms were achieved. Efficiency analyses to what extent the CIB institutions were reformed during the established time by the EU (2010-2013) and what were the costs for it. Equity is focused on the selection of institutions for participation in the CIB program, the fair distribution of salary for civil servants who are involved in the reform of public institutions, and possible distributional effects for the broader population. Using this approach, it can be said that the reforms undertaken by CIB institutions in all three clusters in Moldova were partially effective. E-governance reforms under cluster 1 are a positive example. However, there is low interest by parts of the population for the new e-public services that were developed under CIB, as presented in figure 4.5. The process of e-transformation of public services also faced resistance from some public institutions. In this context, the implementation of the initiative ‘paperless government’ is under progress. The reforms under cluster 2 were less effective. The justice reform has shown slow progress in Moldova. Despite strong support and resources provided by the EU, not just under CIB but other programs as well, this has not yet resulted in an independent judicial system. Even where legal reforms have been enacted, implementation in practice has been unsuccessful because of a lack of political will on the side of the authorities. The reforms under cluster 3 were effective. Even if in this cluster seven institutions have been selected, the reforms implemented by these institutions were interconnected. As a result, the effectiveness of CIB goals for this cluster was greater. The implementation of DCFTA had a positive impact. As figures 4.10 and 4.11 show, the EU is the main trading partner of Moldova. Regarding the efficiency of the CIB program, the time established by the EU for the implementation (2010-2013) was too short. Taking into account the specifics of the

68 The term was used for the first time by Nicholas Stern in The economics of climate change: the Stern review (2006) Cambridge University Press. Stern explained that an international agreement regarding this issue (climate change) is essential and it should build on the principle of ‘3E-criteria’ effectiveness, efficiency and equity. See: Osborn, H. (2006) Stern report: key points, The Guardian, retrieved from https://www.theguardian.com/politics/2006/oct/30/economy.uk [accessed on 16 December 2019] and Benjamin, A. (2007) Stern: climate change a ‘market failure’, The Guardian, retrieved from https://www.theguardian.com/environment/2007/nov/29/climatechange.carbonemissions [accessed on 16 December 2019].

196 country (continuous transition process, political instability, high brain drain, etc.) planning only three years for reforming a set of key institutions was too optimistic. All CIB institutions started their reforms later than expected. As a result, many CIB projects were implemented only after 2014. Another criterion is the amount of financial resources provided by the EU for this programme. For an efficient institution-building reform, more resources and efforts seem necessary from both the EU and the Moldavian Government. The EU should be more precise concerning the suggested reforms and focus more on building up reforms of public administration and civil services from bottom-up locally, regionally and nationally. On the positive side however, Moldova is the only country where all state institutions (not just CIB institutions) prepared their SDP in order to make reforms for improving their activities. Regarding equity, the distribution of CIB institutions were not uniform. For cluster 3, seven institutions were selected. It would have been more equitable to focus on three main institutions (as in the case of Georgia) than to try to reform seven. For instance, it seems that the Ministry of Economy, Ministry of Agriculture and Food Industry and Sanitary Veterinary and Animal Origin Food Safety Agency were the most suitable institutions to be part of this cluster. The remaining institutions had common CIB projects that focused more on the approximation of national legislation that would have been carried out anyway. Concerning the fair distribution of salary for civil servants is not uniform as well. The salary of civil servants within public institutions is low. In the result there is a permanent turnover of staff and high brain drain. In terms of equity effects of CIB reforms on the broader population, unfortunately there is not sufficient data available. This question should be better documented in future similar programs.

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Chapter 5 Comprehensive Institution Building programme in Georgia

This chapter follows the structure of the previous one, as it analyses and evaluates the CIB activities in Georgia and assesses the main preliminary results. The chapter starts with a presentation of general country context focusing on political aspects and examines the changes that came with the implementation of the ENP and EaP. It describes the implementation of the CIB through the EU Annual Action Programme (AAP) 2011-2013 in Georgia and through the main three clusters that were identified under the CIB Framework Document. The chapter offers a detailed analysis of the CIB activities achieved by Georgian CIB institutions in order to have a general overview of all CIB reforms. In the last part of the chapter, preliminary CIB results for Georgian institutions are presented. The chapter ends with a short conclusion.

5.1 Georgia – country context

After the collapse of the Soviet Union, Georgia, like other former Soviet countries, started to build the ground of democracy in the country. In June 1990, the Georgian government created a legal mechanism for re-establish the independence of the state, and one year later on 31 March 1991, a national referendum was held in Georgia regarding the sovereignty of the country. Following the independence vote, Georgia declared independence on 9 April 1991. After a Constitutional amendment adopted on 14 April, Zviad Gamsakhurdia was elected as president by the people in May 1991 (Nakashidze 2016: 120). Gamsakhurdia was a prominent human rights activist. His political agenda was based on reinforcing Georgian culture and identity that led often to the rising concern among Georgia’s ethnic minorities (Simao 2018: 217). The transition from the Soviet Republic to an independent state can be compared to that of Moldova. The main objective of the newly independent Georgia was to establish statehood and become democratic in the manner of the Western World. Yet, the political institutions in Georgia faced many issues. The political, societal and ethnic actors, which were against Communist rule, were divided in their view regarding democratisation of Georgia, especially they did not want to accept Gamsakhurdia as legitimate leader (Gegeshidze 2011: 27).

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As one of the leaders who wanted to drive his country out of Soviet influence, Gamsakhurdia had a long history of fighting against sovietisation of Georgia. He followed a way of maintaining a strong ‘anti-Russian stance’ which led to ‘renounce participation in the Russian-led Commonwealth of Independent States’ (CIS), a regional grouping of former Soviet republic (Simao 2018: 217; Dominioni 2014: 8). The main goal of Gamsakhurdia was to create a unitary state where the Georgian ethnic group would be dominant. However, this attitude led to increasing of protests from several minorities on Georgian territories such as the South Ossetians and Abkhazians that were afraid that ‘their autonomy would be infringed’ (Hille 2010: 225-226). Despite the strong tenets of his vision about the role of Georgia on both regional and international level, the Western power did not offer support to a newly independent country. Some of the factors might be that Western power and the USA considered the Gamsakhurdia’s anti-Russian rhetoric quite dangerous. Furthermore, lack of strong knowledge of economics and the ‘expressed hostility towards capitalism’ contributed as well to some resistance from the West to support new regime in Georgia (Simao 2018: 217). As a consequence, Gamsakhurdia failed to consolidate his power. One year later, he was overthrown by opposition militias and replaced by the former Georgian Communist Party head and Soviet Foreign Minister Eduard Shevardnadze. Some features of democratic transition begun with Shevardnadze’s leadership. For instance, aggressive rhetoric against ethnic minorities was diminished. Tolerance in the political discourse increased and independent media became widespread (Gegeshidze 2011: 28). Shevardnadze’s regime was considered ‘liberal autocracy’ or ‘liberal oligarchy’ because some fundamental freedoms that characterise these kinds of regimes were present such as freedom of expression and freedom of association, even if the regime’s overall authoritarian tendencies continued (Kandelaki and Meladze 2007: 102). Throughout 1990s, Georgia oscillated between ‘appeasing Russian pressure and developing a Euro-Atlantic direction’ (Simao 2018: 218). However, at the second half of 1990s, pro-western ideologies became more widespread in the political discourse of Georgian leaders. Bilateral cooperation with NATO started, and Georgia joined the Partnership for Peace. Another perspective developed by Shevernadze regarding Georgia’s foreign policy was ‘the commitment to the development of a new Silk Road, an Eurasian energy and transport corridor, and military training by the USA to address Georgia’s hard and soft

199 security threats’ (Simao 2018: 217-218; Kakachia and Minesashvili 2015: 174). In 1993, Georgia joined the CIS and in 1995 it signed a Georgian Russian friendship treaty which allowed for the opening of four Russian military bases in Georgia. As result, Moscow reinforced the role of the CIS as an institution and promoted the integration in the space of the former Soviet Union. These actions were, according to Shevardnadze, a result of necessity more than of ‘a clear pro-Russian choice in Georgia’s foreign policy’ (Simao 2018: 218-220). During 1992-1994, Georgia was marked by two secessionist wars with South Ossetia and Abkhazia. Russia was involved in both conflicts. Both regions are situated on the border with Federation. In South Ossetia, the violent conflict took place in 1992 and resulted in the loss of approximately one thousand lives. In terms of lives lost, the war in South Ossetia was one of the less bloody post-Soviets conflicts, according to Thomas de Wall (2010: 139-140). Yet, it was the worst internal conflict in the Soviet Union since the 1920s and devastating for such a small region with a population less than one hundred thousand people (de Wall 2010:149). It ended with a ceasefire agreement that was signed on July 14th, 1992. Furthermore, the struggle led to the creation of a trilateral peacekeeping operation with Russia, Georgia and Ossetia troops (Popescu 2009: 167). In Abkhazia, the warfare ended with the loss of more than ten thousand lives between September 1992 and September 1993 and was one of the ‘bloodiest and atrocious in post-Soviet history’. The Abkhazian conflict was more complex than South Ossetian one (De Wall 2010: 147; Coene 2009: 165). The Abkhaz, after the winning military confrontation, expelled both Georgian troops and the ethnic Georgian population from the Abkhaz region (Popescu 2009: 167; Popescu 2011: 116). Russia and the UN were the main mediators during the war. The US, France, Germany and the UK were involved after the peace settlement of 1993 (Coene 2009: 168). In April 1994, the Declaration on Measures for a Political Settlement of the Georgian-Abkhazian Conflict was signed. This agreement provides a legal base to allow around 1700 Russian peacekeepers together with the UN observer mission (UNOMIG) to monitor the agreement, was signed (German 2006: 7; Coene 2009: 168). In 1995, a new Constitution was adopted which was considered a significant step in the democratisation process of Georgia. In November, of the same year, Shevardnadze and his Citizens’ Union of Georgia (CUG) party won presidential and parliamentary elections (Dominioni 2014: 11-12). After 1995, Georgia saw an important advancement of legal and institutional reforms. Many laws such as civil code, civil proceedings code, criminal

200 proceedings code, tax code, general administrative code, entered into force. They were part of democratic reforms and brought Georgia closer to European standards. Shevardnadze’s leadership was seen as a success story of post-soviet democratization by Western observers (Kandelaki and Meladze 2007: 102; Gegeshidze 2011: 30). Despite the positive features that were characterised in the Shevardnadze’s era the country confronted still with poverty and endemic corruption (De Wall 2011: 5). In April 1996, the PCA with the European Community (EC) which entered into force in and Georgia was signed. One year later, in 1997, an Interim Agreement that covers trade and economic provisions of the PCA came into force. The Government of Georgia (GoG) had shown interest in developing its relations with the EC to an extent that, few political dialogue meetings took place in a short period of time. In December 1998, the EC-Georgia Joint Committee took place. During that time, Georgia demonstrated that its foreign policy priority is Europe. The Georgian Parliament started the harmonisation of national legislation with the EC. For the Western side, Georgia is considered significant for the EU as an energy transit country and as a bridge for trade, as well as an influential force in the regional cooperation (COM 1999: 18). The entry into force of the PCA in July 1999 and the adherence to the Council of Europe in the same year showed Georgia’s initial steps to integrate the set of Western institutions dealing with stability, security and prosperity in Europe. This process was significant for Georgia because helped ‘reinforce Western view of Georgia as a European state’ (Simao 2018: 220). The PCA established the political dialogue and increasing security and stability in the region and promoting the principles of democracy, and the respect and promotion of human rights (PCA Georgia 1999). Once the PCA entered into force, Georgia could access increased EU financial assistance through TACIS programme. Since independence, the EU has offered to Georgia between 1992 – 2000 EUR 301 mln in grants. Table 5.1 presents a summary with total amounts for each EU programme, whereas table 5.2 shows the EU assistance for each year.

Table 5.1 EU assistance in Georgia 1992 - 2000 1992 -2000 Total EUR mln Tacis National Allocations 70 Rehabilitation in conflict zones 12.50 ECHO 80.23 FEOGA food aid 62.55 Food security 46 Exceptional Financial Assistance 19 Exceptional Humanitarian Aid 6

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Aid to mitigate effects of Russian crisis 4 Total 301.28 Source: Country Strategy Paper 2002-2006 Georgia 2001: 11.

Table 5.2 EU allocation in Georgia by year (1992-2000) EU programmes 1992 1993 1994 1995 1996 1997 1998 1999 2000 Total grand Humanitarian aid 11.77 17.81 27.47 10.17 5.80 3.96 3.00 3.25 ECHO FEOGA 41.00 21.55 Exceptional Humanitarian Aid Aid against effects 6.00 of Russia Crisis 4.00 Food security 18.00 16.00 12.00 programme Tacis National 9.00 4.00 4.00 6.00 8.00 8.00 8.00 8.00 15.00 Allocation Rehabilitation in 8,50 1.50 2.50 Conflict Zones Exceptional 10.00 9.00 financial assistance CFSP Assistance to 1.00 Border Guards Total 9.00 21.77 21.81 74.47 57.72 38.30 23.46 38.50 10.01 301.28 Source Country Strategy Paper 2002-2006 Georgia p. 28.

Shevardnadze consolidated a stable hybrid regime and ruled the country from 1995 until 2003. The enthusiasm of democratic reforms was difficult to sustain over a long period of time in the newly independent but still quite poor country. The Russian economic crisis from 1998 affected all former Soviet countries including Georgia. Apart from economic issues, Georgia faced internal political problems especially an increasingly strong opposition led by then Justice Minister Mikheil Saakashvili. When in 2001 Shevardnadze resigned from his CUG party leadership, M. Saakashvili formed his own party, named the United National Movement (UNM) (Freedom House 2012). The parliamentary elections of November 2003, according to OSCE observers, were disorganised and included serious irregularities such as ‘ballot stuffing, multiple voting and destruction of ballot boxes. The secrecy of the vote was not adequately respected’ (OSCE Report 2004:2). The fraudulent elections resulted in mass demonstration the so-called the ‘Rose Revolution’ which forced President Shevardnadze to step down. As a result, the then Speaker of the Parliament Nino Burdzhanadze became the Interim President and announced new elections in January 2004 (OSCE Report 2004: 2-3).

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The wave of popular protests led to the forming of a new political elite and M. Saakashvili winning the presidential elections from January 2004. In March 2004, the Saakashvili’s National Movement party won also more than two-thirds of the mandates in parliamentary elections. With the new leadership, Georgia intensified structural reforms such as the liberalisation of the economy, attracting foreign investment, improved revenue collection, fight against corruption, ameliorating the administrative capacities, reduction of crime, uninterrupted energy supply, and rebuilding of roads and other infrastructure. The new government intended to regain control over Abkhazia and South Ossetia, showed interest to NATO and EU membership, and attempted to re-establish relations with Russia (Gegeshidze 201: 32-33). After the ‘Rose Revolution’, the EU and the US established significant cooperation with Georgia. For instance, the EU launched an European Security and Defence Policy mission and deployed the Commission’s Rapid Reaction mechanism to support the post- revolution democratic process. The Commission developed a strong cooperation with other stakeholders such as the UN and OCSE and provided financial assistance through EU projects aimed to increase and improve confidence-building and economic development in Georgia (Ghazaryan 2010: 227). The launch of the ENP in 2004 which encompassed the countries of the Southern Caucasus, led Georgia to the next step with the EU. As Moldova, Georgia prepared its Country Report and Action Plan. The EU – Georgia Action Plan covered very similar priorities areas as it was the case in Moldova and other ENP countries: - strengthening democratic institutions, - respect for human rights, - economic development, - creation of friendly environment for investment administrative practices. Relations between Georgia and Russia were neve ‘really cordial’ after 1991 (Coene 2009: 154). However, the deterioration of relations between Russia and Georgia has started in 2008. During the NATO Summit in Bucharest in April 2008, Georgia and Ukraine asked for upgrading of their relations with NATO from ‘intensified dialogue to a Membership Action Plan’ (MAP) (The Economist, April 3rd 2008). Russia did not appreciate the Georgian desire. The five days’ war between Georgia and Russia worsened more relations between both countries69. After five days of fighting, Russia stopped the military

69 There is an intensive politicised debate regarding who start the war. See more: Coene, F. (2009) ‘The August 2008 war’ in F. Coene, The Caucasus: An introduction, Routledge, pp. 154-163.; Waal de, T. (2019)

203 intervention in Georgia through a ceasefire negotiated by the EU. Thus, Russia recognised the independence of Abkhazia and South Ossetia and maintained its military troops on these territories (Popescu 2011: 119). The diplomatic intervention of President Sarkozy and over EU leaders in the Georgian - Russian war has shown the importance of the Southern Caucasus for the EU (Ghazaryan 2010: 229-230). On August 12th (2008) Saakashvili announced his intention that Georgia withdraws from the group of the CIS countries. One year later (2009), the official procedure was technically completed, so that Georgia became the first country from the former Soviet states to withdraw from the CIS, as a consequence of the Russia-Georgia war (Euroactiv August 19th 2009). The EU through its ENP programmes supported Georgia’s reforms such as rule of law, respecting fundamental rights and economic development. In 2008 and 2009 additional resources over EUR 100 mln were distributed through two ‘special measures’ to help government assisted the large population of ‘internal displaced people’ resulting from the Russia-Georgia war. There were mobilised specific resources for ‘confidence-building measures’ in the regions of Abkhazia and South Ossetia (COM 2014: 45). The Georgian war of 2008 demonstrated that one of the main weakness of the ENP was its missing security pillar as it became evident also later in the conflict between Russia and Ukraine, another ENP country. Yet, the Russia-Georgia war has changed the EU paradigm regarding eastern ENP countries as well as the western approach towards Russia as an important regional actor. In this respect, a Swedish-Polish initiative culminated with the creation of EaP (see more details about the ENP and EaP reforms in chapter II). During 2003 – 2013 the UNM and its leader Saakashvili had a majority in the Georgian Parliament. Few parliamentary seats were taken by opposition representatives, as opposition parties had limited public support. One of the most pressing problems in the country namely corruption was reduced through the reforming of the police, introducing traffic police, education reform and tackling bribery. As a result, in 2012, Georgia ranked 51st out of 174 countries worldwide in terms of corruption and as the least corrupt country in the region (Gigitashvili and Steenland 2018). In 2011-2013, new significant political events took place in Georgia. In 2011, Bidzina Ivanishvili a businessman oligarch without political past appeared on the Georgian

‘Georgia’s August War’ in T. de Waal, The Caucasus: An introduction, Oxford University Press, pp. 211- 224.; Cheterian, V. (2010) ‘The August 2008 war in Georgia: from ethnic conflict to border wars’ in G. Ablaze (ed.) War and revolutions in the Caucasus, Routledge, pp. 63-78; Hamilton, R.E. (2018) August 2008 and everything after: A ten year retrospective on the Russia-Georgia War, Black Sea Strategy Paper, Foreign Policy Research Institute, retrieved from https://www.fpri.org/wp-content/uploads/2018/10/final-bssp-1- hamilton.pdf [accessed on 15 December 2019].

204 political scene and formed the ‘Georgian Dream’ party. Following the elections from 2012, the Ivanishvili’s political dream came true. Saakashvili, who had once Ivanishvili’s support, was forced out of power and from the country (The Economist, 2019 July 6th- 12th). Ivanishvili became Prime Minister and the Saakashvili’s UNM passed into opposition. In October 2013, Giorgi Margvelashvili, the ‘Georgian Dream’ candidate, won presidential elections. However, Ivanishvili, in one of his public addresses, pointed out that after the removal of the UNM from the governance, he would be not interested to remain in political arena. Thus, Ivanishvili was replaced by his ‘hand-picked successor’ Irakli Garibashvili (Markozashvili 2014: 189). One of the significant consequences of the 2012 – 2013 elections (parliamentary elections in 2012 and presidential elections in 2013) was the introduction of constitutional amendments which transferred key prerogatives from the president to the prime minister and as a result, it transformed the country into parliamentary democracy. Ivanishvili worked on normalising relations with Russia as compared to the ‘frozen relation’ between Russia and Georgia during Saakashvili’s time. During the parliamentary elections of 2016, ‘Georgian Dream’ ran without coalition partners and won 114 out of 150 seats so that a ‘super-majority’ took shape in the Parliament (Freedom House 2017). In November 2018, the second round of presidential elections resulted in Salomi Zurabishvili who becoming the first woman President in Georgia. She run as independent candidate but had been supported by ‘Georgian Dream’ and had 59% of the vote against her counter-candidate Grigol Vasadze, of the opposition UNM, who scored 40% (BBC November 2018). While Ivanishvili publicly reaffirmed the aspiration of Georgia to the European- Atlantic bloc, his action showed ‘a tilt back to Russia’. For instance, he tried to undermine a plan to build a deepwater port at Anaklia, on Georgia’s Black Sea coast, a strategic project supported by the USA and the EU. As a result, Russia reopened its market to Georgian produces. This ‘rapprochement’ with Russia, however, was halted when in June 2019, Sergei Gavrilov a Communist member of Russia’s Parliament close to the Kremlin took the speaker seat in the Georgian Parliament, and thousands of Georgian citizens went out to protest in the street (The Economist 2019). Whereas the protests erupted around the Gavrilov’s speech, the main reason for political anger was the impression that the government is run from behind the scenes by Ivanishvili. The demonstration’s discontent was fed by the rise of anti-liberalism, the lack of independent judiciary, and increasing of corruption and nepotism. The consequences of

205 this situation are on the one hand that the government offered concessions such as changing the electoral rule to the disadvantage of the ‘Georgian Dream’. On the other hand, Vladimir Putin, the President of Russia, hit back using the pretext of the necessity to protect Russian tourists in Georgia, he banned direct flights to the country and reinstalled an informal embargo on Georgian wine (The Economist 2019). An evaluation of transition process in Georgia is necessary to see how far advanced is the country in this respect as in the case of Moldova (see sub-chapter 4.1). In the following, the relevant index values and a short chronological country context is also presented for the case of Georgia. The sources for evaluation are, as it was mentioned for Moldova, Freedom in the World Index, the EUI Democracy Index, the Heritage Economic Freedom and BTI Transformation Index.

Figure 5.1 Freedom in the World: Georgia 1999-2018 Freedom in the world: Georgia 1999-2018

Freedom rating Civil liberties Political rights

4 4 4 4 4 4 4 4 3 4 4 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 3.5 3 3 3.5 3.5 3 3 3 3 3 3

Source: designed by author based on the data from Freedom House reports 1999-2018.

Figure 5.1 presents data according to the Freedom in the World reports from 1999 until 2018. In this time, Georgia’s political rights rating changed from 3 to 4. In the last years, from 2013 until 2018, Georgia had a ranking of 3, meaning that its overall status is considered as ‘partially free’. According to the 2018 Freedom in the World report, Georgia holds regular and pluralistic elections, and its democratic trajectory has seen significant improvements in recent years. However, according to the report, oligarchic actors hold outsized influence over policy and political choices, and judicial independence continues to be stymied by executive and legislative interests. Thus, Georgia’s aggregate score is 64/100 (where 0 means least free and 100 most free). The EUI Democracy Index rates Georgia in the ‘hybrid regime’ category. Figure 5.2 shows that from 2013 to 2017 Georgia oscillated between scores 5.95 and 5.93, the

206 highest score that Georgia achieved during these years. Yet in 2018, Georgia’s position score changed more abruptly, to 5.50 points.

Figure 5.2 EUI Democracy index in Georgia 2006-2019

7 6 5.95 5.82 5.88 5.93 5.93 5.53 5.5 5 4.9 4.62 4.59 4.74 4 3 2 1 0 2006 2008 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: designed by the author based on data from EUI Democracy Index 2006-2019.

According to the Economic Freedom Index of the Heritage Foundation, in 2019 the Georgian’s economic freedom score was 75.9. In 2019, Georgia was the 16th freest country in the world and 8th among 44 countries in the Europe region. As a result, Georgia is considered to be ‘mostly free’ (EFI 2019). Figure 5.3 presents the evolution of economic freedom in Georgia from 1999 to 2019 according to this index.

Figure 5.3 The economic freedom in Georgia (1999-2019) Georgia 100

80 76 76.2 70.4 70.4 72.2 72.6 73 72.6 75.9 64.5 69.3 69.2 69.8 69.4 60 58.3 58.6 58.9 52.5 56.7 57.1 40 20 0

Source: designed by the author based on information collected from the Heritage Economic Freedom.

Georgia has witnessed a different way of development of economic freedom than Moldova. The fall of the Soviet Union in 1991 had left the newly independent countries on a similar level. However, after the Rose Revolution in Georgia, the country achieved an

207 increase of economic freedom in almost all aspects analysed and monitored by the Heritage Foundation. In 2016 the overall score of the Georgian economy was 72.6% free, which meant that Georgia fell under the category ‘mostly free’, which also included the Baltic States, the United States and most of the developed countries (Index of Economic Freedom 2016). Furthermore, Georgia is ahead of all of its neighbours and the majority of post-Soviet countries in almost all components, and is also ahead of the Eastern European countries regarding its overall result (IDFI 2016). After the “Rose Revolution,” (2003) the reforms, which were implemented, have reduced corruption, cut regulation, simplified taxes, opened markets, and developed transport and energy infrastructure. Thereby the Government attracted foreign investment and stimulated economic growth. Furthermore, the maintenance of monetary stability and overall sound fiscal health has strengthened macroeconomic resilience. Nonetheless, according to the Heritage Foundations, it needs deeper and more rapid institutional reforms to enhance judicial independence (Index of Economic Freedom 2018). Georgia has improved its global ranking that assesses the country’s transformation towards democracy, market economy and quality of governance (BTI 2018). Table 5.3 shows the general ranking for all three areas (democracy, economy and governance) from 2006 to 2018.

Table 5.3 Economic and political transformation in Georgia 2006-2018 2006 2008 2010 2012 2014 2016 2018 Status 5.73 6.60 6.05 5.88 6.16 6.31 6.42 index limited limited limited limited limited limited limited Democracy 6.10 6.85 6.05 6.15 6.50 6.70 6.80 status defective defective defective defective defective defective defective democracy democracy democracy democracy democracy democracy democracy Rule of law 6.5 6.0 5.5 6.0 6.0 6.5 6.5 Stability of 7.0 8.0 6.5 6.5 7.0 7.0 7.5 democratic institutions Market 5.36 6.36 6.0 5.61 5.82 5.93 6.04 economy functional functional functional functional functional functional functional status flaws flaws flaws flaws flaws flaws flaws Private 5.0 7.5 7.0 7.0 6.5 6.5 6.5 property Welfare 4.0 4.5 4.0 4.0 4.5 5.5 5.5 regime Governance 5.90 6.36 5.68 5.38 5.76 5.72 5.87 Index good good good moderate good good good status Governance 6.50 7.05 6.23 5.98 6.43 6.47 6.65 performance

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Resource 5.7 7.0 6.7 6.0 6.0 6.7 6.7 efficiency Consensus 6.7 6.2 5.6 5.6 6.4 6.2 6.6 building Source: designed by the author based on data from BTI 2006-2018.

According to 2018 data, Georgia had a 6.8 score on its democracy index. From 2006 to 2018 the score was 6.10 – 6.80, which qualified the country as ‘defective democracy’. Regarding its market economy status, Georgia is ranked as ‘functional flaws’. The lowest score has been achieved in 2016 with 5.36. From 2014 the score has slightly increased from 5.82 to 6.04 in 2018. The governance quality in Georgia is qualified as ‘good’. The lowest score was 5.38 in 2012. Finally in 2018, Georgia scored 5.87 on the governance aspect. This country context overview presented the Georgia’s path towards the EU. In this context, as in the case of Moldova, the CIB programme planned and implemented by the EU and Georgia from around 2011 to 2018/2020 (with financing from EU budget years 2011-2013 and from 2014 with additional financial assistance for DCFTA reforms) was intended to reform institutional framework in Georgia in view of structural reforms and European integration.

5.2 Comprehensive Institution Building in the ENPI Annual Action Programmes 2011-2013

Georgia started the negotiations on the AA including DCFTA in 2010 into same year as Moldova. One aspect that should be highlighted is that Georgia had liberalised a large part of its trade with the entire world before the AA negotiations, and as a result ‘the Georgian DCFTA includes almost no exceptions with regard to tariff-dismantling of trade in goods’ (Emerson 2015:1). The implementation especially of the AA requires considerable and strong institutions that should be able to be involved in this process. The CIB Programme has played an important role in preparing a set of key institutions with a significant role in the process of negotiation and implementation of the EU agreements such as AA including DCFTA, Visa Liberalisation and Readmission Agreements and the objectives that are set out in the EU-Georgia ENP Action Plan. As laid out in the previous chapter, the role of the CIB is to strengthen the state institutions that are involved in the preparation and the implementation of the EU agreements mentioned above. The CIB Framework Document 2011-2013 entered into force in October 2010 once the

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Memorandum of Understanding between the Georgian Government and the European Commission was signed (COM 2011c AAP: 22). The main goal of the CIB in Georgia is to ensure effective institutions building. The criteria in the process of selection of institutions in Georgia were: - importance of the functional area of the institutions in the process of negotiation and implementation of the EU Agreements; - policy priority accorded to the area of cooperation; - interest and commitment and reform credentials of the institutions (willingness to reform, resources to be provided in terms of funds, staff, office, leadership); - necessity to upgrade the institution (Framework Document Georgia 2010:1). The Framework Document outlined three clusters responsible for the coordination and implementation of reforms through different projects, Twinning, EU technical assistance and so forth on an institutional level. The three CIB clusters were focused on the following reforms:  reform coordination and preparation for negotiations of new enhanced agreements with the EU;  reform challenges in the area of democratic reforms, human rights and good governance;  reform challenges in trade-related areas, market and regulatory reform DCFTA.

Cluster 1 Reform coordination and preparation for negotiations of new enhanced agreements with the EU Cluster 1 required preparation of a set of institutions for negotiations and coordination purposes. The institutions that were identified under this cluster are:  Prime Minister’s Office,  Ministry of Foreign Affairs,  Office of the State Minister of European and Euro-Atlantic Integration,  The Civil Registry Agency of the Ministry of Justice. The Ministry of Foreign Affairs and the Prime Minister’s Office were identified as the coordinators of the CIB Program because of the key role in the country and their negotiations role towards the EU (Framework Document Georgia 2010: 5). All key CIB institutions under this cluster worked on their strategic planning of the regulatory approximation process, coordination of policymaking processes, implementation of the

210 agreements, monitoring and reporting of the entire process from start to finish, as well as internal and external communication (Framework Document Georgia 2010: 5).

Cluster 2 Reform challenges in the area of democratic reforms, human rights and good governance All EU agreements such as the PCA, EU Georgia Action Plan and ENP Action Plan that have been concluded between the EU and Georgia cover the principles of democratic values and respect for human rights and fundamental rights. The AA between the EU and Georgia foresees for future reforms regarding rule of law, democratisation and respect of human rights. While many efforts from the Georgian institutions have already been made regarding democratic reforms and good governance, the consolidation and implementation of these reforms still had to be strengthened (Framework Document Georgia 2010: 3). In cluster 2, the following institutions have been selected:  Public Defender's Office,  Chamber of Control,  Georgian Parliament. These CIB key institutions are significant in the process of rebuilding institutions as the ‘strengthening of the oversight institutions and their effective functioning would be the key to the consolidation of democratic reforms’ (Framework Document Georgia 2010: 4).

Cluster 3 Reform challenges in trade-related areas, market and regulatory reform DCFTA For Georgia, the process of implementation of the DCFTA is quite different from that of Moldova. According to the Framework Document in Georgia, the DCFTA requires the following reforms (i) the partner country must be member of WTO, (ii) the demonstration of economic progress for an FTA, (iii) the partner country may be able to show an high interest of a deep and comprehensive FTA, (iv) the partner country should be able to have capacity to negotiate, implement and sustain the effect of this kind of FTA (Framework Document Georgia 2010). The first three reforms were fulfilled by Georgia at the time of initiating of the CIB Programme. Under the third CIB cluster, was necessary to apply and implement the last outstanding reforms and identification of the responsible institutions as well. In this sense, Georgia could base itself on ‘key recommendations’ provided by the European

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Commission in 2009 and technical support projects (Framework Document Georgia 2010:2). The key CIB institutions that were identified under Cluster 3 are the following:  National Service for Food Safety, Veterinary and Plant Protection,  The Georgian Accreditation Centre,  The National Agency for Standards, Technical Regulations and Metrology. The implementation of the CIB in Georgia was financed under the ENPI AAP 2011-2013. For CIB, the total amount was EUR 30.86 million. The Georgia National Indicative Programme (NIP) specified that additional financial resources may be added to strengthen the CIB institutions if it is necessary (COM 2010b: 26). Table 5.4 shows that for the financial year 2011 EUR 9,73 million were allocated and for 2012 it was EUR 20 million. Most activities under the CIB programme started after 2012 so that, the financial year budget under AAP 2013 was signed with a small delay and were envisaged EUR 19 million (COM 2014: 30). In May 2014, Prime Minister of Georgia Irakli Garibashvili and the European Commission President Jose Manuel Barosso signed a ‘Financing Agreement’ regarding the EU assistance for CIB, for an amount of 19 million euro. This Agreement is mainly directed to the continuation of the CIB Programme within ENI. This package is for 2014 – 2020 and is connected with the implementation of DCFTA (EC 2014 Press Release).

Table 5.4 The CIB allocation in Georgia 2011-2013 CIB financial allocations NAAP 2011 – EUR 9.73 million for Georgia in 2011 - 2013 NAAP 2012 – EUR 20 million NAAP 2013 – EUR 19 million

TOTAL CIB Georgia EUR 48.73 million Source: designed by the author on the basis of COM 2011c AAP; COM 2012a AAP; COM 2013a AAP.

The following tables 5.5; 5.6 and 5.7 present the breakdown budget for each year as well as specific components.

Table 5.5 Georgia AAP for CIB 2011 Components Project/activities CIB funds Component 1 (CIB EUR 0.45 programme/ Co- million NAAP Georgia 2011 ordinator support and IRP preparation) Component 2 (CIB EUR 5.5 Programme/ IRP Million implementation)

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Component 3 (Twinning, EUR 3.78 TA for the EU-Georgia million AP implementation Total CIB Georgia EUR 9.73 million 2011 Source: designed by the author based on COM 2011c AAP.

Table 5.6 Georgia AAP for CIB 2012 Components Project/activities CIB funds Component 1 EUR 11 million Implementation of NAAP Georgia 2012 activities related to the new enhanced document (CIB) Component 2 EUR 6 million Implementation of activities related to priorities set out in the ENP Action Plan Component 3 EUR 3 million Implementation support AAP 2012, including evaluation and audit Total CIB Georgia EUR 20 million 2012 Source: designed by the author based on COM 2012a AAP.

Table 5.7 Georgia AAP for CIB 2013 Components / Modules Project/activities CIB funds Component 1 Twinning Call for 6.20 million Strengthened capacity of proposals NAAP Georgia 2013 CIB institutions to implement provisions of the new agreements

Direct grants 6.50 million Procurement 4.85 million Evaluation and audit 0.20 million Communication and 0.25 million visibility Joint management with 1.00 million UNDP Total CIB Georgia EUR 19 million 2013 Source: design by the author based on COM 2013a AAP.

Table 5.8 shows the CIB institutions distributed for each CIB cluster. There are ten core CIB institutions that are significant for the preparation and implementation of the EU agreements and other significant reforms that are required by the EU.

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Table 5.8 CIB institutions in Georgia CIB institutions Clusters 1 Office of the State Minister of European and Euro-Atlantic The co-ordination cluster (1) Integration 2 Prime Minister’s Office 3 Minister of Foreign Affairs 4 Civil Registry Agency of the Ministry of Justice 5 Public Defender’s Office The oversight cluster (2) 6 Chamber of Control 7 Georgian Parliament 8 National Service for Food Safety, Veterinary and Plant The trade cluster/DCFTA ( 3) Protection 9 Georgian Accreditation Centre 10 National Agency for Standards, Technical Regulations and Metrology Source: designed by the author on the basis of FD Georgia 2010.

As presented in chapter 3.3, the core CIB institutions had to prepare the Institutional Reform Plan (IRP) with the assistance of the EU. The IRP was considered a ‘master plan’ for beneficiary institutions and a framework for the EU’s and other international donors’ assistance (Framework Document Georgia 2010: 23). All CIB institutions in Georgia prepared their IRPs and outlined the reforms that should be implemented so that their institutional capacity building would be improved and they would be able to implement the EU agreements in practice.

5.2.1 Cluster 1 Coordination and preparation of new enhanced agreements with the EU

In this subchapter, the main activities and projects implemented by institutions from cluster 1 under the CIB funding are analysed. The Office of the State Minister on European and Euro-Atlantic Integration (OSMEEAI) was nominated by the Prime Minister’s Office to be the national coordinator of the CIB programme. In fact, all CIB institutions from cluster 1 have played a leading role in the process of institutional building (Framework Document Georgia 2010: 5). As the EU and Georgia have moved forward to strengthen their relations through the next step namely the AA including DCFTA, the negotiation directives of these agreements were adopted by the EU in May 2010 (COM 2010h: 2). Therefore, cluster 1 was chosen as coordination cluster with the main role for negotiation, developing and implementing the EU agreements and visa facilitation and readmission agreements. The

214 role of the CIB key institutions from the cluster 1 was focused on coordinating the work of government, monitoring activities and progress towards the main objectives stipulated in the AA/DCFTA (Sekarev 2016: 5). The OSMEEAI has been the main institution involved in the developing, implementing and monitoring of the European and Euro-Atlantic integration policy of Georgia (Framework Document Georgia 2010: 5). The European Integration Coordination Unit within the OSMEEAI has coordinated the implementation of ENP Action Plan, develops and implements reforms and programmes within the EaP Multilateral Format and Mobility Partnership, participates in the process of negotiations and implementation of the AA, and supports the functioning of the Expert Council on European Integration issues (Framework Document Georgia 2010:5). The Unit also coordinates EU funded programmes and projects addressing the capacity building of the Government institutions such as Twinning, TAIEX and Sigma. The role of the Unit is to provide assistance regarding guidelines, rules and procedures for the access to EU programmes and support in drafting project proposals (Framework Document Georgia 2010: 5). The Prime Minister’s Office provides organisational support through the preparation of analytical, informative materials and supervises the Government decisions. The DCFTA Task Force is located within the Prime Minister’s Office and is involved in the process of negotiation and implementation of the DCFTA. The Task Force ensures political coordination of the implementation of DCFTA in practice and provides technical coordination of the DCFTA in the preparation process (Framework Document Georgia 2010:6). The Ministry of Foreign Affairs is responsible for Georgia’s foreign policy towards the European integration and conducts political dialogue with the EU and Member States in bilateral and multilateral formats. The institution leads the negotiations with the EU regarding the AA and coordinates the process for the adoption of the text of the AA including DCFTA (Framework Document Georgia 2010: 6). The Civil Registry Agency of the Ministry of Justice (CRA) operates under ‘the umbrella of the Ministry of Justice’. It is important to establish a civil registration system because it is necessary to keep track of basic data about citizens. CRA is a key institution in the process for the enhancement of EU-Georgia relations especially regarding the implementation of the EU-Georgia visa facilitation and readmission agreements and regarding mobility and migration (Framework Document Georgia 2010: 6).

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These CIB institutions, described above, have had to increase capacity building activities, to prepare adequate staff and develop necessary equipment and resources for the implementation in practice EU agreements. In Box 5.1 main reforms under Cluster 1 are presented.

Box 5.1 CIB Reforms in Georgia under Cluster 1 - strategic planning of the regulatory approximation process; - coordination of the overall policy making process related to the preparations for negotiations; - facilitation of institutional and structural changes, if necessary, to ensure effective preparations for negotiations, negotiations as such and implementation of the Association Agreement, including the DCFTA; - monitoring of and reporting on the preparatory, negotiating and implementing processes; - internal and external communication. Source: Framework Document Georgia 2010: 7.

Table 5.9 presents the main actions for decisional CIB institutions that should be taken for the implementation of the AA and DCFTA.

Table 5.9 CIB institutions and the AA/DCFTA responsibilities No. Responsible institutions Actions 1 The Office of the State Develop, coordinate and monitor a unified policy for implementation of Ministry of Georgia for the Georgia-EU Association Agreement. European and Euro-Atlantic Prepare a National Action Plan for implementation of the AA in close Integration cooperation with the line-Ministries. Coordinate assistance programs of the EU and EU Member States that support implementation of the AA. Strengthen coordination with the Parliament of Georgia to approximate the legislation of Georgia with the EU acquis and to effectively implement. Facilitate the engagement of the civil society in the EU integration process. Coordinate the implementation of the DCFTA, as the part of the Association Agreement, with the Ministry of Economy and Sustainable Development of Georgia. 2 The Ministry of Economy Coordinate and monitor implementation of the DCFTA, as the part of and Sustainable the Association Agreement; Development of Georgia Prepare an Annual National Action Plan for Implementation of the DCFTA, as the part of the Annual National Action Plan for Implementation of the Association Agreement. 3 The Ministry of Foreign Conduct political dialogue with the EU, including within the EU- Affairs of Georgia Georgia cooperation institutions and political consultations on priority issues; Coordinate the negotiation process with the EU on drafting and updating the Association Agenda. 4 LEPL Training Centre of Support the development of institutional capacities, within its the Ministry of Foreign responsibilities, for the effective implementation of the Association Affairs of Georgia Agreement. 5 LEPL Legislative Herald of Translate EU legislation related to implementing and follow-up Georgia under the Ministry reporting on the Association Agreement into Georgian and of Justice legislation/draft laws of Georgia into English. 6 Line Ministries Strengthen and increase the capacity of the Units working on European

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integration issues within the Ministry and appoint a person responsible for European integration issues. Develop a section of the Annual National Action Plan for Implementation of the Association Agreement within the responsibilities of the Ministry; Include the priorities of the Association Agreement in the Annual National Action Plan of the Government of Georgia for the Association Agenda. Source: Georgia Governmental Decree 2014.

As mentioned in chapter 3.1, the EU has provided technical assistance for ENP countries through Twinning and TAIEX since 2007 and SIGMA since 2008. However, the use of institutional building tools by the Georgian public institutions was low due to weak administrative capacity, staff turnover and lack of knowledge regarding project proposals writing. Therefore, the OSMEEAI as one of the main CIB coordinator implemented in 2011 a Twinning project ‘Support to the Programme Administration Office (PAO) in application and coordination of institution-building facilities’ with a duration of 24 months. The main aim of this project was to ‘enhance the PAO’s capacities to identify, prepare and implement activities funded by external assistance, primarily to ensure the staff were sufficiently versed in applying Twinning, TAIEX SIGMA and other EU instruments, while building on the foundations of previous projects’ (Twinning project 2011). The OSMEEAI, as program coordinator, was assisted by the Delegation of the EU in Georgia to enhance its capacities for preparation and implementation of the CIB in Georgia. At the end of the project, OSMEEAI was able to transfer its capacities and know-how to other CIB institutions so that they were able (in theory) to work autonomously during the implementation of EU institutional building tools. All four CIB institutions within cluster 1 have played a significant role in the negotiation, development and implementation of EU agreements: the AA, DCFTA, Visa Facilitation and Readmission Agreement and the Visa Liberalisation road map. For strengthening their effectiveness and capacity building, the CIB institutions received technical assistance in preparing their IRPs. The Prime Minister’s Office, Ministry of European and Euro-Atlantic Integration, Ministry of Foreign Affairs have had ‘an in situ experts’ who provided technical assistance to the institutions (COM 2011b AAP: 26). The process of developing the IRPs by CIB institutions from cluster 1 had lasted until 2012. In Cluster 1, the Ministry of Foreign Affairs of Georgia, the Prime Minister’s Office and the OSMEEAI developed a common IRP while the CRA elaborated a separate one.

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The first three institutions elaborated a common IRP because their activities were closely interdependent. Furthermore, these institutions had an important role in the implementation of the European integration reforms and were considered as key institutions in the design and implementation stage (IRP Georgia 2012). In their joint IRP, the OSMEEAI, Ministry of Foreign Affairs and Prime Ministry Office identified four main groups of reform:  Reform 1 Administration – Human Resources  Reform 2 Negotiations  Reform 3 Communications  Reform 4 Translation The human resources issue in all these three institutions is important because it is necessary to create ‘a clearly defined career path for Civil Service professionals […] and to increase the rate of the key staff retention’ (IRP 2012). In order to improve the capacity level of civil servants and to increase their professional motivations seminars, workshops and training from different areas such as Information Technology, Project Cycle Management, Logical Framework development, Communications, PR, Monitoring and evaluation and so forth should be organised for them (IRP 2012: 11). Human resources reform is important because of the human capacity, skills and equipment that are needed for the coordination process and for improving knowledge about EU acquis. The reform on negotiation required for a deep preparation of senior staff that are involved in the negotiation process. A high standard of negotiation skills is key in the AA, DCFTA and Visa Liberalisation negotiations in order to achieve the goals and maximise the opportunities provided by the agreements (IRP 2012: 11-12). Good communication is essential for both effective negotiations and coordination and to inform the Georgian public through an independent press. The process of negotiation and implementation of the AA and DCFTA has required that OSMEEAI, PMO and MFA provide regular monitoring and evaluation reports in the correct format containing the essential information and supported by analysis (IRP 2012:12). And the last, but not least the Georgian reforms on European integration require approximation of law, rules, regulations and procedures. In order to do that, ‘a large scale translation activity’ is necessary. Thus special professional software, technical equipment and training of translators were needed ‘to enable the responsible institutions to perform productively their functions’ (IRP 2012:13).

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Civil Registry Agency The fourth CIB institution from the cluster, is CRA that was created in 2004 through the merger of the Civil Acts Office and the Passport Office. This agency, for years, had a disputable reputation due to perceived inefficiency and high corruption (UNDP 2010: 32). Among the CRA weaknesses aspects70, prior to CIB reforms were the following: - unmotivated and unqualified staff, - corrupt practices, - negative image among public opinion, - lack of budget resources, - technical issues on service provision procedures, - lack of e-connection between regional offices and central one. The reform of the CRA started under the TACIS programme especially regarding institutional capacities and anti-corruption measures. The EU developed a project ‘Capacity Building in Support Rule of Law in Georgia’ with the main goal to strengthen the institutional capacity for better implementation of international obligations of Georgia. Within this project, the concept of biometric system in order to facilitate the process of visa liberalisation was developed. CRA staff has consistently taken part in TAIEX projects in order to improve their knowledge and experience (COM 2015e: 49-50). Once Georgia engaged in institutional reforms the CRA, which it is in direct contact with citizens, was including in CIB because the Georgian Government considered its work more technical, than political (UNDP 2010: 32). The Ministry of Justice with the support of international experts developed a proposal regarding the reform of the CRA to ‘provide the public with a simple ‘one-stop-shop access’ to civil acts registration, identity documentation and passport services and enable the regulated and safe exchange of sensitive information between State institutions in accordance with laws and prescribed procedures’ (UNDP 2010: 32). The reforming of the civil registry system aimed at establishing a system based on ‘One-Stop-Shop principles of public service delivery’. Thus, the reform of this institution has allowed the Georgian government to ‘unify citizens’ database, streamline information

70 The weakest aspects of the CRA were mentioned during the international conference that took place in September in 2011 in Chisinau. See: Gabrielashvili, G. (2011) Turning weaknesses into opportunities: case of the Civil Registry Agency. Public service of the future – Combating Corruption, streamlining performance, Chisinau, retrieved from https://www.slideshare.net/E-Gov_Center_Moldova/civil-registry- agency-giorgi-gabrielashvili-eng-as-of-sept-15-9590426 [accessed on 08 July 2019].

219 flow and to securely share information within state institutions and between administration and citizens’ (Vashakidze 2016: 7-8). The One-stop principle was introduced for the first time by Estonia e-governance and it is based on the principle that the ‘state is not allowed to ask citizens for the same information twice’.71 The reform of the civil registry system focused on the following objectives: - creation of a legal framework; - developing a human resources system; - establishing new services and reforming the existing ones; - developing a new generation biometric database; - integrating new technologies in the reforming process (Vashakidze 2016: 9). In 2011, the CRA started a twinning project within CIB called ‘Introduction of e- Governance System model for Capacity Building in the Local Governance’. Georgia intended to introduce a unique application of the ICT especially in local areas, in order to ‘improve capacity of the local self-government for introduction of e-governance system based on CRA capacities’ (GE/ENPI 2011). Apart from the EU, the CRA has received support from other international institutions. The Swedish International Development and Cooperation Agency have developed a project ‘Promoting the Civil Data Integrity in Georgia’. The project addressed ‘migration data sharing and capturing system improvement and creation of addressing initial software’ (Framework Docuemnt Georgia 2010: 7). The CRA has also participated in EC thematic programme of cooperation with the third countries in the areas of migration and asylum and has developed projects in cooperation with IOM, UNICEF, UNCHCR (Framework Document Georgia 2010: 7). The CRA has played an important role in the implementation of Visa Liberalisation and Readmission Agreement.

5.2.2 Cluster 2 Democratic reforms, human rights and good governance

Institutions in cluster 2 are focused on enhancing monitoring and steering capacities of the approximation process (COM 2012a AAP: 4). All three institutions:

71 See more detail about the ‘one stop shop’ principle Liiv, I. (2016). Welcome to E-Estonia, the tiny nation that’s leading Europa in digital innovation, The Conversation, retrieved from https://theconversation.com/welcome-to-e-estonia-the-tiny-nation-thats-leading-europe-in-digital-innovation- 74446 [accessed on 15 August 2019] and Goldsmith, S. (2019). The problem with one-stop government, retrieved https://www.governing.com/blogs/bfc/col-new-goal-no-stop-shop- government.html?fbclid=IwAR0nnWa3RmoZB9CDGK0gDY8SKlQ6bmQE_Tsm8XJXfkpz20tVuQO6KpP o7rg [accessed on 17 August 2019].

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Public Defender Office, Chamber of Control and Georgian Parliament were selected by the Government to participate in CIB in order to strengthen the process of democracy, respecting human rights and good governance and are known as ‘oversight’ institutions.

Public Defender’s Office The Public Defender’s Office (PDO) is a national human rights institution whose main goal is to ‘oversee the effective observance of human rights and freedom within the territory of Georgia’ (Framework Document Georgia 2010: 8). The reforms that PDO needed to enforce under CIB were: - to strengthen the institutional capacity regarding minority issues, civic education (tolerance, hate speech) and combating all forms of discrimination, - to fortify the regional offices, - to approximate the national legislation according to the EU standards (Framework Document Georgia 2010: 8-9). One of the priorities of the EU with Georgia under ENP has been the area of justice, rule of law and respecting human rights. In 2008, the EU developed and implemented a sector policy programme to improve compliance with international human rights standards to strengthen the capacities of the PDO by improving procedures to investigate closed facilities and trial monitoring (COM 2008a AAP: 6). The project had duration of 38 months and was a preparation stage for the next EU project in Georgia in this sector. The EU provided financial support to PDO under the 2008-2010 Budget Support Programme on Criminal Justice and continued to offer assistance in 2011-2013. However, with the new advanced step in the EU and Georgia bilateral relation regarding the AA, the EU has continued to keep its support to PDO. In 2011, as an ‘oversight institution’ of the CIB, the PDO was prioritised for funding under AAP. The main objective developed under AAP 2011 was to ‘strengthen the rule of law and human rights protection in Georgia by improving the criminal justice sector […] in line with international standards’ (COM 2011c AAP: 6). The PDO developed its IRP for 2012-2015 and was aligned with other relevant public sector reforms especially on rule of law and criminal justice. As CIB institution, PDO intended to strengthen the institutional capacity for more effective protection of Human Rights in accordance with the

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Paris Principles72 (COM 2014d PDO/ENPI: 3). The main areas that were covered in the PDO’s IRP were the following:  strengthening the capacity of the PDO to effectively monitor and supervise of human rights and fundamental freedom particularly at institutions where individuals are held; penitentiary institutions, psychiatric hospitals, childcare institutions, centres for elderly institutions;  strengthening the capacity of the PDO to effectively handle individual complaints particularly related to economic and social rights and rights of vulnerable groups;  strengthening the capacity of the PDO in conducting public awareness and civic education on human rights;  analysis of existing legislation and practice from the standpoint of its compliance with fundamental human rights standards being established under the Georgian Constitution;  strengthening the skills of PDO staff and capacity building of the PDO (COM 2014d PDO/ENPI: 3). In May 2012, a three-year grant contract was signed by the EU Delegation and PDO regarding ‘Combating All Forms of Discrimination in Georgia’ focusing on the following aspects increasing human rights awareness and increasing the role of the PDO’s office to address the human rights issues (COM 2012b). Another project developed by the PDO, as a CIB key institution, in 2014, was ‘Support to the Public Defender’s Office’ with as main objective ‘effective protection of human rights and fundamental freedom in Georgia’. In this respect, the PDO intended to achieve the following reforms: institutional strengthening of the PDO and increasing human rights awareness in general and among state institutions (COM 2014d PDO/ENPI). The EU project had a duration of three years. By the end of 2017, the objectives mentioned above should lead to the following expected results as it is shown in Box 5.2.

Box 5.2 Expected results of the PDO project More effective prevention, monitoring and documentation of human rights violations at closed-type institutions through strengthened capacities of the National Preventive Mechanism. Increased accessibility of the remedies to respond to human rights violations in regions and rural areas through the creation of the regional network of the PDO.

72 The Paris Principles were adopted in 1993 by the UN General Assembly and set out six main criteria that national human rights institutions require to meet: Mandate and competence: a broad mandate, based on universal human rights norms and standards; Autonomy from Government; Independence guaranteed by statute or Constitution; Pluralism; Adequate resources; and Adequate powers of investigation see: Paris Principles, retrieved from https://nhri.ohchr.org/EN/AboutUs/Pages/ParisPrinciples.aspx [accessed on 16 August 2019].

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Strengthened the analytical capacities of the PDO. Strengthened international stance of the PDO. Increased human rights awareness in general and among state institutions. Source: Georgia EU project fiche 2014.

Furthermore, as the EU has recognised the role of the PDO in the protection of human rights and fundamental freedom in Georgia, it was significant that this institution should be reformed and prepared for the implementation of the AA. The role of the CIB programme was to ‘implement structural reforms and support the National Preventive Mechanism under the PDO office to prevent future abuse and ensure the National Preventive Mechanism’s full access for monitoring closed facilities including non-state institution (COM 2014d PDO/ENPI: 4).

Chamber of Control The Chamber of Control of Georgia is an independent institution which conducts external audits in public institutions and state-owned enterprises. However, throughout its activity, the Chamber of Control has had some institutional reformation. In February 2009, a new law entered into force that ‘established the Chamber of Control as a Supreme Audit Institutions which should operate according to EU standards’ (Framework Document Georgia 2010: 9). However, despite the existence of this new legal framework, institutional capacity was still low. Therefore, this was a strong reason to include it in the CIB ‘oversight cluster’. On July 1st 2012, the Supreme Audit Institution of Georgia was re- established as the State Audit Office of Georgia (SAO). In the same year (2012), the SAO implemented an EU CIB Twinning project ‘Institutional Strengthening of the State Audit Office of Georgia’. This project was focused on the ‘improvement of accountability for the use of public funds in the Georgian public administration, strengthening of the management and technical capacity of the State Audit Office and planning and carrying out of audits in line with European Union and international standards and methodologies’ (COM 2012c Twinning fiche: 1-2). The Twinning project was implemented with expertise support from Poland and Germany. From this project, the SAO had the following expectations: - improving the management of public finance, especially budget implementation and internal/external control; - increasing transparency of government expenditure, including public procurement; - improving public trust in the management of public finance;

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- strengthening government capacity to lead and monitor the implementation of a cross-cutting reform agenda in the public sector (COM 2012c Twinning fiche).

Georgian Parliament As described in sub-chapter 5.1, democratic reforms made at the initiative of President Saakashvili in 2008 regarding a shift of power from the executive branch to the legislative branch of the state. In this perspective, the Parliament, as part of ‘oversight institutions’, might be able to use more efficiently the rights of legislative initiatives (Framework Document Georgia 2010: 11). The Georgian Parliament was intended to play a considerable role in the implementation of the AA including DCFTA. From this reason, the Parliament needed to strengthen its professional capacities, especially ‘as concerns its oversight tasks’. Thus, the EU through the CIB programme supported parliamentary staff ‘expertise in terms of legislative drafting and research skills’ through different technical assistance (Framework Document Georgia 2010:11). In Box 5.3, the main reforms that the Georgian Parliament needed to achieve in order to have a good implementation of the EU Agreements it is presented.

Box 5.3 The reforms of the Georgian Parliament under CIB Develop, in cooperation with the Committee on Rules and Procedures, Committee on European Integration and the Legal Committee, efficient procedures and sufficient capacity to monitor legislative initiatives in terms of their compliance with Georgia’s commitments and aspirations concerning Association Agreement, including a DCFTA. Develop skills and procedures for monitoring activities of executive agencies with regards to the development and implementation of the action plans aimed at Georgia’s approximation to the EU standards. Ensure better cooperation with academic research circles, NGOs working in Georgia in the field of ENP implementation and enhance communication with civil society over EU-Georgian relations and EU values (including through an improved website of the Parliament). Set up mechanisms to liaise with EU stakeholders, in order to participate in and get feedback from fora where Georgia’s steps and needs in the field of approximation are discussed. Identify and set up enhanced mechanisms of communication with the society at large in order to engage in dialogue over EU standards and values in the context of EU-Georgia relations. Source: FD Georgia 2010: 11.

In March 2013 the adaptation of the constitutional amendments by the Parliament was a significant step towards the development of an effective system of checks and balances. As the constitutional amendments entered into force in November 2013 after the inauguration of the new president, the importance of the Parliament in Georgia increased (UNDP/EU Project 2014: 2). In this respect, it was necessary to support the institutional capacity of the Parliament to increase its potential within the new distribution of power.

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The main challenges that persisted in the Parliament’s activities were the ‘effectiveness in exercising policy-making, legislative, representative and oversight function’ (UNDP/EU Project 2014: 2). In table 5.10 the main gaps that were identified for each challenge mentioned above are presented:

Table 5.10 The main challenges that persisted in the Parliament activities in Georgia in 2013 Law-making function Oversight function Representative function Organisation of Parliament’s communication - deficiencies in - lack of periodic, - capacity gaps of MP - inadequate structure document flow; consistent public bureau staff; and overlapping - absence of a searchable hearings of government - low public awareness functions within electronic database of officials in the with regard to the Parliament's structures; laws; Parliament; mandate of the - inefficient use of - lack of institutional - inefficient use of the Parliament; communication capacities to conduct examination reports of - limitations for MPs channels; lack of policy planning and the State Audit Office; elected through the qualified staff; evaluation; - shortcomings in the proportional system to - absence of - excessive speed of the regulatory framework; communicate or interact communications strategy legislative process and - lack of access to with their electorate; action plan; associated risks; international best - deficiencies in - absence of the media - deficiencies with practices of Parliament’s reporting centre. legislative initiatives on parliamentary oversight mechanism. the part of the MPs; of governments. - lack of institutional capacities to assess fiscal or economic effects of initiated draft laws; insufficient public engagement into the law-making process.

Source: Compilation by the author based on data from UNDP/EU project 2014 p. 2-3.

Despite the assistance provided by the EU in Georgia, one of significant contribution regarding strengthening democracy and rule of law is given by the United Nations Development Programme (UNDP). In 2010-2011 it was developed a project ‘A strong Parliament in a Consolidated Democracy’ that was focused on four components: budget processes, local government reform, human resources management and international partnership (UNDP/EU 2016: 4). As part of the ‘oversight’ cluster, Parliament had to prepare its multi-annual IRP with key measures to enhance its capacity and carry out reforms foreseen under the AA political agreement including DCFTA. During 2012, the EU Delegation in Tbilisi and the Parliament of Georgia worked together for identification of the main areas in which the EU

225 can offer financial assistance under CIB programme. As a result, in 2014 (as it was mentioned in chapter 5.2 (see p. 210) the EU decided to continue the CIB assistance under ENI) the EU has started a large-scale project under CIB. The project developed by the EU ‘Strengthening the System of Parliamentary Democracy in Georgia’ has a duration of five years. In addition to the EU funding, the project has received consultation support from the UNDP. According to the CIB Guideline described in chapter 3.3, the CIB projects developed by the CIB institutions can receive additional funding from the EU Member States and other international donors. The project was divided into two parts of 2,5 years. The first phase of the project was closed in April 2016. The second phase of the project continues until the end of 2019 (UNDP/EU 2016: 4). The first phase of the project of the parliamentary strengthening was focused on four areas: law-making, setting policy direction, executive oversight and representation. Therefore, to address these gaps, the EU together with the UNDP and Parliament of Georgia implemented the following activities in the first phase of the project: - improving the effectiveness of the Parliament as an institution through: a) providing assistance to the Parliament to develop a comprehensive IRP, b) assisting the improvement of parliament’s relations with international counterparts and communication with the public, and c) supporting the updating of the parliament’s Rule of Procedures and creating providing technical advice during the process of deliberation; - strengthening the Parliament’s policy-making and oversight capacities through: a) the establishment of a group of high-level advisers to provide strategic advice to the Chair of the Parliament and the Cabinet of the Chair, b) providing technical support to the committees such as Human Rights, Agriculture, Environment, Health to strengthen their sectorial policy-making and oversight capacities as well as operational efficiency, and c) supporting the committees to develop their roadmaps where should be specified the priorities in policy-making and oversight; - enhancing the Parliament’s role in the European integration through: a) providing a comprehensive capacity development support to the Committee on European Integration of the Parliament,

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b) supporting the cooperation between the European Integration Committee and the Government to develop a roadmap the priorities for short, medium and long term to be taken regarding the advancing in the European integration agenda, c) supporting the European Integration Committee in the legal approximation of the national legislation according to the EU acquis (UNDP/EU 2014: 5-13). More detailed results from the first phase of the project will be given in the next subchapter 5.3. The second phase of the project ‘Strengthening the System of Parliamentary Democracy in Georgia’ is being implemented from 2016 to 2019. Despite the reforms and many actions that were developed under the first phase of the project, the Georgian Parliament requires continued support in many areas. For instance, the Parliament has a low number of legislative initiatives by Members of the Parliament and weak government oversight as well as lack of strong and adequate knowledge and skills of the Parliament staff (EU/UNDP 2016: 5). As the AA/DCFTA entered into force only in 2016, the European integration process remains high. The main challenge for the Parliament consists of the legal harmonisation of the national legislation in line with the EU acquis (EU/UNDP 2016: 5). The AA opens ‘new doors’ regarding the political and economic framework between the EU and Georgia. The AA requires, from the Georgian Parliament, the approximation of Georgian laws of around 300 secondary legislation. From this reason the role of the Georgian Parliament is incontestable through three main responsibilities: a) to contribute to the legal harmonisation process according to the EU acquis; b) to exercise oversight over the government action on AA/DCFTA implementation; c) to raise public awareness on AA and CFTA impact on citizens’ lives (EU/UNDP 2016:3). Overall, the second phase of the project ‘Strengthening the System of Parliamentary Democracy in Georgia’ continues the main four objectives mentioned above through strengthening the institutional and functional capacities, and enhancing the role of the Parliament in the power system. Furthermore, like Moldova, Georgia has joined to the Open Government Partnership (OGP) initiative in 2011 and as a result it became more open towards its citizens and developed its first legislative Action Plan – Open Parliament Georgia Action Plan in July 2015.

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5.2.3 Cluster 3 Deep and Comprehensive Free Trade Area

For the implementation of DCFTA, Georgian Government delegated three key institutions to participate in CIB:  National Service for Food Safety, Veterinary and Plant Protection;  Georgian Accreditation Centre;  National Agency for Standards, Technical Regulations and Metrology. All three institutions prepared their IRPs, however, these plans were drafted only in 2013 - 2014. For this reason, different twinning projects, staff training, study visits and other EU technical assistance were provided during 2014-2019. Box 5.4 presents the main reforms under the CIB programme of all three key institutions.

Box 5.4 CIB reforms in Georgia for Cluster 3 National Service for Food Safety, Georgian Accreditation Centre National Agency for Standards, Veterinary and Plant Protection Technical Regulations and Metrology - Legislation (primary and - Fine-tune and maintain - To increase the institutional secondary) Management System, which will capacity of GEOSTM - Quality management be in line with international - Development of human - Effective communication standard ISO/IEC17011; capacities of GEOSTM - Infrastructural development - To meet the requirements of - Operation of GEOSTM - Trainings and Human Resources specific and implement them; according to the requirements of - Veterinary surveillance: - Joint assessment activities international standards in order to laboratory diagnosis, human according to ISO/IEC17020 achieve recognition through resources (inspection Bodies Types A, B, C) regional and/or international level -Plant Protection and Pesticide and ISO/IEC17025 (Testing and is ensured. Management Calibration Laboratories), - Integration into ISO/IEC 17021, ISO/IEC 17043; international/regional - To build capacity and to train organisations human resources in line with - Nationwide application of international requirements; international standards - To put in place a management - The effective operation of WTO information system (MIS), TBT Information Centre is including software and necessary ensured. hardware; - To ensure enhanced representation and participation of GAC representatives into international organisations of accreditation, e.g. EA, ILAC, IAF; To solve technical issues to support the above-listed activities.

Source: Framework Document Georgia 2010: 12-17.

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National Service for Food Safety, Veterinary and Plant Protection The National Service for Food Safety, Veterinary and Plant Protection was replaced by the National Food Agency (NFA) in January 2011. The Ministry of Agriculture of Georgia73 has played an important role in different aspects such as veterinary surveillance as well as in adoption and enforcement of the food safety legislation. NFA74 is represented in every region of Georgia and has the following structure:  food department,  veterinary department,  phytosanitary department,  administrative department,  international relations department,  food and fodder department,  mobile response group (ENPI Report evaluation 2015: 98). The NFA has responsibility on food safety and hygiene policy, legislation and regulations in Georgia. The following priority areas were foreseen for the implementation of DCFTA in practice: - facilitate the registration of the food business operators; - gradually introduce official control for all food business operators; - undertake the legislative approximation with the EU food safety, veterinary, sanitary and phytosanitary (SPS) legislation (Framework Document Georgia 2010: 12). Georgia has passed in 2005 a bill named ‘Law on Food Safety and Quality’ in order to improve the national system related to food safety. Once Georgia moved close to the EU, especially in process of negotiation, signing and implementation of the EU AA including DCFTA, an approximation of national legislation to the EU and international standards was required. A major step taken by the Government of Georgia was to adopt a

73 In March 2018, the Ministry of Agriculture was merged with the Ministry of Environmental Protection resulting in Ministry of Environmental Protection and Agriculture (MEPA). 74 The main functions of the NFA was and still is: Food safety and quality protection; Control of hygiene, veterinary epidemiology and phytosanitary requirements and rules Risk assessment and management in food safety; control on the conditions of food; Registration and control of pesticides, agrochemicals, veterinary medicines (drugs) and mineral water; Categorize the water as commodity; Prophylactic treatment and eradication measures implementation against most dangerous animal diseases; Quarantine and protection of the plants against most dangerous pests; Coordination and supervision of private veterinary activities; Issuing permissions and certificates concerning food safety and other related matters; Providing the public with timely, impartial and objective information on potential risks and threats; Response on administrative violations regarding the food safety; Co-operate with relevant international organizations; Create crisis management plans (ENPI report 2015: 98). 229

Comprehensive Strategy and Legislative Approximation Programme in Food Safety in order to approximate the legislation related to the food safety system in line with the EU. The programme was focused on the main horizontal (framework) EU legislation for the years 2010 and 2014. The legislative approximation for vertical (sectorial) legislation was finalised in 2011. The main goal of this programme was to approximate Georgia’s legislation in food safety, veterinary and plant protection with the EU acquis. The programme was supported by the CIB programme, Twinning projects as well as other international donors (Government of Georgia Strategy 2009: 61-62). The next step taken in 2012 by the Georgian Authorities was to replace the 2005 Law with the law ‘Code of Food/Feed Safety, Veterinary and Plant Protection’ (European Foundation 2016: 6). Despite this reform of national legislation, the activities of NFA were rather modest and the revision of the legislation in this area was very slow. In this regard, as CIB key institution, the NFA requires strong reforms because of the significant role that it is playing in the implementation of the DCFTA. Improvements have started to become visible since 2013, especially regarding food safety legislation and positive results from training of the NFA staff (European Foundation 2016: 6). The NFA prepared its IRP for 2014-2015. The main measures and actions were focused on the approximation of national legislation, equipping NFA, raising efficiency and qualifications of the agency employees through specialised trainings and technical assistance to Revenue Service SPS control department and agricultural laboratory of the Ministry of Agriculture (USAID Georgia: 2015:14). As the AA including DCFTA was initialled during the Vilnius EaP Summit in November 2013, the NFA has prepared and DCFTA Action Plan for 1-3 years in order to implement the agreement in practice. In table 5.11 is presented the main (selected) priorities and the necessary actions that have been implemented by the NFA during 2014- 2017 under CIB tool.

Table 5.11 DCFTA Activities – Sanitary and Phytosanitary measures /Ministry of Agriculture and NFA 2014-2017 Priorities Actions/years Funding P1 Completing the implementation of Georgia’s 1. Drafting/reviewing and CIB funds, state budget current Food Safety Strategy and adopting of secondary Approximation Programme, in particular in legislation, in the following the implementation of the Food Safety Code fields in accordance with the and progressive adoption of the approximation programme: - implementing horizontal legislation Identification and Registration rules of bovine animals; - Animal diseases

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control measures; - Official control measures of food and feed; - Food and Feed hygiene rules; - Control of certain plant pests; -Placing of plant protection products on the market 2014-2017 2. Developing of new Institutional Reform Plan (IRP) for NFA 2014-2015 P2 Setting up Georgia’s sectoral priorities and 1. Setting up the CIB funds, state budget reviewing Georgia’s current Food Safety approximation list of the EU Strategy with a view to cover all areas under sanitary and phytosanitary, the relevant Annexes of the envisaged animal welfare and other Association Agreement. It shall include legislative measures, that sectoral legislation, according to Georgia’s Georgia will approximate, economic priorities divided into priority areas 2014-2015. 2. Reviewing Food Safety Strategy and Approximation Programme, with a view to implementing the approximation list of the EU sanitary and phytosanitary, animal welfare and other legislative measures as included in Annex XI of the AA 2015. 3. Developing a training programme and providing relevant training for staff involved in legislative approximation 2014-2017 P3 Facilitating the preparation and adaptation of 1. Cooperation and CIB funds, state budget Georgian businesses for the implementation assistance to the private of approximated SPS legislation and sector regarding fulfilment Development of SPS infrastructure of new legal requirements 2014-2017 2. Improving laboratory capacities for implementation of adopted legislation 2014-2017. Source: Georgia’s DCFTA Action Plan DCFTA 2014-2017.

In 2018 – 2019, the NFA has continued the reforms with CIB funding. Activities were focused on the strengthening of public authorities that are involved in the implementation of the SPS legislation and increased awareness. In this DCFTA Action Plan, the NFA focused on the articles from the AA/DCFTA. In table 5.12 is presented detailed actions under CIB funding75.

75 See more details about the actions that were taken in order to implement the AA and DCFTA in practices on: Ministry of Economy and Sustainable Development of Georgia (2014) DCFTA Action Plan implementation 2014 -2017. Retrieved from

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Table 5.12 DCFTA Action Plan 2018-2019 Articles of the AA Activity Responsible institution Association Agenda; 2.5 Trade The approximation of Georgian Ministry of Environmental and Trade-Related Matters: legislation with the relevant Protection and Agriculture of The Parties will cooperate in legislative acts of the EU in Georgia; LEPL – National Food preparing for the approximation of accordance with annexe XI-B to Agency Georgia's sanitary and the Association Agreement Source of funding phytosanitary legislation for food State Budget; Comprehensive and feed, plant health as well as Institutional Building Programme animal health and welfare and (CIB); The Czech project ‘the practice to that of the EU, as set development of Phytosanitary out in the relevant Annexes of the system of Georgia’ Association Agreement Association Agenda; 2.5 Trade Organizing information Ministry of Environmental and Trade-Related Matters: campaigns with the Protection and Agriculture of organizing information campaigns representatives of civil society and Georgia; LEPL – National Food with relevant agencies, businesses businesses sectors on the Agency and NGOs on the requirements for requirements for accessing the EU Source of funding accessing the EU market, as well market State budget; Comprehensive as with civil society on the Institutional Building Programme relevant consumer aspects of food (CIB) and feed safety Association Agenda; 2.5 Trade Training staff of relevant Ministry of Environmental and Trade-Related Matters: competent authorities in drafting Protection and Agriculture of Provide further EU technical and implementing the legislation, Georgia; LEPL – National Food advice and support to Georgia in providing capacity building Agency; LEPL – Revenue drafting and implementing the program and improving the Service; legislation, including training the laboratory capacity Source of funding relevant staff, providing capacity State Budget; Comprehensive building to the competent Institutional Building Programme authority and supporting the (CIB); Central Institute for improvement of the laboratory Supervising and Testing in capacity, in line with the EU Agriculture of Czech Republic; requirements. Source: Georgia DCFTA Action Plan 2018 and Georgia DCFTA Action Plan 2019.

Furthermore, the NFA strongly encourages donor institutions such as WB, SIDA, IFC, FAO to support CIB institutions in the process institutional reforming as well as the implementation of IRPs in specific sectors (COM 2011b AAP: 8).

Georgian Accreditation Centre

http://www.dcfta.gov.ge/public/filemanager/implimentation/Action%20Plan%20for%20the%20Implementati on%20of%20DCFTA%202014-2017.pdf [accessed on 19 November 2019]; Ministry of Economy and Sustainable Development of Georgia (2018) DCFTA Action Plan implementation 2018. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%202018%20National%20Action%20Pl an.pdf [accessed on 19 November 2019]; Ministry of Economy and Sustainable Development of Georgia (2019) DCFTA Action Plan implementation 2019. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%202019%20Action%20Plan.pdf [accessed on 19 November 2019].

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The Georgian Accreditation Centre (GAC) was founded in 2006. It is responsible for ‘providing accreditation of bodies performing conformity assessment of products, processes, systems and personnel’. The main activities of the GAC are:  granting accreditation,  surveillance of accredit bodies,  reaccreditation,  extension or reduction of scope,  suspension or withdrawal of accreditation,  surveillance of accredited customers,  training of assessors and experts,  development of rules and procedures,  international representation (COM 2016 GAC Twinning fiche: 4). In order to meet the obligations under the EU DCFTA, the GAC should implement the necessary reforms in this direction. As a selected CIB institution, GAC should ‘establish a market surveillance system and ensure the approximation of national regulations with the EU directives’. Thus, the GAC developed an Action Plan on ‘Market surveillance of industrial and consumer products’ and identified the needs that should be addressed in order to improve the activity of the institution (COM 2016 GAC Twinning fiche: 4). As CIB institution, the GAC had to implement ‘a proper Management System’ and integrate into ‘EA, ILAC and IAF which should be in line with the international standards ISO/IEC17011’ as well as to ‘have appropriate infrastructure and resources for information control and to maintain appropriate technical committees for different directions in accreditation’ (Framework Document Georgia 2010:14). The GAC has made progress since 2006 especially on the approximation of national legislation with the EU acquis. The EU TACIS project ‘Support to implementation art 51. (Quality Management System) of PCA’ in 2008-2011 has already been finalised. The bilateral Georgian-German project ‘Support of Quality Infrastructure in Georgia with particular consideration of Metrology’ in 2007-2013, Twinning project ‘Strengthening accreditation infrastructure according to the best practice in the EU Member States’ in 2011-201376 were also implemented.

76 European Commission (2016) GAC Twinning Fiche: Strengthening Georgian Accreditation System with the focus on EU Technical Regulations, Twinning reference GE 16/ENI EC 07 08, Beneficiary: Georgian Accreditation Centre, Ministry of Economy and Sustainable Development.

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With CIB funding, GAC has implemented in 2015 an EU project ‘Support to GAC in Management Information System’ with a duration of one year. The main goal of this project was: - to improve the IT system; - to draft an operational MIS manual; - to train GAC relevant staff (COM 2016 GAC Twinning fiche). The second project implemented by the GAC under CIB was called ‘Support to Further Strengthening Accreditation in Georgia to meet EU Best Practices’ with a duration of two years (2015-2017). The main objective was to ‘strengthen legal, technical and administrative capacities of the GAC along with the implementation of the DCFTA’ and in particular: - improving the quality of the assessment of Conformity Assessment Bodies (CABs), - developing the accreditation of CABs for notification (designation) purposes, - conducting new accreditation schemes on selected bodies as well as developing the Proficiency Testing area (COM 2016 GAC Twinning fiche). Apart from the CIB project developed under the CIB programme, GAC, during 2017, has had bilateral meetings with the European Commission for Accreditation in order to negotiate and sign specific bilateral agreements.

National Agency for Standards, Technical Regulations and Metrology The Georgian National Agency for Standards, Technical Regulations and Metrology (GEOSTM) is a national standardisation and metrology body. It is the last CIB institution from cluster 3 and the main activities of this institution are: - ‘to organize works in the field of standardisation, adoption of international and Regional European standards as well as Georgian standards, - to perform WTO TBT enquiry point activities, that will fulfil the formal requirements of the TBT Agreement and serve as a national contact point for communications on technical regulations to WTO and its member states, - to develop and maintain state measurement standards, to ensure traceability thereof, and further distribute traceability to the laboratories and enterprises in the country through calibration services’ (Framework Document Georgia 2010: 16). The Government of Georgia adopted in 2009 a Strategy on Standardisation, Accreditation, Conformity Assessment, Technical Regulation and Metrology with the aim to create a ‘solid base for further removing TBT, establish a modern technical regulation

234 and quality infrastructure system, and to ensure an adequate level of human health, life and environment protection’ (Government of Georgia Strategy 2009: 3). The Strategy had two main parts. The first one was the Strategy in Standardisation, Accreditation, Conformity Assessment, Technical Regulation and Metrology. And the second one was the Governmental Programme on Legislative Reform and Adoption of Technical Regulations. The Strategy was developed with the support of the EU and reflected the European Commission’s recommendations regarding the negotiations and implementation of the DCFTA. This Strategy has served as the main guide for the developing CIB reform regarding institution-building and approximation of the national legislation (Government of Georgia Strategy 2009: 3-8). The GEOSTM has implemented reforms related to metrology, certification and conformity assessment. With the implementation of the EU AA and DCFTA, the GEOSTM has started the second part of reforms in the framework of the AA and DCFTA according to the EU requirements. In table 5.13 the main priorities under the CIB program and the specific activities that should be taken, are shown.

Table 5.13 DCFTA Action Plan – Ministry of Economy and Sustainable Development (MESD)/GEOSTM 2014-2017 Priorities Actions/years Funding P1 Developing infrastructure related to the 1. Renovation of the State Budget; administration of standards, technical Metrological labs and office of EU-CIB budget regulations, metrology, market the GEOSTM 2014 surveillance, accreditation, conformity 2. Upgrade measurement assessment procedures standards base of renovated Metrological Labs with the new and modern Equipment 2014- 2016 3. Implementation of ISO/IEC 9001:2008 in the Standards Department of the GEOSTM 2015-2017 P2 Facilitating the preparation and Seminars and trainings in the State Budget and/or adaptation of stakeholders including relevant field by GAC and Relevant economic operators especially SMEs for GEOSTM 2014-2017 Institute Budget and/or the implementation of approximated EU-CIB TA legislation P3 Further staff training for administration 1. Trainings in standardization EU-CIB of responsible government bodies and and metrology issues for the II phase - budget agencies (human capital development) GEOSTM staff. 2014-2017 III phase (Twinning budget) Source: Georgia DCFTA Action Plan 2014-2017 p.5-9.

For Priority 1, GEOSTM has started an EU Twinning CIB Project ‘Further support for developing infrastructure related to standardisation and metrology to meet EU best

235 practices’ in 2011-2016. The project had two phases. In the first phase (2012-2015) the project focused on renovation of the infrastructure related ‘to administration of technical regulations, standardisation, metrology, accreditation, conformity assessment procedures and the market surveillance system’. As a result, the physical infrastructure and premises of the GEOSTM including laboratories, administrative offices, reception and other relevant offices were renovated (COM 2013b Twinning fiche). In the second phase (February 2016- December 2016) the project focused on procurement of measurement standards and supplementary equipment (DCFTA Action Plan 2014: 6; COM 2013b Twinning fiche). Component 2 (Support to Metrology Institute in capacity building in the preparation for further extension of the scope of international recognition) of the project was covered by CIB funding and was focused on ‘support for staff of Metrology Institute to acquire knowledge and capacities in the implementation of advanced methods regarding the operation of new reference equipment’ delivered in the framework of CIB project that was implemented in the phase 1 and II (COM 2013b Twinning fiche)77. GEOSTM has continued to implement reforms on DCFTA and the next project was ‘Further Development of Standardisation and Metrology Infrastructure to meet EU best practices’. This project was implemented in the framework of the CIB programme in May 2015-March 2017. The capacity building actions within this project were focused on ‘calibration of selected measurement standards, inter-laboratory comparisons, new testing procedures, raising awareness activities (including seminars for SMEs, business and industry representatives), study visits to similar international/regional organizations, English courses to improve language skills of GEOSTM staff’(COM 2013b Twinning fiche). In 2016, GEOSTM has started the CIB project ‘Acquisition of Measuring devices for the Development of the National Base of Etalons’. This is the second phase of the CIB project and it provides ‘for modernisation of measurement standard base of GEOSTM and procurement of metrology equipment’ (COM 2013b Twinning fiche).

77 The project has 4 components. Component 1: Support to legal approximation according to DCFTA TBT chapter in the field of standardisation and metrology; Component 2: Support to Metrology Institute in capacity building in the preparation for further extension of the scope of international recognition; Component 3: Capacity building for Standardization department in line with EU/ internationally recognised best practices; Component 4: Awareness Raising Activities and Further Integration of GEOSTM in Relevant International and Regional Standardisation and Metrology Organizations. See: European Commission (2013b) Twinning fiche: Support to Georgian National Agency for Standards and Metrology for further implementation of the EU-Georgia DCFTA requirements, Twinning reference: GE/13/ENP/EC/02/16, Beneficiary: Georgian National Agency for Standards and Metrology.

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As for other CIB institutions from Cluster 3, it is necessary to continue the process of approximation of national legislation to EU regulations and international ones. With the support of CIB budget as well as with support from EU Member States, GEOSTM continues the process of adapting to European and international standards. As the EU DCFTA was signed in 2014, the EU and Georgia developed a CIB project ‘Legislative Impact Assessment, Drafting and Representation’ (2015-2017). The aim of the project was to ‘improve the legal drafting process at the central level of government’ (COM 2013b Twinning fiche). The last Twinning project (CIB) was started by GEOSTM with the main purpose to ‘support the strengthening of administrative, human and technical capacities […]’. This project has contributed implementing requirements of the DCFTA ‘through gradual approximation of the Georgian legislation in line with new directives and best practices in the field of metrology and standardization’ (GEOSTM Twinning project fiche). The project was supported by CIB with additional fund from 2014 – 2020 ENI programme regarding the implementation of the DCFTA.

5.3 Preliminary results of CIB Georgia

This sub-chapter presents the preliminary results for each cluster under CIB programme in Georgia. As mentioned, the CIB in Georgia involved ten institutions under three clusters: coordination, oversight and trade. Funding for CIB came from EU ENPI. The preparation of the IRPs, an integral part of the CIB programme, was delayed. As result, only at the end of 2014, all CIB institutions had their IRPs ready. Therefore, a part of the CIB projects started in 2014 and have continued until 2018 - 2019.

Preliminary results: Cluster 1 The signature of the AA and DCFTA with the EU has been a priority for the Georgian Government as well as for citizens. The process was coordinated by key governmental institutions such as the Governmental Commission on EU integration, the State Minister Office on European and Euro-Atlantic Integration, the Ministry of Foreign Affairs, the Ministry of Economy and Sustainable Development, and the Administration of the Government under the Prime Minister (ToR AA 2014). The CIB institutions under Cluster 1 were focused on three significant objectives: (1) to support the implementation of the EU agreements: AA, DCFTA, VLAP through

237 strengthening the internal coordination, monitoring and reporting mechanisms, strengthening the responsible institutions, increasing the effectiveness of donor assistance programming and coordination; (2) to support the identification and implementation of reforms required by the EU agreements including approximation of legislation and (3) to support the development and implementation of the Communication and Information Strategy of the Government of Georgia in relation with the EU (ToR AA 2014). For purpose (1) it was improved the capacity regarding coordination, implementation, monitoring, evaluation of the process of implementation of the EU bilateral agreements. The institutions from the Coordination Cluster have assisted other CIB institutions in the process of increasing capacity building. For purpose (2) the Coordination Cluster offered support to other CIB institutions in the identification of the institutional issues and the required measures that are needed for improving the activity of these institutions. It was provided assistance for the development of the IRPs and relevant roadmaps. It was developed a mechanism for the approximation of national legislation according to the EU norms and standards. An important step for increasing the capacity of relevant knowledge about the EU policies, approximation of national legislation and institutional reforming, was the development of training for state institutions staff by the training centre of the Ministry of Foreign Affairs and Ministry of Justice. For purpose (3) it was provided capacity support for OSMEEAI to coordinate, develop and implement the Communication and Information Strategy including an Action Plan of the Government of Georgia. All CIB institutions were instructed to provide a Communication and Information Strategy. It was organised as well public events to inform citizens about the EU agreements regarding the advantages of the AA, DCFTA and Visa Liberalisation Action Plan (VLAP) (ToR AA 2014: 8-10). Thus, after initialling of the AA/DCFTA at the EaP summit in Vilnius 2013, the Georgian Government adopted in February 2014, a decree on the ‘measures for effective implementation of the Association Agreement including the Deep and Comprehensive Free Trade Agreement’ (Government Decree No.186 2014). The Decree stipulates the main actions that should be taken by the responsible institutions for the implementation of the AA and actions are in accordance with the CIB requirements for Cluster 1 (Coordination Cluster). Additional to the capacity support for staff state institutions, the EU provided technical support through a ‘Supply contract of equipment for the CIB coordinating cluster’ that was focused on equipping the OSMEEAI with desktop computers and video

238 conferences for MFA and Ministry of Economy and Sustainable Development (ToR AA 2014: 7). Political dialogue between the EU and the Georgian government was intensive in 2013, and many official visits between the EU officials and Georgian authorities were organised. Reforms and approximation legislation continued in the framework of the AA, DCFTA and VLAP. The negotiations on AA/DCFTA between the EU and Georgia were completed in July 2013 and within the EaP Summit in Vilnius the AA and DCFTA were initialled (COM 2014e Progress Report: 2). In June 2014, Georgia and the EU signed the AA including DCFTA and from September 2014 the EU agreements were provisionally applied (COM 2015e Progress Report: 2). So it can be argued that CIB Programme in Georgia achieved an important result by contributing to the agreement on AA including DCFTA with the EU. EU-Georgia Visa Liberalisation Dialogue was launched in June 2012. The European Commission presented to the Government of Georgia an action plan on visa liberalisation in February 2013. The VLAP had four blocks: (i) document security, including biometrics; (ii) integrated border management, migration management and asylum; (iii) public order and security; (iv) external relations and fundamental rights. The VLAP developed a set of concrete benchmarks for each block that covers two phases. The first phase focused on legislative, policy and institutional framework. The second phase focused on the process of effective implementation. Within VLAP, Georgia published all four progress reports regarding those two phases of implementation78 (COM 2015f: 2).

78 Detailed information regarding Georgia VLAP progress reports see here: European Commission (2013) First progress report on the implementation by Georgia of the Action Plan on Visa Liberalisation. Report from the Commission to the European Parliament and the Council, November 15. Retrieved from http://migration.commission.ge/files/first_progress_report.pdf [accessed on 11 November 2019]; European Commission (2014) Second progress report on the implementation by Georgia of the Action Plan on Visa Liberalisation. Report from the Commission to the European Parliament and the Council, October 29. Retrieved from http://migration.commission.ge/files/second_progress_report.pdf [accessed on 11 November 2019]; European Commission (2015) Third progress report on the implementation by Georgia of the Action Plan on Visa Liberalisation. Report from the Commission to the European Parliament and the Council, May08. Retrieved from https://ec.europa.eu/home-affairs/sites/homeaffairs/files/e- library/documents/policies/international- affairs/general/docs/third_progress_report_on_the_implementation_by_georgia_of_the_action_plan_on_visa _liberalisation_en.pdf [accessed on 11 November 2019]; European Commission (2015) Fourth progress report on the implementation by Georgia of the Action Plan on Visa Liberalisation. Report from the Commission to the European Parliament and the Council, December 18. Retrieved from https://ec.europa.eu/home-affairs/sites/homeaffairs/files/e-library/documents/policies/international- affairs/general/docs/fourth_report_georgia_implementation_action_plan_visa_liberalisation_en.pdf [accessed on 11 November 2019].

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The EU has supported the CRA through the technical assistance project and capacity building for a better implementation of Georgia’s international obligations such as visa facilitation and combating corruption (COM 2015e: 42). The European Commission proposed on 9 March 2016 to lift visa obligations for citizens of Georgia (EC Press Release 2016). As a result, on 28 March 2017 the visa obligation for citizens of Georgia who hold a biometric passport and want to travel to the Schengen zone for a short-stay was abolished (EC Press Release 2017). The most important reforms developed under Visa Liberalisation and Readmission agreement in Georgia were: - ‘creation of the State Commission on Migration Issues of Georgia and implementation of the Migration Strategy and Action Plan; establishment of a unified system of migration risk analysis; - adoption of the Law on Protection of Personal Data and establishment of the mechanism of the Personal Data Protection Inspector; - adoption and implementation of the Law on the Elimination of All Forms of Discrimination; - adoption and implementation of the National Strategy and Action Plan on Human Rights; - adoption of a new Law on Civil Service, providing for high international standards in the civil service; - creation of the Labour Inspection Department; - distinction between criminal liability for drug possession and distribution; - establishment of the mechanism of regular monitoring of the asset declarations’ (MFA Georgia). Therefore, another major result of the CIB in Georgia was that the programme contributed to achieving free travel of Georgian citizens to the EU. How much of this success is due to CIB is however hard to establish as well as the question if visa-free travel would have been achieved anyway, even without CIB.

Preliminary results: Cluster 2 The CIB project for the PDO focused on capacity development of the institution and supporting the institutions’ activities and effective functioning for the expansion of the activities of the National Preventive Mechanism and Strengthening the PDO’s analytical activities, widening outreach in the regions and intensification of the awareness-raising activities (Interview, Katsitadze PDO).

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In 2013, do to CIB, PDO has made the following improvements: (i) the management of the Department has changed and the majority of the staff members were renewed; (ii) the Public Defender finalised to split investigations and monitoring functions of National Preventive Mechanism; (iii) regular trainings for NPM monitors and its independent experts were developed; (iv) regular and ad hoc monitoring of prisons, temporary detention isolators, child houses was initiated: (v) study visits in the EU countries with the best practices and achievements in implementing NPM functions were organised (PDO Project fiche). Furthermore, PDO laid the foundation for the establishment of an Analytical Department in April 2014. Another result was that the PDO has become more active in the regions and that the activities of the institution became more effective, the visibility of the institution increased and that the awareness-raising activities on the key human rights issues occupied a vital role in the Public Defender’s work. The Parliament of Georgia played an important role in supporting the PDO in adopting laws in sensitive areas like surveillance and anti-discrimination (COM 2015e: 8). According to the Caucasus Research Resource Centre Georgia, the public attitude regarding the performance of Offices of Ombudsman has improved from 2014 to 2019. One can assume that this comes partially as result of CIB activities for this institution (see figure 5.4 and figure 5.5).

Figure 5.4 Public attitude in Georgia on Offices of Ombudsman April 2014

DK/RA 32%

Very well 1%

Well 11%

Neither badly nor well 49%

Badly 7%

Very badly 1%

Source: designed by the author based on data from the Caucasus Research Resource Centre (April 2014) ‘[Caucasus Barometer]’. Retrieved through ODA - http://caucasusbarometer.org on 18.08.2019.

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Figure 5.5 Public attitude in Georgia on Offices of Ombudsman April 2019

DK/RA 23%

Very well 2%

Well 23%

Average 40%

Badly 10%

Very badly 2%

Source: designed by the author based on data from the Caucasus Research Resource Centres. (April 2019) ‘[Caucasus Barometer]’. Retrieved through ODA - http://caucasusbarometer.org on 18.08.2019.

Table 5.14 shows in more detail how the perception of the performance of the Ombudsman institutions has increased over the years.

Table 5.14 The public perception towards ombudsman institutions in Georgia 2014 2015 2016 2017 2018 2019 Very badly 1% 1% 1% 2% 1% 2% Badly 7% 8% 10% 11% 11% 10% Average 49% 48% 44% 43% 43% 40% Well 11% 13% 16% 22% 20% 23% Very well 1% 2% 1% 1% 2% 2% DK/RA 32% 27% 27% 22% 23% 23% Source: own compilation using data from The Caucasus Research Resource Centres. (April 2014; April 2015; March 2016; April 2017; March 2018, April 2019) ‘[Caucasus Barometer]’. Retrieved through ODA - http://caucasusbarometer.org on 18.08.2019.

Regarding State Audit Office (SAO) this institution has focused on the approximation of legislation in line with the EU acquis. SAO was assisted by the EU technical assistance, under CIB, and the following results were achieved: - Law of State Audit (approved in 208 and amended in 2011); - Amendments to the Law on State Audit Office (2011 and 2012); - The Code of Ethics of the Auditors of the State Audit Office (2013) (COM 2015e: 58). Furthermore, according to the EU, SAO has made improvements in the area of external audit and adopted and implemented ‘an audit standard and an audit methodology that approximate International Standards of Supreme Audit Institutions as issued by the International Organization of Supreme Audit Institutions INTOSAI’. The Audit Manual

242 was developed by the SAO in 2011 and is based on international standards (EC 2015e: 58- 59). The SAO has implemented an EU Twinning project in 2014 that was focused on strengthening institutional capacities in line with international standards. In 2015, SAO implemented a web portal ‘Budget Monitor’ that provides public access to information on public finance and SAO reports79. According to the EU Association implementation report on Georgia, the SAO ‘has strengthened its performance audit capacities in identifying the efficiency and effectiveness of Government programmes and organisations which support the improvement of management and accountability’ (COM 2019a: 11). A future activity, the development of the ‘Budget Monitor’ led to an increasing in the participation of citizens in the audit process. As a result, SAO is able to identify the priority audit areas that represent the highest interest for the citizens (Georgia Budget Monitor). As it was mentioned in sub-chapter 5.2.2, Georgia joined to the Open Government Partnership (OPG) in the period of 2011 until 2019, and Georgia prepared four National Action Plans on OGP:  National Action Plan (2012-2013)  National Action Plan (2014-2015)  National Action Plan (2016-2017)  National Action Plan (2018-2019) The main achievements of Georgia, as a member of the Open Government Partnership, are presented entire in Box 5.4.

Box 5.4 The Georgian achievements on the Open Government Partnership A permanent coordination mechanism for open dialogue with civil society. Public information is available electronically80. An electronic petition portal https://ichange.gov.ge/, which allows each citizen to lodge his/her petition for the Government of Georgia. First Open Data Portal - http://data.gov.ge/ was created. Public services became more accessible online - https://www.my.gov.ge. All branches of government are involved in the open management process. Together with the Ministry of Justice, the Government of Georgia and the Tbilisi City Hall's Office are implementing the Open Government Plans. The Supreme Court of Georgia also participates in the process. Partner countries have been elected Georgia as a member of the OGP Governing Committee for two years in

79 Budget Monitor is a unique analytical web-platform, which provides comprehensive information about public finances, designed from the auditor’s perspective via different data visualization tools, such as interactive and user-friendly diagrams, info-graphics and tables. Moreover, the web portal’s info-buttons enable visitors to get information of the key national indicators, and explain how the graphs and tables can be used for in-depth data analysis. See the web portal here (information available in English) Open Government Partnership, Budget monitor retrieved from https://budgetmonitor.ge/en [accessed 29 August 2019]. 80 Since 2013 the Government of Georgia adopted a directive in which public agencies oblige to publicly disclose public information in electronic form. Thus it is not necessary to wait for the request. 243

2014. In 2016 Georgia was elected as Co-Chairman of the OGP for 2017-2018. Georgia is the sixth Chairman of OGP’. Source: Fileeva, E. Assessment on the implementation of the Action Plan for an Open Government in Georgia 2018: 4-5.

Figure 5.6 shows the rank of Georgia regarding E-governance according to the UN E-Government Index. It is clear that from 2010 until 2018 the situation regarding open data has improved, partially due to CIB activities. In 2010, Georgia was ranked 100th in UN E- Government. As from 2011, Georgia is part of the OGP, in 2018 it has improved its ranking to 60 in the e-government index. Clearly, Georgia has taken significant steps towards increasing its online presence with the Governmental portal.

Figure 5.6 Rank of Georgia among countries worldwide regarding the perception of E-Governance

2010 100

2012 72

2014 56

2016 61

2018 60

0 20 40 60 80 100 120

Source: Compilation by the author using data from UN E-Governance Index 2010, 2012, 2014, 2016, 2018.

Taking the UN E-Participation Index, figure 5.7 illustrates the participation of citizens in relation with government decisions. The e-participation tool is important in all aspects from e-information, e-consultation to e-decision making (see short explanation about these concepts in chapter 4.3.1 p.182). In 2010, Georgia scored 127 compared with 2018 when it was on rank 87.

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Figure 5.7 E-participation Index in Georgia 2010-2018

2010 127

2012 66

2014 49

2016 76

2018 87

0 20 40 60 80 100 120 140

Source: designed by the author using data from UN E-participation Index 2010, 2012, 2014, 2016, 2018.

As regards the rule of law in Georgia, figure 5.8 presents how it is perceived by the Georgian citizens. Georgia was first evaluated in 2012 and the source of the data is the Rule of Law Index by the World Justice Project81.

Figure 5.8 Rank of Georgia among countries regarding the perception of E-participation

45 40 41 38 36 35 34 31 30 29 25 20 15 10 5 0 2012-13 2014 2015 2016 2017-18 2019

Source: designed by the author using data from the WJP Rule of Law Index 2019, 2018-17, 2016, 2015, 2014, 2012-13.

The perceived performance of the rule of law is measured using 44 indicators across eight primary rule of law factors: Constraints on Government Powers, Absence of Corruption, Open Government, Fundamental Rights, Order and Security, Regulatory

81 The WJP uses four dimensions to measure government openness: publicized laws and government data, right to information, civic participation, complaint mechanisms, see the World Justice Project, Open Government Index retrieved from http://data.worldjusticeproject.org/opengov/ [accessed on 12 November 2019].

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Enforcement, Civil Justice, and Criminal Justice (WJP Rule of Law 2019). Table 5.15 shows the rank for each rule of law factor in Georgia from 2012 to 2019.

Table 5.15 Rank of Georgia among countries worldwide regarding the perception of different Rule of Law indicators Rule of law factors 2012-13 2014 2015 2016 2017-18 2019 Factor 1 Constraints on Government 66/97 55/99 36/102 43/113 52/113 53/126 Powers Factor 2 Absence of corruption 21/97 24/99 22/102 22/113 23/113 24/126 Factor 3 Open Government 54/97 43/99 29/102 31/113 42/113 39/126 Factor 4 Fundamental Rights 49/97 51/99 38/102 39/113 46/113 48/126 Factor 5 Order and Security 19/97 17/99 24/102 37/113 30/113 36/126 Factor 6 Regulatory Enforcement 25/97 31/99 25/102 28/113 32/113 42/126 Factor 7Civil Justice 31/97 32/99 26/102 39/113 55/113 62/126 Factor 8 Criminal Justice 25/97 36/99 35/102 38/113 47/113 46/126 Source: designed by the author on the basis of own calculation using information from WJP Rule of Law.

The data in the table above shows a mixed picture while certain indicators improved, others got worse. Probably, the general political situation in Georgia such as the rise and fall of President Saakashvili and his anti-campaigns had a higher influence in the ranking results that CIB. Also, in more technical areas such as E-Governance results were easier to achieve and influence by CIB than in more political areas such as Rule of law and corruption. However, despite many improvements that the SAO has made through its projects, the main issues identified were institutional aspects at the individual level such as performance audits, IT audits, they are affected by broader institutional and enabling environment aspects because it is not fully independent according to international standards (COM 2015e Vol II: 61). As regards the area of internal audit the main issue consists, in the limited number of skilled and experiences internal auditors. Despite the training and study visits organised by CIB, there is high turnover of staff due to the regular compulsory rotation of financial officers and low remuneration. The function of internal auditors comes with a relative low remuneration which makes it difficult to attract qualified auditors in the government sphere (COM 2015e Vol II: 61). As it was mentioned in subchapter 5.2.2, in April 2016, the first phase of the five year EU project ‘Strengthening the System of Parliamentary Democracy in Georgia’ that focused on the effectiveness of the Parliament, strengthening the Parliament’s policy making and oversight capacities and enhancing the Parliament’s role in the European

246 integration was closed. The end of the project has brought significant results as it is presented entirely in Box 5.5:

Box 5.5 The CIB achievements of the Georgian Parliament The IRP was adopted in May 2016 by the Bureau of the Parliament. Communications Department staff has been trained on a number of issues. In 2016, the Open Parliament Georgia Action Plan commitments have been implemented almost 60%. International Relations Department structure was revised and a new Inter-Parliamentary Unit created. Staff of Parliamentary committees have been trained in effective financial oversight. Capacities of MPs and staff increased through EU legal approximation trainings, on-the-job-consultancies, study visit and international parliamentary conference dedicated to EU integration issues. Multi-year strategic action plans of six parliamentary committees (Environmental Protection and Natural Resources Committee; European Integration Committee; Foreign Relations Committee; Sports and Youth Affairs Committee; Healthcare and Social Issues Committee82) developed including with the active civil society engagement. Source: UNDP Georgia: Strengthening Parliamentary Democracy in Georgia retrieved from https://www.ge.undp.org/content/georgia/en/home/projects/strengthening-parliamentary-democracy.html, [accessed on 18 August 2019].

The development of the IRP helped the Parliament of Georgia to assess its state of affairs and to identify the pressing needs and challenges in the institution. The IRP described the key reform areas that needed to be addressed by the Parliament in order to develop a stronger and more effective institution. As part of the OGP, the Parliament developed an openness action plan and promoted transparency and more visibility for both citizens and international communities. Parliament’s policy-making and oversight capacities were improved. The Parliament received direct advice including on European integration as well as increased the capacity building activities for sectorial committees through trainings, coaching and study visits. As a result of these activities the committees are now able to better analyse budget laws and use SAO reports to scrutinise budget and its executions. The Parliament has improved its public outreach as a result of developing the Communication Strategy and Action Plan. It developed its basic capacity in the harmonisation of the national legislation with the EU

82 See details of the multi-year strategic plans of the parliamentary committees: Parliament of Georgia (2018) Committee on Environmental Protection and Natural Resources of the Parliament of Georgia. Committee strategy and action plan 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/108828/Env_Strategy_and_AP_Eng [accessed on 18 August 2019]; Parliament of Georgia (2018) Action plan of the Committee on European Integration of the Parliament of Georgia, retrieved from http://www.parliament.ge/uploads/other/85/85953.pdf [accessed on 18 August 2019]; Parliament of Georgia (2018) Committee on Sports and Youth Affairs of the Parliament of Georgia. Strategy and Action Plan for 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/91312/SYC_Strategy_Plan_Eng [accessed on 18 August 2019]; Parliament of Georgia (2018) Foreign Relation Committee. Strategy and Action Plan 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/108826/For._Rel_._Committee_AP_Eng [accessed on 18 August 2019]; Parliament of Georgia (2018) Action Plan of the Healthcare and Social Issue Committee of the Parliament of Georgia 2017-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/81370/Health_AP_Eng [accessed on 18 August 2019].

247 standards. Moreover, it was initiated communication with the public on EU integration (UNDP/EU 2016: 4). On the issue of corruption, figure 5.9 illustrates the corruption perception in Georgia from 2009 to 2018. In 2018, Georgia is ranked with a score of 58th out of 100. According to the Corruption Perception Index 2018 of Transparency International, Georgia leads the region Eastern Europe & Central Asia in a group of 19 countries (CPI 2018). Georgia increased by two points since 2017 however, the country has faced democratic backsliding that led to a slight increase of vulnerability to high-level corruption. The decline is due to ‘a lack of accountability of law enforcement, political interference in the judiciary, state capture and government sponsored attacked on independent civil society’, so that, Georgia has failed to establish independent agencies to take on this issue’ (Transparency International 2018).

Figure 5.9 Corruption Perception Index in Georgia 2009-2018

Georgia Corruption Perception Index 2009-2018 70

60 57 56 58 52 52 52

50 49

41 41 40 38

30 Tytuł osi 20

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: designed by the author on the basis of the TI 2009-2019.

Despite reforms supported by CIB and others, the judiciary remains one of the least trusted institutions in Georgia. Table 5.16 highlights, according to the Caucasus Research Resource Centre, that the public trust in the judicial system has significantly declined over the evaluation period 2009 – 2017. A major reason for the low reputation of the court system is the perception that criminal prosecutions are unfairly handled.

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Table 5.16 Public perceptions of the court system in Georgia 2009-2017 (%) 2017 2015 2013 2012 2011 2010 2009 Fully distrust 11 11 6 12 10 8 12 Rather distrust 16 13 13 15 10 10 16 Neither trust nor 36 37 39 28 23 30 32 distrust Rather trust 19 18 19 15 25 19 19 Fully trust 5 6 3 3 6 10 6 DK/RA 13 15 20 26 25 23 15 Source: designed by the author based on the information from the Caucasus Research Resource Centre. (October 2017, November 2015, November 2013, October 2012, October 2011, November 2010, October 2009) [Caucasus Barometer]. Retrieved through ODA - http://caucasusbarometer.org [accessed on 19.08.2019].

Preliminary results: Cluster 3 DCFTA as part of the EU AA established a free trade area for trade and goods. In Georgia, as in the case of Moldova, the provisional application started in September 2014. Georgia did not have transitional periods for the elimination of important duties that were used in the case of Moldova, due to the liberal reforms undertaken by M. Saakashvili in 2006 regarding elimination of import tariffs for most products. In this way, Georgia applied one of the lowest WTO tariff rates in worldwide at 1.5% (Emerson and Kovzididze 2018: 36). As previously highlighted (see sub-chapter 5.2.3) three key institutions were involved in CIB cluster 3 in order to reform the institutional capacity as well as preparing the staff of the relevant institutions for the implementation of the EU DCFTA and in providing relevant skills for the approximation of national legislation with the EU acquis. The CIB Georgia Framework Document stated that additional financial support, on top of the EU support, was expected from the EU Member States and other international donors. Indeed, Georgia has beneficiated from additional financial support from other international institutions for the reforming of its CIB institutions, especially for cluster 3. CIB key institution from the third cluster did not start preparing their IRP in 2011-2012 as originally foreseen in the Georgia Framework Document. One of the reasons that the CIB institutions started later their IRP could be that the envisaged reforms in the Georgia CIB Framework Document for the cluster 3 were accomplished by Georgian authorities as it was explained in the chapter 5.2.3 (p. 226). In this way, the CIB institutions had to decide on the needed reforms in order to implement in practice EU DCFTA. Another reason could be that the CIB institutions had at that moment under development other programmes financed by EU (under ENP Action Plan), World

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Bank (WB), Swedish International Development Cooperation Agency (SIDA), USAID and others and these institutions preferred to not overlap the activities from these projects with a new plan under CIB programme. However, all three institutions developed some CIB projects. There were mostly of a technical nature, such as the provision equipment for the specialised laboratories, IT equipment, and training for specialised staff, in order to prepare the ground for the next more complex CIB projects. As one of its major CIB activities, the NFA implemented in September 2011 – December 2014 the project ‘Partnership Cooperation between the Georgian National Food Agency and the Swedish of Agriculture’, with the financial support of the SIDA. As the contribution of other international institutions in the EaP countries is not part of this thesis, the results of this project will not be developed here83, however, there are some specific issues that are related directly to the CIB program, so that it is worth mentioning them here. The Swedish project (Capacity Building in Agriculture in Georgia) had similar objectives as the CIB programme for the Ministry of Agriculture respectively the NFA. Hence, as both partners worked on different projects with different financial support, but with similar objectives and same activities on the same issues, it is difficult to evaluate the results (separately) at the end of the project. Concerning the attitude of ‘we are doing it together’ that both CIB and SIDA have adopted, on the one hand it is a positive measure in terms of donor coordination, on the other hand it ‘dilutes responsibilities in a way that is not acceptable for a publicly funded project’ (Devine and Bell 2014: 34-35). Last but not least, the preparation of the IRP by CIB institutions was delayed because Georgian institutions prepared new documents IRP, while in Moldova, old SDPs documents were adopted into new IRP’s ones. EU CIB Program was supporting the Ministry of Agriculture including the NFA in three main directions: food safety, veterinary and phytosanitary fields. EU experts were actively involved in the process of approximation of Georgian legislation to the EU legislation. Since 2012 the NFA has implemented a complex project ‘Strengthening the capacity of the National Food Agency of Georgia for risk assessment and risk management’. The project is developed under the CIB programme and has received additional support from other EU Member States and international donors. The project has

83 The SIDA project has six Work Packages (WP): The WP1 Implementation of Laws and Regulations in the Food Chain; WP2 Public Administration and Management; WP3 Veterinary Services; WP4 Systemic Control and Inspections in the Food Chain; Wp5 Civil Emergency Preparedness; WP6 Plant Health and National Inspections see the evaluation of the entire project in Devine, V. and Bell, J. et all (2014) The review of the Partnership Cooperation between the Swedish Board of Agriculture and the Georgian National Food Agency 2011-2014, Final report, SIDA.

250 three phases. The first phase (2012-2015) ‘Support to the National Food Agency in Georgia’ was mostly technical and was divided into two parts. The first part of the project centred on reconstruction of the existing NFA premises, providing IT equipment and necessary tools for the food inspection, two NFA buildings were reconstructed in Tbilisi and Kutaisi and seven new regional NFA buildings were built due to the necessity caused by growing staff in this area. It has started to build capacity in the area of responsibility so as to be able to meet and apply EU and international standards in food safety. The area supported included: ‘official controls and inspections, risk analysis, veterinary, phytosanitary, epizooties, animal identification/registration, surveillance and scientific research, public awareness including for business operators, farmers and the public at large, stakeholder co-operation, support for private veterinarians, information technology, physical infrastructure, and consumer and food processor surveys’ (Devine and Bell 2014: 12). The second part of the project focused mostly on human resources. Thus, trainings and exchanges programmes for the NFA staff were developed and provided, specifically for veterinary and phytosanitary staff in order to increase the capacity of the NFA and to establish cooperation with counterpart institutions in the EU (Khurtsia 2016). Likewise, the NFA started to work on the IRP as the key of the CIB programme where the needs of NFA for the implementation of the reforms under the EU agreements, namely DCFTA were specified. At the end of 2015, the IRP was finalised and the activities were strictly connected with the provisions stipulated in the DCFTA. Thus, the DCFTA Action Plan developed by the NFA specifies all actions that should be taken during specific time. Box 5.6 illustrates the main results from the first phase of the CIB project (2012 - 2015).

Box 5.6 CIB – DCFTA results (2012-2015) Staff levels have risen from 288 to 513, and in particular NFA staff working at regional offices outside Tbilisi is up from just 11 to 297. As a result, the number and efficiency of inspections increased. Out of 30,000 Georgian food business operators (FBOs), 2,075 were inspected in 2014 compared with only 421 in 2012. The number of FBOs not complying with regulations fell between 2013 and 2014 by almost 10%, while the sale of food with expired sell-by date decreased by almost 40%.

Source: EU neighbours East 2016: 4.

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The second phase (2016-2017) of the mentioned CIB project84 was more specific and the sub-project that was implemented by the NFA was ‘Presentation of Bulgarian experience in developing and implementing of risk assessment and risk management policies and procedures’ in June 2017. Additional to the CIB funding, the NFA received direct support from the Bulgarian Food Safety Agency, the Ministry of Agriculture, Food and Forestry of Republic of Bulgaria and USAID. The main goal of the project was to facilitate the exchange of experience between experts from different countries and ‘to support the NFA experts in assessing and addressing risks in animal health and trade with animal products’ (MFA Bulgaria Press release 2016 and DCFTA Report 2016: 7). The Bulgarian Food Safety Agency (BFSA) offered expertise and trainings regarding animal health and disease mitigation. The BFSA has had experience of pre- accession and post-accession and of direct monitoring by the EU in order to align its legislation to the EU acquis. Thus BFSA had a good perspective to offer know-how and important experience to mentor Georgia (Working Plan Bulgaria and Georgia 2017: 2). For example, in September 2017, the representatives of BFSA organised a training seminar for Georgian experts ‘Presentation of Bulgarian experience in developing and implementing of risk management policies and procedures’ (DCFTA Report 2016: 7). The third phase of the CIB project focused on providing expertise for NFA staff and approximation of the national legislation in line with the EU acquis (2017-2019). Approximation of national legislation in line with the EU is based on the Comprehensive Strategy and Legislative Approximation Programme in Food Safety prepared by the Government of Georgia in 2009 (see details in the sub-chapter 5.2.3) has resulted with good progress for the NFA. The EU Technical Assistance and CIB programme have had a great contribution for this institution that has resulted in significant progress in safety standards and in moving towards European phytosanitary standards. The NFA has made significant steps in improving the regulations, inspection and control of foodstuffs, producers, processors, and abattoirs in Georgia. The recognition of the Government of Georgia that regional and international trades as well as, the domestic consumer market is a necessary prerequisite for an efficient system of monitoring and control for food safety (COM 2015e: 48-49). The general impression is NFA has used the CIB programme effectively and efficiently, by focusing on sanitary and phytosanitary standards (ENPI evaluation report

84 ‘Strengthening the capacity of the National Food Agency of Georgia for risk assessment and risk management’

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2015: 78). The adherence of the NFA to the EU phytosanitary standards and improving foods safety is significant for the development of Georgian agriculture within the DCFTA framework. Regarding human resources, which is a significant component of the CIB tool, the CIB funding has played an important role in preparing staff from the NFA through different trainings seminars study visits and other means. NFA employees were instructed in the following trainings: - designing a list of priorities for legislative approximation; - the rules of state control according to the EU legislation; - implementation of EU law; - approximation of Georgian legislation with relevant EU legislation (DCFTA Report Georgia 2014: 9). A full and comprehensive list of the main results obtained from the activities conducted by the Ministry of Agriculture and the NFA under CIB programme is given in Table 1 in Annex 1. The EU as active support for the NFA will continue its support especially on the approximate domestic legislation, regulations and standards as required by the EU acquis. In the Comprehensive Strategy and Legal Approximation Programme on Food Safety, it is specified that one of the ‘crucial components to support establishment of a solid food safety system’ is to create an effective unified national system of laboratories (Government of Georgia NFA 2009: 27). Laboratories in Georgia are accredited by the Georgian Accreditation Centre (GAC). Thus, the GAC, with CIB funding, has ensured the development of effective system of laboratories (Government of Georgia NFA 2011: 30). For the identification of the institutional gaps of the GAC, the Government of Georgia worked together with an Estonian expert (EU High Adviser) and UNDP as additional international partner. According to the DCFTA Report 2016, GAC provided trainings throughout 2016 for stakeholders, including the representatives of laboratories and inspection organs. The trainings concerned the following international standards: ISO/IEC 17020; ISO/IEC 15189; ISO/IEC 17065; ISO/IEC 17043. Training sessions were also conducted regarding reference laboratories and how to take food product samples. Throughout 2016, 12 training sessions were conducted for more than 240 participants (DCFTA Report 2016: 4). In 2017 the European Commission for Accreditation (ECA) signed bilateral agreements with GAC on:  calibration of laboratories,

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 testing and medical laboratories,  certification bodies – products,  certification bodies – persons,  inspection bodies (ECA Report 2018: 48). The bilateral recognition agreements mean ‘international recognition of conformity assessment documents (certificates and laboratory testing protocols) issued by the organizations accredited in Georgia’. As a result, this step reduces ‘technical barriers for the Georgian products on international markets and contributes to increase of competitiveness of Georgian-originating products’ (DCFTA Report 2016: 4 and DCFTA report 2018). At the end of 2017 the EU CIB Project ‘Support to Further Strengthening Accreditation in Georgia to meet EU best practices’ was closed. The main results of the project are: - seminars on international standards on ISO/IEC 17020, ISO/IEC 17043, ISO/IEC 17021, ISO/IEC 17024; - trainings on issues related to the uncertainty of measurement, Flexible scope and taking samples in the food safety spheres. The trainings were organised for evaluators of the Accreditation Centre, the representatives of accredited bodies and other interested administrative offices. Two qualification testing events were conducted: - qualification exam in testing building materials; - qualification testing in determining the underground water contour (DCFTA Report 2017:26). In the framework of the CIB project ‘Acquisition of Measuring devices for the Development of the National Base of Etalons’ during 2016 the GEOSTM laboratories were supplemented with the following equipment: ‘radiation metrology; small capacities; power, pressure, acoustic measurements; temperature, electricity humidity; radio-physical measurements; time and frequency; geometric measurements; optics, mass, so-called portable laboratory, a specially equipped truck which allows calibrating large capacity scales at the location of large weighing equipment and scales in the laboratory’ (DCFTA Report 2016: 4). GEOSTM staff has been trained as well through a CIB workshop, in order to assist economic operators and small-medium business in approximation legislation (DCFTA Report 2014: 5). In Appendix II a comprehensive list of detailed results that have made by the GEOSTM from 2017 to 2019 is presented.

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The following two figures (Figure 5.10 and Figure 5.11) illustrate data on Georgian export and import from 2009 to 2018. From 2014, with the signing of the DCFTA, Georgia has free trade regimes with markets from the EU, CIS, Turkey and China. Furthermore, in June 2018 Georgia has concluded and signed an agreement with Hong Kong (Emerson and Kovziridze 2018: 38-39). Figure 5.10 presents data regarding Georgia trade structure by region namely the EU and CIS countries as well as Russia. The data may be divided into two parts: from 2009 to 2013, before the DCFTA and from 2014 to 2018 after the entry into force of the DCFTA. The export to the EU countries from 2009 to 2018 rose from USD 238m to USD730m. In 2018,the total exports in Georgia were USD 3.336m, of which exports to the EU were USD 730m, accounting for 21,8% of total exports. In the same year, Georgian exports to CIS countries were USD 1.669m of which to Russia was USD 436 which is equal to 50%, respectively 13%. In comparison, in 2013 the total Georgian export was USD 2.910m of which exports to the EU was USD 607m accounting for 20.8% of total exports. While in the CIS total exports was USD 1.621m of which to Russia was USD190m accounting for 55.6% and respectively 6.5% (see Appendix III Table C with detailed information regarding data for each region/country).

Figure 5.10 Georgian exports in 2009-2018 (thousand USD) Georgian exports 2009-2018 (thsd.USD) 4,000,000.0 3,500,000.0 3,000,000.0 2,500,000.0 2,000,000.0 1,500,000.0 1,000,000.0 500,000.0 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total EU countries CIS counrties Russia

Source: designed by the author based on data form GEOSTAT, Georgia

As for the import structure, Figure 5.11 shows that total imports have increased from 2013 to 2018. In 2018, the total imports in Georgia were USD 9.137m, of which USD 2.506m were imported from the EU (27.4%). While imports from the CIS countries were

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USD 2.695 accounting of 29.4% of which imports from Russia were USD 934m which is equal with 10.2%. In comparison, in 2013 in Georgia’s total imports was USD 8.022m of which USD 2.266m (28.2%) were imported from the EU. Imports from the CIS countries were USD 2.177m of which from Russia were USD 584m which constituted 27.1% respectively 7.2%.

Figure 5.11 Georgian imports in 2009-2018 (thousands USD) Georgian imports 2009 -2018 (thsd. USD) 10,000,000.0

8,000,000.0

6,000,000.0

4,000,000.0

2,000,000.0

- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total EU countries CIS counrties Russia

Source: compilation by the author using data from GEOSTAT.

It is important to note that Georgia beneficiates from the economic integration through the DCFTA implementation, which enhanced Georgian trade towards the EU (COM 2019 Progress Report: 19). However, Georgia still needs more efforts through deep reforms related to the improvement of the investment climate to stimulate exports and improve the trade balance between the EU and Georgia (COM 2019 Progress report: 19). From 2009 to 2018 exports from Georgia to the EU grew much stronger percentage-wise than exports from the EU to Georgia in the other direction. This follows the same pattern as EU-Moldova trade relations over the same time period. Therefore, the trade deficit of Moldova and Georgia with the EU became smaller in percentage terms. It can be plausibly argued that the DFTA agreements and CIB institutional support contributed to this positive trend in both countries.

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5.4 Summary

In order to evaluate the impact of the CIB programme in Georgia, a ‘3E criteria’ approach can be applied (see the chapter on Moldova above). Regarding effectiveness of the CIB institutions, all expected reforms were achieved. For instance, in cluster 1 (coordination cluster), all chosen institutions (see table 5.8) were involved in a direct dialogue with the EU through a process of communication, negotiation and implementation of EU bilateral and regional agreements in the context of EU integration reforms. Within cluster 2, all chosen institutions achieved their planned reforms under the CIB programme according to what had been agreed bilaterally between the EU and Georgia. In cluster 3, three important institutions were included that have a significant role in the implementation of DCFTA. As a result of the good progress (but also due to a delayed start), in 2014, the EU decided to provide additional funds for DCFTA. Regarding the efficiency of the CIB programme in Georgia, as in the case of Moldova, the time for the implementation of programme was too short for the necessary reforms for institution-building, and therefore some activities were prolonged. The preparation of IRP by key institutions was delayed. However, by 2014 all CIB institutions had established their plans. Overall, Georgia seriously engaged in the institutional reforms under CIB and thereby demonstrated a strong political will and conviction. In addition, as it was foreseen in the CIB Framework Document that other international organisations could contribute with additional funds to the institutional reforms, UNDP and Swedish aid agency Sida also undertook projects for institution-building under CIB. Regarding equity, the distribution of institutions in each cluster in Georgia was uniform. The decision to include three key state institutions that had direct dialogue with the EU demonstrated that Georgia was willing to strengthen the institutional framework according to EU rules and values. The distribution of salary to civil servants in Georgia can be considered as rather equitable as well. While in Moldova there is a high level of staff turnover in state institutions because of the low salary level, in Georgia the situation is stable. In this context, the civil servants that were trained within the CIB programme (study visits, training, English language skills etc) have mostly remained in the participating institutions. To summarize, the criteria effectiveness of CIB reforms was achieved, the criteria efficiency of reforming key institutions was partially achieved because the

257 originally foreseen three years implementation period was too short, and the criteria equity of institutions and civil servants can be considered as accomplished.

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Conclusions and outcomes

The main goal of the conclusion is threefold: to summarise the findings of the thesis by verifying the research hypotheses of the introduction, to summarise the result of CIB in Georgia and Moldova and to show to which extent the results of this thesis could be relevant for other further research. For a better understanding of the process of institution-building in the selected EaP countries Moldova and Georgia, the rational choice institutionalism (RCI) approach was used to delimitate the role of the identified rational actors namely EU, Moldavian and Georgian Governments and Russia, and their preferences concerning norms and conventions like CIB framework documents and AA. The thesis presented a general chronological context of both countries, in order to understand the main framework conditions for their strive to establish modern democratic systems. Transition theory was presented as a theoretical background. As the role of the EU is significant in the process of democratization of these countries, the Europeanization process through ‘top-down’ mechanism was presented and discussed. RCI turned out to be a suitable approach for analysing the role of rational actors in the context of institution-building in Georgia and Moldova. The rational choice approach was useful to understand the actions and behaviour of the main actors (the EU, the two governments, and Russia) in the context of their preferences. The RCI approach was helpful to understand the preferences of the actors in approving and following (or not) the norms and conventions of the main discussed political intiatives and frameworks, namely CIB, AA and DCFTA. Russia was interpreted as a regional actor of significant importance. The country was included in the analysis because it tries to keep control in the region through different tactics such as military interventions, economic sanctions, ‘gas war’, and others. Informal rules by ‘obscured groups of actors’ that obstructed the path towards democratic reforms were identified as well using the RCI approach. Here as well, RCI proved useful because it allowed to study the role of non-traditional rational actors and their interests in taking decisions. The main research hypothesis tested in this dissertation was that the Comprehensive Institution Building Programme is an efficient, effective and equitable state-of-the-art institutional reform approach that successfully helps Eastern Partnership countries to prepare and implement the complex obligations of

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EU Association Agreement and Deep and Comprehensive Free Trade Agreement, and thereby brings them a significant step closer to a possible later EU candidate status and eventual membership. The CIB programme was intended to be an efficient, effective and equitable institutional reform approach for the EaP countries. However, this thesis showed that neither the studied EaP countries nor the EU put sufficient pressure on the CIB key institutions to prepare and implement the complex reforms required for a high-quality implementation of the AA and DCFTA. As of early 2020, Georgia still conducts reforms under the DCFTA cluster of its CIB programme, which should have closed down years ago already. In principle, all CIB key institutions in both countries conducted parts or all of the agreed CIB reform programmes for their respective institutions. The problem was the quality of the implementation in practice. However, the key institutions responsible for the implementation of AA and DCFTA from both countries Georgia and Moldova still continue with institutional reforms that were inspired by the CIB programme, so better results of institutional reforms can still occur in the future. Therefore, this hypothesis proved to be partially true. In the following, the secondary hypotheses from the introductory chapter will be discussed one by one. H1. Reforming institutions is a vital component of the transformation of the Eastern Partnership countries. The transition from an authoritarian system to a democratic one required deep reforms of political and economic institutions. In order to build a consolidated democracy, strong rule of law and good governance is necessary for the implementation of systematic and significant reforms. The persistence of a ‘legacy of the past’ in both countries has made the transition process longer than expected. In order to evaluate where Georgia and Moldova stand on democratic and institutional reforms, the author selected political, economic and governance indicators (Freedom in the World Index, EUI Democracy Index, Economic Freedom by Heritage Foundation and BTI Transformation). Regarding the transition process to consolidated democracy, Moldova and Georgia are rather similar in their level of democratic freedom and civil liberties, as it was shown in figure 4.1 and figure 5.1, although in general the implementation of democratic reforms in Georgia is considered to be slightly more advanced. This notwithstanding, neither Georgia nor Moldova can be considered to be a consolidated democracy yet. According to the Freedom in the World Index, both countries are considered to be ‘partly free’. The EUI

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Democracy Index ranked Moldova as ‘hybrid regime’ and Georgia as ‘flawed democracy’. The BTI Transformation Index covers three indicators (democracy status, market economic status and governance status): The governance status of Georgia is ranked as ‘good’, while that of Moldova as ‘moderate’. Economically, Georgia is in the category good performance, while Moldova has ‘functional flaws’. However, both countries have a similar position in market transformation. Regarding democratic status, both countries are ranked as ‘defective democracy’. Despite the huge political and military challenges that Georgia faced since 1991, the country can show successes in its efforts of consolidating democracy. In Moldova political and institutional reforms since independence were implemented at a slower pace. After the collapse of the pro-reform government in November 2019, the country is facing yet another political impasse. For the time being (December 2019) the Parliament and Government are controlled by the Socialist Party, which is affiliated to Russia. Key reforms, such as the fight against corruption and the establishment of an independent prosecutor, have once again stalled. In this context, this hypothesis (H1) proved to be true. The process of Europeanization in this thesis was analysed mainly from a ‘top- down’ perspective. EU was seen as the main actor that has promoted a democratic agenda and provided assistance in countries Moldova and Georgia through different instruments such as ENPI and ENI. (As in general the EU promotes a stronger cooperation with its neighbours in the East and the South in order to support these countries in their way towards democracy, respect for rule of law, and economic development.) The thesis investigated the process of Europeanization through institution-building in Georgia and Moldova with the help of the CIB programme. The EU plays a significant role in these countries by supporting reforms and policies and by bringing them closer to the EU. Once the EU advanced its role through the negotiation and signing the AA with three EaP countries Moldova, Georgia and Ukraine, the need for institution-building became more urgent. Therefore, the main research question was: what changes and opportunities occurred throughout the implementation of the Comprehensive Institution Building Programme in Moldova and Georgia and how efficient and effective was the programme’s implementation, given that there were external and internal factors which affected/disturbed the way to European integration of these countries?

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The reason behind this question was that it is not possible to assume that the CIB program implemented by the EU in the EaP countries could not have real success. Therefore, through this question the external and internal factors were taken into consideration that might influence the success of reforms, and the preparation for ‘Europeanization’ of state institutions in accordance with EU requirements. As mentioned, the author took into consideration the ‘possible’ implication of the Russian factor. Russia, as a regional actor, plays a considerable role in the Europeanization process of the EaP countries. Apart from the external factors, the author considered the internal factors such as political instability, postponed democratic reforms by the political class as well as incapacity pf state institutions to implement reforms. These internal factors have had an impact on the process of transformation of these countries. H2. The EU-funded Comprehensive Institution Building Programme was an important instrument for reforming and developing public institutions in Eastern Partnership countries. The CIB program was an institution-building approach developed for the EaP countries. The EaP CIB program supported reforms of a set of key institutions in the context of the implementation of AA and DCFTA. All Moldavian CIB institutions under cluster 1 implemented reforms regarding the approximation of national legislation in the context of AA. The Ministry of Finance and Public Procurement Agency implemented Twinning projects under CIB founds support. However, the lack of transparency still persists in the public procurement procedures. On the positive side, certain more technical reforms, such as the introduction of e- government, were implemented successfully in Moldova and have led to improvements for the administration and ultimately the population and the economy. But even these technical reforms had some limitations: For example, regarding G2B some institutions and economical agents still use paper invoices rather than e-invoices. E-invoices should have become mandatory in June 2019. However, the Moldavian Parliament postponed a final decision to June 2020 and thereby demonstrated a lack of interest to implement this reform. As a result, corruption still exists, the lack of confidence in developing small businesses persists, and efficiency gains in on public procurement are still not fully realised. In the case of Georgia, the selection of CIB institutions was more effective. In cluster 1, four Georgian institutions were included (see table 5.8). Three of them were the most important state institutions involved in the process of negotiation, collaboration and

262 direct dialogue with the EU (Prime Minister’s Office, Ministry of Foreign Affairs and Office of the State Minister of European and Euro-Atlantic Integration). Apart from the fact that the Ministry of Foreign Affairs and Prime Minister Office were selected as CIB coordinators, all the three institutions were part of the direct dialogue between the Georgian government and the EU. In this way, Georgia has shown its interest in institutional reforms and in progress on the EU integration paths. Institutions in cluster 1 were focused on preparing, negotiating and implementing and monitoring of the relevant agreements between Georgia and the EU. Under the CIB programme, Georgia put a significant emphasis on preparing staff of key state institutions. Apart from the training, and visit studies the Georgian authorities offered a better salary for the civil servants comparative with Moldova. As an example of a successful CIB reform in Georgia, the Civil Registry Agency developed a ‘one-stop-shop’ mechanism through a database that shared secured information within state institutions, and between the public administration and citizens. This considerably improved the reputation of this institution. For cluster 2 in Moldova, justice reform, the selected institutions (see table 4.7) were more suitable than the one under cluster 1. This might be due to the fact that justice reform is a recurrent issue in EU-Moldova since at least the 2005 EU Moldova Action Plan, and therefore considerable preparatory work had occurred on this issue before the start of the CIB. However, the latest EU progress reports on Moldova show that reforms in the justice sector are still unfinished. Despite the reforms implemented by the EU through different instruments, the justice sector in Moldova is still weak. The level of corruption is still high, independence of the justice system is still not assured, and selective justice procedures continue. The Sandu Government took the decision in November 2019 to block the capture of the public prosecutor by the Socialist Party. However, as a result, the government was dismissed. In this way, the reforms for an independent justice were stopped or delayed once again. According to analysts, this can be interpreted as the re-establishment of an undemocratic regime, with characteristics of a captured state, and the continuation of high inter- institutional corruption that has resulted in a persistent weak institutional capacity. Despite a good selection of CIB institutions in this cluster, real reforms were less effective. For instance, the NAC was formally reformed several times, but still remains subordinated to the Government and Parliament.

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In the case of Georgia, all three CIB institutions (see table 5.8) were selected in order to strengthen the process of democratization, good governance and respect of human rights. In this cluster, a success story is the reform of PDO. The PDO was focused on strengthening the rule of law and human rights protection in Georgia by improving the criminal justice sector. Under cluster 3 both countries implemented similar reform concerning the preparation of institutions for the implementation of DCFTA. In the case of Moldova, cluster 3 included seven key institutions. All the institutions pursued institutional reforms through Twinning projects, which allowed them to exchange experience and closely cooperate with similar institutions from EU member states. Moldovan civil servants conducted study visits to EU countries, which allowed them to progress in the approximation of national legislation to EU standards. Reforms under cluster 3 in Moldova were more successful as compared with the other clusters. Partially due to DCFTA implementation, Moldavian exports have increased in the last years. Successes in DCFTA implementation are not caused by the CIB programme alone. However, the CIB program has contributed to the preparation of civil servants for a better implementation of reforms through study visits to several EU member states. The presence of Twinning advisers from EU countries in the respective institutions for a longer period of time (12 months or more) helped as well in the better approximation of legislation to the EU standards. In Georgia, three key institutions were chosen. These institutions were reformed efficiently (see the activities under CIB programme in appendix III). Moreover, Georgia received additional financial assistance from the EU for the Cluster 3 DCFTA. In this regard, the reforms are continuing in these institutions for a better implementation of DCFTA. The decision to select three institutions for this cluster could be considered effective. In this way, the main focus was on reforming these institutions from the ground and as a result to implement and have effective results. Furthermore, for this cluster, Georgia received additional EU funds from 2014 to 2020. Based on the results presented above on the three CIB clusters in Georgia and Moldova, overall it can be said, that the EU CIB program has delivered partial successes in both countries. It was the first programme developed especially for the EaP countries that exclusively targeted institution-building. However, even if the CIB framework document was well thought out, the implementation in practice was not as efficient and effective as

264 expected. In general, it can be argued that the EU did not show sufficient political interest in CIB to make the programme a real success. One reason for its only partial success in both countries was that start of the implementation of the CIB programme was delayed. Especially in Georgia, the start of the CIB programme in key institutions was late because of a lack of experience in preparing their SDP. Even if Moldova, which got off to a quicker start, small bureaucratic details unnecessarily delayed the launch of CIB activities. Another reason for the only partial success of CIB was the slowness of the inter- institutional coordination process in both countries, for preparing and accepting individual CIB projects. In this way, the implementation of CIB projects was extended to long after 2013 (the official term of the ending programme). The political instability influenced as well the implementation of reforms. In 2015 for example, the Government of Moldova changed three times. According to the EU Delegation in Moldova, it was difficult to create an efficient cooperation with CIB ministries, because once the government has changed, each ministry came with a new activity programme that needed to be adopted. In this way, the reforms under CIB program were postponed for CIB institutions in Moldova. In Georgia, as some CIB projects still continue, an official evaluation report was not been published yet. This hypothesis (H2) proved to be partially true. H3. The implementation of the Comprehensive Institution Building Programme showed good results concerning the control of corruption in public institutions in Georgia and Moldova Both countries Georgia and Moldova included the fight against corruption in their CIB clusters. In terms of results however, while Georgia registered a slight increase in its perceived corruption ranking from 2009 to 2018 (with a score of 58th out 100 in 2018), Moldova scored worse (33 out of 100 in the CPI in 2018). According to the CPI 2018, Georgia leads the region Eastern Europe & Central Asia in a group of 19 countries (CPI 2018), while Moldova continues to lag behind its peers. Despite some progress and all the support received through the CIB programme, both countries still have not achieved a decisive sustained victory against corruption. Therefore, through the empirical part of this thesis H3 was falsified. H4. Comprehensive Institution Building key institutions were well selected, which facilitated the implementation of AA including DCFTA

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In the case of Moldova, the selection of CIB key institutions was not very efficient. For cluster 1, neither Parliament nor the Ministry of Foreign Affairs and European Integration (MFAEI) were included in the programme. The selected institutions did not have a good cooperation among them as in the case of Georgia. Under cluster 2, both countries selected relevant institutions. However, in Georgia the CIB institutions showed more ownership for the respective institutional reforms than in Moldova. For cluster 3, Georgia and Moldova selected key institutions responsible for the implementation of DCFTA. Georgia selected only three key institutions here, but the reforms were more targeted than in Moldova (which had selected seven institutions). In Georgia, the EU decided to provide additional funds for CIB reforms that continue until 2020. Therefore H4 can be considered as partially verified, especially for the case of Georgia. H5. Reforming institutions and establishing a new class of well-trained EU oriented civil servants led to a successful implementation of AA including DCFTA. Both countries included in their CIB reforms well-trained civil servants. However, in Georgia, the Government offers better salaries for civil servants as well as professional motivation through participation in trainings, and seminars and visit studies abroad, which offer professional experience and contacts, and (probably most importantly) daily allowances. In Moldova, civil servants have low salaries. Consequently, there is a quick staff turn-over in public institutions, as well as a strong brain drain of the best performing officials. As most civil servants were trained within CIB reforms, afterwards they often changed to private companies, international organisations or migrated to EU countries. This was further facilitated by the fact that many Moldovan citizens also have an EU passport (mainly from neighbouring Romania, with which they share the same language and a long border.) As a result, while in Georgia civil servants are encouraged by both professional and financial motivation to work in public institutions, in Moldova a high turn over of staff remains a problem. The CIB programme was not designed to work on a fundamental public sector salary or compensation reform in both counties, and therefore failed to respond to the specific situation in Moldova that, as mentioned, was especially prone to high staff turnover and brain drain. Therefore, H5 was verified in the case of Georgia but falsified in the case of Moldova. Apart of the main research question and hypothesises explained above, the following secondary research questions remain to answer. What strategies and instruments have been pursued in order to support the democratisation process and in special institution-building?

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The EU has gradually strengthened its relations with Georgia and Moldova over time. The first legal framework, PCA was signed with both countries. The next step was strengthening of cooperation through the EU Moldova Action Plan and the EU-Georgia Action Plan, respectively. The most powerful instrument developed by the EU in cooperation with both EaP countries was the signing of the AA including DCFTA with Georgia and Moldova in 2014. Consequently, both countries have to transpose the EU acquis communnautaire in political, economic and sectorial areas within ten years. All three instruments have had the main goals of strengthening the democratisation process and respect of rule of law, and development of a free economic market. However, the implementation of AA requires reformed and democratic public institutions that are able to implement the necessary provisions in the agreements. For this reason, the CIB program was thought especially for preparing key institutions for implementing the AA. What was the impact of EU involvement through its tools in the Eastern Partnership? Despite many challenges that the region has faced, the EU involvement in the EaP region could be considered as positive. Three out six countries signed in 2014 the EU agreements with the EU. The implementation of the DCFTA has improved economic relations with external partners from the EU side. The DCFTA is going in the right direction in both countries Georgia and Moldova. It also offers a free trade area, which includes elements of a common market, though with a membership perspective. To what extent did the Comprehensive Institution Building Programme play a relevant role concerning Association Agreement and Deep and Comprehensive Free Trade Agreement? The CIB program was intended to enhance the capability of relevant institutions for implementation of the EU agreements AA and DCFTA. It tried to strengthen the institutional framework in the partner countries through institutional capacity building reforms, technical capacities of civil servants and approximation of national legislations to the EU acquis. Referring to Moldova and Georgia, the CIB program has improved the capacity of institutions to undertake the required reforms. Specifically in Moldova, the e- governance developed by the ECG within State Chancellery could be considered the most effective reform (cluster 1). In the case of Georgia, the CIB institutions from cluster 1 (Prime Minister’s Office, Ministry of Foreign Affairs, Office of the State Minister of European and Euro-Atlantic Integration) were well selected and prepared for negotiation, implementation and developed a strong communication and dialog with the EU

267 institutions. The Public Defender’s Office was as well effectively reformed. Under cluster 3, DCFTA, both countries increased the capacity of selected institutions to meet commitments arising from the AAs. However, it is necessary to specify that Georgia selected only three institutions under cluster 3, which proved to be effective for their reform. As a result, Georgia received additional funds under ENI for continuing CIB programme, even after its foreseen end. In the case of Moldova, as seven institutions were selected under cluster 3, the reform efforts proved to be too scattered. The most effective progress was made in approximation of national legislation to the EU standards. Most of institutions prepared Twinning projects under CIB program. Moldova registered good progress after the signing of the DCFTA. Most importantly, the trade between Moldova and the EU grew. It can be assumed that the positive results are due to the Moldavian authorities efforts to reorient away from Russia as the main trade partner. For the time being, the EU has become the country’s leading trade partner, accounting for 68% in 2018, in comparison with CIS reaching 15%. In the case of Georgia, the implementation of DCFTA has had a positive impact on trade as well. Georgian exports to the EU rose and in 2018 accounted for 20,8% of total exports, while CIS countries still accounted for 55,6% of Georgian exports (of which Russia 6,5%). In this respect, both countries continue to make reforms in line with the DCFTA obligations. The process of harmonisation of legislation is expected to be realised between five and ten years after signing of the DCFTA, or even more (Movchan and Shportyuk 2016: 9-10). Has the EU offer a real European perspective for the Eastern Partnership countries in case they implement their Association Agreement, for assuring a space of stability, security, prosperity, credibility and a good neighbourhood on the EU borders? Would this European perspective eventually include full EU-membership? It should not be assumed that after the implementation of the AA and DCFTA the next step from the EU would be the offering of the full EU-membership perspective. Since the launch of the EaP initiative, the EU did not mention this perspective in any joint statement. In one way, can see it as mistake by the EU not to include the perspective of EU membership in the ENP and EaP concepts. As a consequence, both the EU and the EaP countries often lacked the political will to decisively support and to undertake painful reforms. The ‘top-down’ mechanism of Europeanization proved not to be sufficient for the EaP countries. The ‘bottom-up’ mechanism did not work too well either, because the ‘carrot’ of EU membership, as offer for the West-Balkan for example, was missing. Another reason is that the political parties that are supported by Russia as the Socialist

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Party from Moldova for instance, may manipulate the population and elites with the idea that the EU will not open the door for countries from the east. As a result, the citizens are divided into those who want better cooperation with the EU and whose who prefer to develop relations with Russia. In a more realist or cynical view, ‘the EU’s current prudent policy towards its Eastern neighbourhood may not be the reflection of a toothless foreign policy, but rather (…) rationally chosen ‘strategic non-engagement’(Keukeleire and Delreux 2014: 262).

Further research This thesis opens direction for new researches regarding the EU policy on EaP especially with the countries that signed EU Association Agreements (Georgia, Moldova and Ukraine). Firstly, these countries have implemented AA and DCFTA reforms over ten years. In this period, to which extent has AA and DCFTA contributed to the transfer and integration of EU policy into national policy reform transfer in Georgia, Moldova and Ukraine? This is a question that it is worth to further investigate and analyse. Secondly, it is important to examine the role that the EU will take regarding EaP after ten years of implementation. In the decade 2010-2019, the EU was focused mostly on ‘soft’ measures that were promoted in the EAP countries that showed interest to follow a closer path to the EU (Georgia, Moldova and Ukraine). However, in the next decade, the EU should also focus on security dimensions in this region. It is importat to study possible further mechanisms, steps and strategies regarding security policy in the Eastern region. Thirdly, a new EU financial instrument, NDICI, for the next seven-year EU budget 2021-2027 is currently being developed. It foresees the merging of EU support for the neighbouring region with those to other continents such as Africa, Asia and Latin America. It is interesting to analyse to what extent the institution-building approaches deployed in the EaP countries will be applied and further developed in this new EU financial instrument, and if there will be intellectual cross-fertilisation with institution building approaches in/for other regions. Last but not least, there is a need to continue analysing the role of Russia as a regional actor in the Eastern Europe region, and whether only a full EU membership perspective for the EaP countries is sufficient to balance the Russian influence in what both the EU and Russia consider its neighbourhood.

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Final remarks CBI was important, as it was the first comprehensive approach to institution building in the EaP countries. Partial successes were achieved, however it was a little political incentive, as there is no membership perspective. The programme was not sufficiently ambitious, as the key question of comprehensive public sector reform including rise of salaries was not touched. Therefore, high staff turn-over and brain drain (especially was visible in Moldova). CIB was not sufficiently adapted to the local situation: while implementation in Georgia was easier due to stronger reform orientation of the government, in Moldova this political willingness and stability was to a large extent missing. CIB did not take sufficiently into account that public salaries are low, that many Moldovan civil servants hold EU (Romanian) passports and speak at least one EU language, that the country is physically close to the EU, and that therefore there is a high incentive for qualified Moldovan civil servants to leave. It is also not clear how serious the EU was in the declared objectives of CIB (and the overall ENP and EaP political frameworks). The fact that there is no mentioning of EU membership perspective in any ENP/EaP documents in the last decade, and that recently even further advanced countries like North Macedonia have been blocked in their EU ambitions, opens the interpretation that ENP/EaP/CIB are in essence policies of non- engagement rather than of real engagement.

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Security Policy Brussels. Retrieved from https://eeas.europa.eu/sites/eeas/files/2019_association_implementation_report_georgia.pd f [accessed on 19 November 2019]. European Council (1999). Common strategy of the European Union on Russia, Cologne, June 03-04. Retrieved from https://op.europa.eu/en/publication-detail/- /publication/38943c06-7e5d-4ca3-acc3-c5154bd9c04e [accessed on 14 October 2018]. European Council (2019). Eastern Partnership Foreign Ministers meeting, May 13, Brussels. Retrieved from https://www.consilium.europa.eu/en/meetings/international- ministerial-meetings/2019/05/13/ [accessed 01 November 2019]. European Court of Auditors (2010). Is the New European Neighbourhood and Partnership Instrument successfully launched and achieving results in the Southern Caucasus (Armenia, Azerbaijan and Georgia)? Special Report no. 13, Luxemburg. Retrieved from http://www.eu- enprelatedjobs.eu/images/Court%20of%20Auditors%20report%20on%20ENP%20- %20South%20Caucasus.PDF [accessed on 02 April 2019]. European Parliament (2003). Report on ‘Wider Europe – Neighbourhood: A new framework for relations with our Eastern and Southern Neighbours’, Committee of Foreign Affairs, Human Rights, Common Security and Defence Policy, Brussels. European Parliament (2011). Review of the European neighbourhood policy, 2011/2157(INI), Brussels. Retrieved from https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2011/2157 (INI)&l=en [accessed on 05 May 2017]. European Parliament (2017). EU Parliament approves EU financial help for Moldova. Retrieved from http://www.europarl.europa.eu/news/en/press- room/20170629IPR78680/parliament-approves-eu-financial-help-for-moldova [accessed 21 June 2019]. European Parliament (2018). European Parliament resolution of 14 November 2018 on the implementation of the EU Association Agreement with Moldova, (2017/2281(INI)). Retrieved from http://www.europarl.europa.eu/doceo/document/TA-8-2018- 0458_EN.html, [consulted on 21 May 2019]. Official Journal of the EU (2006). Council Decision of 23 January 2006 enabling countries covered by the European Neighbourhood Policy, as well as Russia, to benefit from the Technical Assistance and Information Exchange (TAIEX). Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32006D0062 [accessed on 08 July 2019]. Official Journal of the European Union (2006). Regulation (EC) of the European Parliament and the Council of 26 October 2006 laying down general provisions establishing a European Neighbourhood and Partnership Instrument. Retrieved from https://eur-lex.europa.eu/legal- content/EN/TXT/PDF/?uri=CELEX%3A32006R1638&from=EN [accessed on 10 April 2015]. Official Journal of the European Union (2014). Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part and Georgia, of the other part, L261/1, August 30, Brussels. Official Journal of the European Union (2014). Association Agreements between the European Union and the European Atomic Energy Community and their Member States, of the one part and Moldova of the other part, L 260/4, August 30, Brussels. Official Journal of the European Union (2014). Regulation (EC) of the European Parliament and of the Council of 11 March 2014 establishing a European Neighbourhood Instrument. Retrieved from https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A32014R0232 [accessed on 10 April 2016].

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PAC (1999). Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and Georgia, of the other part - Protocol on mutual assistance between authorities in customs matters - Final Act - Joint Declarations - Exchange of Letters in relation to the establishment of companies - Declaration of the French Government Official Journal L 205, 04/08/1999 P. 0003 – 0052. Partnership and Cooperation Agreements (PCAs): Russia, Eastern Europe, the Southern Caucasus and Central Asia. Retrieved from https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=LEGISSUM%3Ar17002 [accessed on 14 June 2019]. PCA (1998). Partnership and Cooperation Agreement between the European Communities and their Member States and the Republic of Moldova - Protocol on mutual assistance between administrative authorities in customs matters - Final Act - Joint Declarations. Official Journal of the European Communities, L181/3. Retrieved from https://eur-lex.europa.eu/legal- content/EN/ALL/?uri=CELEX%3A21998A0624%2801%29 [accessed on 10 May 2015]. TACIS (2000). Evaluation of TACIS Country Strategy in Moldova: Final Report, Vol. 1. Retrieved from http://www.economistiassociati.com/files/951574_vol1.pdf [accessed on 10 June 2019]. The Lisbon Treaty (2010). Consolidated Reader-Friendly Edition of the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) as amended by the Treaty of Lisbon (2007), third edition 2009. Retrieved from http://en.euabc.com/upload/books/lisbon-treaty-3edition.pdf [accessed 10 November 2019].

Moldavian official documents, legal acts and speeches

AGEPI (2010) Conference on Launching the Twinning Project “Support to Implementation and Enforcement of Intellectual Property Rights in the Republic of Moldova”, financed by the European Union. Retrieved from http://www.agepi.md/ru/node/5061 [accessed on 16 July 2019]. Constitution of the Republic of Moldova (1994). Monitorul Oficial No.1. Retrieved from http://www.presedinte.md/eng/constitution [accessed on 11 March 2020]. Dodon’s speech (2019). Speech by Mr. Igor Dodon, President of the Republic of Moldova, at the UN General Assembly, September 26. Retrieved from (eng). Retrieved from http://www.prm.md/eng/discursuri/a-l-o-c-u-t-i-u-n-e-a-domnului-igor-dodon- presedintele-republicii-moldova-la-adunarea-generala-onu [accessed on 11 March 2020]. Dodon’s speech (2020). Speech delivered by Mr. Igor Dodon, President of the Republic of Moldova, at the ordinary session of the Parliamentary Assembly of the Council of Europe, January 9th. Retrieved from (eng) http://www.president.md/eng/discursuri/d-i-s-c-u-r-s-u-l-domnului-igor-dodon- presedintele-republicii-moldova-la-sesiunea-ordinara-a-adunarii-parlamentare-a- consiliului-europei [accessed on 11 March 2020]. Filip, P. (2016). Discourse after 100 days of activity. Retrieved from https://gov.md/ro/content/discursul-prim-ministrului-pavel-filip-la-prezentarea-raportului- pe-100-de-zile-de-mandat [accessed on 10 June 2019]. Government of RM, E-Governance Agency (2013). Electronic reporting at CNAM (National Health Insurance Company) and CNAS (territorial Social Insurance House) becomes functional. Retrieved from http://www.egov.md/en/communication/news/electronic-reporting-cnam-and-cnas- becomes-functional [accessed on 10 July 2019]. Government of RM, E-Governance Agency. Government for business, retrieved from http://egov.md/en/projects/business [accessed on 10 July 2019].

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Government of RM, MFAEI, Comprehensive Institution Building programme info, retrieved from https://www.mfa.gov.md/ro/content/cib-info [accessed on 04 May 2019]. Government of RM (2005). Government Decision no. 1402 from 30.12.2005. Hotărâre cu privire la aprobarea Strategiei de reformă a administraţiei publice centrale în Republica Moldova. Monitorul Oficial No.1-4, art. no.9. Retrieved from http://lex.justice.md/viewdoc.php?action=view&view=doc&id=314855&lang=1 [accessed on 12 August 2019]. Government of RM (2011). Government Decision no.176 from 22.03.2011. Hotărâre cu privire la aprobarea Metodologiei de elaborare a programelor de dezvoltare strategică ale autorităţilor administraţiei publice centrale. Monitorul Oficial No.46-52, art. no. 210. Retrieved from http://lex.justice.md/md/337935/ [accessed on 10 May 2019]. Government of RM (2012). Government Decision no. 975 from 22.12.2012. Hotărâre privind aprobarea planului de actiuni pe anul 2013 privind implementarea initiativei Guvern fără hârtie. Monitorul Oficial No. 270-272, art. no. 1050. Retrieved from https://www.legis.md/cautare/getResults?doc_id=35151&lang=ro [accessed on 15 May 2019]. Government of RM (2012). Government Decision no.195 from 04.04.2012 on Open Government Action Plan 2012-2013 for the Republic of Moldova. Retrieved from https://www.opengovpartnership.org/wp-content/uploads/2018/11/Moldova_Action- Plan_2012-2013.pdf [accessed on 13 June 2019]. Government of RM (2013). Government Decision no.573 from 06.08.2013. Hotărâre privind aprobarea Strategiei de dezvoltare a managementului finanţelor publice 2013-2020. Monitorul Oficial No.173-176, art. no.669. Retrieved from http://lex.justice.md/md/349108/ [accessed 02 April 2019]. Government of RM (2013). Government Decision no.1096 from 31.12.2013. Hotărâre privind aprobarea Planului de acţiuni de pe anul 2014 pentru implementarea Programului strategic de modernizare tehnologică a guvernării (e-Tranformare). Monitorul Official No.9-13, art. no.10. Retrieved from http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=351125 [accessed on 15 June 2019]. Government of RM (2014). Government Decision no. 170 from 20.02.2014. Hotărâre privind platforma tehnologică guvernamentală comună (MCloud). Monitorul Oficial, No.47-48, art. No.145. Retrieved from http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=351760 [accessed on 16 May 2019]. Government of RM (2016). Government Decision 1432 from 29.12.2016. Hotărâre cu privire la aprobarea Planului de acţiuni pentru o guvernare deschisă pentru anii 2016- 2018. Monitorul Oficial No. 2-8, art. no. 10. Retrieved https://www.legis.md/cautare/getResults?doc_id=97020&lang=ro [accessed on 02 April 2019]. Government of RM (2016). Government Decision no.1332 from 14.12.2016. Hotărâre cu privire la aprobarea Strategiei de dezvoltare a sistemului de achiziţii publice pentru anii 2016-2020 şi a Planului de acţiuni privind implementarea acesteia. Monitorul Oficial No. 459-471, art. no.1442. Retrieved from http://lex.justice.md/md/368482/ [accessed on 12 August 2019]. Government of RM (2016). Government Decision no.191 from 25.02.2008. Hotărâre pentru aprobarea planului de actiuni privind implementarea Strategiei nationale de dezvoltare pe anii 2008-2011. Monitorul Oficial No.42-44, art. no.257. Retrieved from http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=327071 [accessed on 13 April 2019]. Government of RM (2017). Government Decision no. 1150 from 20.12.2017. Hotărâre cu privire la aprobarea Strategiei în domeniul siguranţei alimentelor pentru anii

284

2018-2022. Monitorul Oficial No.18-26, art. no.6. Retrieved from http://lex.justice.md/md/373834/ [accessed on 12 June 2019]. Lavrov’s speech (2007). The present and the future of Global Politics. Retrieved from https://eng.globalaffairs.ru/number/n_8554 [accessed on 02 Nov 2019]. Ministry of Economy and Infrastructure, Digital Moldova 2020, retrieved from https://www.i-policy.org/2013/10/digital-moldova-2020.html [accessed on 15 January 2016]. Ministry of Finance of Moldova (2017). Public Procurement system on a new level. Retrieved from http://pubdocs.worldbank.org/en/586661495278557492/Moldova-13th- PRIMO-Forum.pdf [accessed on 19 May 2019]. Ministry of Finance, MTender, pilot project developed by the European Bank for Reconstruction and Development, Chisinau. Retrieved from http://mtender.gov.md [accessed on 10 July 2019]. Ministry of Justice RM (2011). Strategy for Justice Sector Reform 2011-2015, Executive summary. Retrieved from http://www.justice.gov.md/public/files/file/reforma_sectorul_justitiei/srsj_pa_srsj/SRSJen. pdf [accessed on 12 June 2019]. OGP, Open Government Partnership (2013). Independent Reporting Mechanism: Moldova progress report 2012-2013. Retrieved from https://www.opengovpartnership.org/members/moldova/ [accessed on 21 June 2019]. Parliament of RM (2004). Law no.164 from 15.07.2004. Lege cu privire la documentul electronic şi semnătura digitala. Monitorul Oficial No. 132-137, art. no.710. Retrieved from http://lex.justice.md/md/313061/ [accessed on 12 June 2019]. Parliament of RM (2011). Law no.231 from 25.11.2011. Lege privind aprobarea Strategiei de reformă a sectorului justiţiei pentru anii 2011–2016. Monitorul Oficial No.1- 6, art. no.6. Retreived from http://lex.justice.md/md/341748/ [accessed on 12 June 2019]. Parliament of RM (2011). Parliament Decision no.154 from 21.07.2011. Hotărâre pentru aprobarea Strategiei naţionale anticorupţie. Monitorul Oficial No. 166-169, art. No.483. Retrieved from https://www.legis.md/cautare/getResults?doc_id=17630&lang=ro [accessed on 12 June 2019]. Parliament of RM (2012). Law no.183/2012 from 11.07.2012. Legea concurentei. Monitorul Oficial No. 193-197, art. no.667. Retrieved from http://lex.justice.md/md/344792/ [accessed on 12 June 2019]. Parliament of RM (2012). Law no.113 from 18.05.2012. Lege cu privire la stabilirea principiilor şi a cerinţelor generale ale legislaţiei privind siguranţa alimentelor. Monitorul Oficial No. 143-148, art. no. 467. Retrieved from http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=344007 [accessed on 12 June 2019]. Parliament of RM (2012). Law no.6 from 16.02.2012. Hotărâre privind aprobarea Planului de acţiuni pentru implementarea Strategiei de reformă a sectorului justiţiei pentru anii 2011–2016. Monitorul Oficial No. 109-112, art. no. 371. Retreived from http://lex.justice.md/index.php?action=view&view=doc&lang=1&id=343439 [accessed on 12 June 2019]. Parliament of RM (2017). Decision no.246 from 20.07.2017. Proiectul hotărârii pentru aprobarea Listei ministerelor. Retrieved from http://parlament.md/ProcesulLegislativ/Proiectedeactelegislative/tabid/61/LegislativId/385 0/language/ro-RO/Default.aspx [accessed on 12 June 2019]. Parliament of RM (2019). Proiectul legii cu privire la modificarea Codului Fiscal no.1163/1997 (art.117). Retrieved from http://parlament.md/ProcesulLegislativ/Proiectedeactelegislative/tabid/61/LegislativId/462 2/language/ro-RO/Default.aspx [accessed on 10 July 2019].

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Yeltsin’s speech (1994). Athens 25.06.1994 Retrieved from http://www.hri.org/news/greek/ana/1994/94-06-25.ana.txt [accessed on 10 October 2018].

Georgian official documents, legal acts and speeches

Delegation of the European Union to Georgia (2011). Twinning project: GE-Tbilisi: ENPI — support to the Programme Administration Office in application and coordination of institution building facilities, Twinning reference: 131478, Supplement of the Official Journal of the European Union. Europe Foundation (2016). Food Safety Regulation in Georgia: Assessment of the Government's Reform Efforts in 2016. Retrieved from http://www.epfound.ge/wp- content/uploads/2017/06/2016-SPS-Report-in-English.pdf [accessed on August 2019]. Gabrielashvili, G. (2011). Turning weaknesses into opportunities: case of the Civil Registry Agency. Public service of the future – Combating Corruption, streamlining performance, Chisinau, retrieved from https://www.slideshare.net/E- Gov_Center_Moldova/civil-registry-agency-giorgi-gabrielashvili-eng-as-of-sept-15- 9590426 [accessed on 08 July 2019]. Government of Georgia (2009). Strategy in Standardisation, Accreditation, Conformity Assessment, Technical Regulation and Metrology and programme on Legislative Reform and Adoption of Technical Regulations May 2009-March 2010 prepared by Inter-Agency Working Group for Coordination of Preparatory Issue of a Deep and Comprehensive Free Trade Agreement with the EU under the Commission for the EU Integration of Georgia. Retrieved from http://gov.ge/files/41_32355_330142_TBTStrategy.pdf [accessed on 16 July 2019]. Government of Georgia (2011). The Comprehensive Strategy and Legislative Approximation Programme in Food Safety May 2009-October 2010 prepared by the Inter- Agency working group, the Development of Food Safety System in Georgia under the Commission for the European Integration. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/Food%20Safety%20Strategy.p df [accessed on 16 July 2019]. Government of Georgia (2014). Governmental Decree on the measures for effective implementation of the Association Agreement including the Deep and Comprehensive Free Trade Agreement between Georgia and the European Union, February 07. Retrieved from https://matsne.gov.ge/en/document/view/2250269?publication=0 [accessed on 17 August 2019]. Government of Georgia (2017). Working Plan of the Ministry of Agriculture of Georgia and the United States Department of Agriculture and the Bulgarian Food Safety Agency. Retrieved from https://mepa.gov.ge/En/Files/ViewFile/1463 [accessed on 13 July 2019]. IRP, Institutional Reform Plan (2012). Institutional reform plan on Association Agreement Coordination, Visa and Migration Issues Cluster: Ministry of Foreign Affairs of Georgia, Office of the State Minister of Georgia on European and Euro-Atlantic Integration, Office of the Prime Minister of Georgia. Ministry of Economy and Sustainable Development of Georgia (2014). Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2014. Annual report. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/2014%20Annual%20Report.p df [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2014). DCFTA Action Plan implementation 2014 -2017. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/Action%20Plan%20for%20th

286 e%20Implementation%20of%20DCFTA%202014-2017.pdf [accessed on 19 November 2019]. Ministry of Economy and Sustainable Development of Georgia (2015). Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2015. Annual report. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/2015%20Annual%20Report.p df [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2016). Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2016. Annual report. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/2016%20ANNUAL%20REP ORT.pdf [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2017). Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2017. Annual report. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/EN_%20Report_2017_DCFT A.pdf [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2018). Report on the Implementation of the DCFTA Implementation National Action Plan for 2018. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%202018%20Report. pdf [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2018). DCFTA Action Plan implementation 2018. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%202018%20Nationa l%20Action%20Plan.pdf [accessed on 20 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2019). First Quarter Report on the Implementation of the DCFTA Implementation National Action Plan for 2019. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%20AP%202019%20 Q1%20ENG.pdf [accessed on 21 August 2019]. Ministry of Economy and Sustainable Development of Georgia (2019). DCFTA Action Plan implementation 2019. Retrieved from http://www.dcfta.gov.ge/public/filemanager/implimentation/DCFTA%202019%20Action %20Plan.pdf [accessed on 19 November 2019]. Ministry of Foreign Affairs of Georgia (2015). The European Commission has published its fourth and final progress report on Georgia’s implementation of the Visa Liberalisation Action Plan (VLAP), Tbilisi. Retrieved from https://ec.europa.eu/homeaffairs/sites/homeaffairs/files/e-library/documents/policies/international- affairs/general/docs/fourth_report_georgia_implementation_action_plan_visa_liberalisatio n_en.pdf [accessed on 19 November 2019]. Parliament of Georgia (2001). Georgia: Country Strategy Paper Georgia 2002 – 2006. National Indicative Programme 2002-2003. Retrieved from http://www.parliament.ge/files/491_6279_747326_NIP-2002-2003.pdf [accessed on 10 July 2018]. Parliament of Georgia (2018). Action plan of the Committee on European Integration of the Parliament of Georgia. Retrieved from http://www.parliament.ge/uploads/other/85/85953.pdf [accessed on 18 August 2019]. Parliament of Georgia (2018). Action Plan of the Healthcare and Social Issue Committee of the Parliament of Georgia 2017-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/81370/Health_AP_Eng [accessed on 18 August 2019].

287

Parliament of Georgia (2018). Committee on Environmental Protection and Natural Resources of the Parliament of Georgia. Committee strategy and action plan 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/108828/Env_Strategy_and_AP_Eng [accessed on 18 August 2019]. Parliament of Georgia (2018). Committee on Sports and Youth Affairs of the Parliament of Georgia. Strategy and Action Plan for 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/91312/SYC_Strategy_Plan_Eng [accessed on 18 August 2019]. Parliament of Georgia (2018). Foreign Relation Committee. Strategy and Action Plan 2018-2020, retrieved from http://www.parliament.ge/ge/ajax/downloadFile/108826/For._Rel_._Committee_AP_ Eng [accessed on 18 August 2019]. Vashakidze, G. (2016). One stop shop public service delivery model: The case of Georgia. Regional hub of civil service in Astana, UNDP.

List of interviews

Delegation of European Union to Moldova, Mr. Rodriguez Ruiz Jordi, Project Manager, September 09, 2016, Chisinau, Moldova. European Commission, Former Program Manager, RP Neighbourhood East & Russia, Directorate General DEVCO, December 10, 2018, Katowice, Poland. Ministry of Economy and Infrastructure, Department Economic Development Project, September 08, 2016. Ministry of Finance, Public Internal Financial Control Policy Division, September 08, 2016, Chisinau, Moldova. Public Defender Office, Ms. Natia Katsitadze, First Deputy Public Defender, November 25, 2016, Tbilisi, Georgia. State Chancellery, Central Public Administration Reform Division, September 09, 2016, Chisinau, Moldova. State Chancellery, Mr. Ion Gumene, former Head of the Policies Coordination and Strategic Planning Division, Department of Policies, Foreign Aid Coordination and Central Public Administration Reform, July 01, 2016, Chisinau, Moldova. State Chancellery, Mr. Valentin Croitoru, Head of Monitoring and Evaluation Division, September 06, 2016, Chisinau, Moldova. State Chancellery, Ms. Lucretia Ciurea, Head of the Aid Coordination Unit, Department for Policies, Strategic Planning and External Assistance at the State Chancellery, July 01, 2016, Chisinau, Moldova.

Reports

Abdullayeva, A. (2016). ‘Azerbaijan’ in J. Lovitt Civil Participation in Decision Making in the Eastern Partnership Countries Part One: Laws and Policies, Programmatic Cooperation Framework for Armenia, Azerbaijan, Georgia, Republic of Moldova, Ukraine and Belarus. Retrieved from https://rm.coe.int/168065755a [accessed on 15 November 2019]. Albuquerque, A.L. and Hedenskog, J. (2016). Moldova A Defence Sector Reform Assessment, Report No.4350, Swedish Defence Research Agency.

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Policy papers

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Litra, L. (2011) The EU’s Conditionality in the Case of Moldova 2001-2009 Failure of Success? SPES Policy Paper Institute fur Europaische Politik. Retreived from http://iep- berlin.de/en/wp- content/uploads/sites/2/2014/09/The_EUs_Conditionality_in_the_Case_of_Moldova_LEO NID_LITRA.pdf, [accessed on 09 July 2016]. Litra, L. and Popescu, N. (2012). Transnistria a bottom up solution, European Council on Foreign Relations. Retrieved from https://www.files.ethz.ch/isn/173479/ECFR63_Transnistria_Brief_AW.pdf [accessed on 12 July 2019]. Lynch, D. (2004). Russia’s strategic partnership with Europe, Institute for Security Studies. Retrieved from https://www.iss.europa.eu/sites/default/files/EUISSFiles/analy077.pdf [accessed on 19 May 2019]. Made, V. (2011). From Prague to Warsaw: a Study of Eastern Partnership’s Rhetoric in the Context of EU Membership Perspective from 2009-11, Eastern Partnership Review, No.7, Estonian Centre of Eastern Partnership. Mainwarning, S. (1989). Transition to democracy and democratic consolidation: theoretical and comparative issues, working paper, No.130, November. Marandici, I. (2011). ‘Moldova’s Neutrality: What is at Stake?’ in Quo Vadis, Moldova? European Integration Centre (Lithuania) and Institute for Development and Social initiative ‘Viitorul’ (Chisinau). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1262561 [accessed on 11 March 2020]. Munck, G.L. (1996). Disaggregating political regime: conceptual issues in the study of democratization, working paper, No.228, The Helen Kellogg Institute for International Studies, University of Notre Dame. Murray, R. (2015). European Neighbourhood Policy Review 2015, Policy Digest No.14, Vienna. Retrieved from http://www.trialog.or.at/images/doku/enp_review_policy_digest_final.pdf [accessed on 11 July 2017]. Penkova, T. (2012). ‘EU Eastern Partnership Policy: a Second Chance for the EU Transformative Power’? In C. Frappi and G. Pashayeva (eds.) The EU Eastern Partnership: common framework or wider opportunities? EU Azerbaijan perspectives on Cooperation, ISPI, EGEA. Penkova, T. (2014). The Vilnius Summit and Ukraine’s revolution as a benchmark for EU Eastern Partnership policy, Analysis No. 240, ISPI. Retrieved from https://www.ispionline.it/sites/default/files/pubblicazioni/analysis_240__2014.pdf [accessed on 06 Novemebr 2018]. Picciotto, R. and Wiesner, E. (eds.) (1998). Evaluation & development: the institutional dimension. World Bank series on evaluation and development, Vol.1. New Jersey, USA: Transaction Publishers. Retrieved from http://documents.worldbank.org/curated/en/650001468770389162/Evaluation- development-the-institutional-dimension [accessed on 05 July 2015]. Rahman, K. (2017) Moldova: overview of corruption and anti-corruption with a focus on the healthcare and procurement sectors, U4 Expert answer, Anti-Corruption Resources Centre, Transparency International Moldova, CHR Michelsen Institute. Rinnert, D. (2011). The Eastern Partnership in Georgia: Increasing efficiency of EU Neighbourhood Policies in the South Caucasus, German Institute for International and Security Affairs, Working Paper FG 5, No.1, March, SWP Berlin. Secrieru, S. (2010). Russia’s Mainstream Perceptions of the EU and its Member States, SPES, policy paper, Institut für Europäische Politik. Retrieved from

304 https://www.ssoar.info/ssoar/bitstream/handle/document/39496/ssoar-2010-secrieru- Russias_mainstream_perceptions_of_the.pdf?sequence=1&isAllowed=y&lnkname=ssoar- 2010-secrieru-Russias_mainstream_perceptions_of_the.pdf [accessed on 11 October 2019]. Secrieru, S. (2016). Transnistria Zig-zagging towards a DCFTA, Policy Paper, No.4(145), PISM. Sekarev, A. and Keskus, E.I. (2011). Medium-term trade flows between EU27 and EaP6: what trends are visible? Eastern Partnership Review, No.10, Estonian Centre of Eastern Partnership. Sekarev, A. et ell (2016) Co-ordination of European integration in Georgia in European integration co-ordination arrangements in AA/DCFTA implementing countries: Georgia, Moldova and Ukraine. Policy brief Nr. 23, February, Tallinn Estonian Centre of Eastern Partnership. Tabarta, I. (2019). From Bratislava to Bratislava – the regulation process of the Transnistrian conflict is sliding back to years 2002-2003, Bulletin Power, Politics & Policy, No.2 December, IDIS Viitorul. Retrieved from http://www.viitorul.org/files/BULLETIN_Power%2C%20Politics%26Policy_IDIS_nr.2_E ng.pdf [accessed on 27 February 2020]. Tulmets, E. (2011). Institutions Building Instruments in the Eastern Partnership: Still Drawing on Enlargement? Eastern Partnership Review No.6, Estonian Centre of Eastern Partnership. Tuohy, E. and Schaper, E. (2016). A new ENP for a new Europe: Revising the European Neighbourhood Policy in Light of the 2008 Russo-Georgian War and the 2014 Ukraine Crisis, Eastern Partnership Review, No.25, Estonian Centre of Eastern Partnership. Turk, Z (2014) Central and Eastern Europe in transition: an unfinished process? Wilfred Martens Centre for European Studies. Wammen, N. (2013). Enlargement remains a driver of change, in The Copenhagen Criteria and the Enlargement of the European Union, Conference report, Copenhagen May, 14. Wolczuk, K. (2011). Perceptions of, and attitudes towards, the Eastern Partnership amongst the Partner Countries’ Political Elites, Eastern Partnership Review, No. 5, Estonian Centre of Eastern Partnership. Zarembo, K. and Litra, L. (2019). ‘Ukraine new engines for the partnership’ in S. Secrieru and S.Saari The Eastern Partnership a decade on looking back, thinking ahead, European Union Institute for Security Studies, Chaillot Paper, No.153.

Think tank research

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Websites

Commissioner Enlargement and ENP – http://ec.europa.eu/archives/commission_2010- 2014/fule/index_en.htm DEVCO – EuropeAid – http://ec.europa.eu/europeaid/index_en.htm DG ENP and Enlargement. TAIEX, European Commission – https://ec.europa.eu/neighbourhood-enlargement/tenders/taiex_en DG ENP and Enlargement. Twinning and Sigma, European Commission – https://ec.europa.eu/neighbourhood-enlargement/neighbourhood/neighbourhood- wide/twinning-taiex-and-sigma_en Eastern Partnership Civil Society Forum – http://eap-csf.eu/en/home/ EEAS - EU Relation with South Caucasus Countries – http://eeas.europa.eu/south_caucasus/index_en.htm E-Governance Agency, Moldova http://www.egov.md/en ENPI Info Centre – http://www.enpi-info.eu/ Estonian Centre of Eastern Partnership – http://eceap.eu/en/center/ EU External Action Service – http://eeas.europa.eu EU Monitoring Mission in Georgia – http://www.eeas.europa.eu/csdp/missions-and- operations/eumm-georgia/ European Commission, E-library – http://ec-europa-finder.hosted.exlibrisgroup.com/ European Neighbourhood and Partnership Instrument Funding 2007-2013 – http://www.eu-enprelatedjobs.eu/images/Enpi_figures_en.pdf European Neighbourhood Policy and Enlargement Negotiations – http://ec.europa.eu/enlargement/index_en.htm European Parliament – http://www.europarl.europa.eu/news/public/default_en.htm European Politics, Policy, Government News – http://www.politico.eu/ Expert-Group, Moldova Budget stories http://www.budgetstories.md/ Open Government Partnership, Georgia Budget monitor https://budgetmonitor.ge/en ProAid Ukraine, Official portal for international assistance coordination – http://proaid.gov.ua/en/pages/1 Public Services Portal, Moldova https://servicii.gov.md/default.aspx SIGMA – http://www.sigmaweb.org/ TAIEX – http://ec.europa.eu/enlargement/tenders/taiex/

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TWINNING http://ec.europa.eu/europeaid/where/neighbourhood/overview/twinning_en.htm

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List of tables

Table 1.1 Three stages of Europeanization Table 2.1 ENPI bilateral assistance for Georgia Table 2.2 ENPI bilateral assistance for Moldova Table 2.3 ENI financial support for EaP countries Table 2.4 Financial EU allowance for the EaP countries Table 3.1 TAIEX Projects in the ENP countries between 2007-2017 Table 3.2 The EU agreements with the EaP countries Table 3.3 The CIB Programme in the EaP-countries Table 3.4 Principal clusters of CIB Programme in Armenia Table 3.4 Principal clusters of CIB Programme in Azerbaijan Table 3.6 Principal clusters of CIB Programme in Georgia Table 3.7 Principal clusters of the CIB Programme in Moldova Table 3.8 Principal clusters of CIB Programme in Ukraine Table 3.9 SWOT analyse of the CIB programme Table 4.1 TACIS Allocation by sectors 1995-1999 (EUR /million) Table 4.2 Economic and political transformation in Moldova 2006-2018 Table 4.3 CIB financial allocation in Moldova 2011-2013 Table 4.4 CIB in Moldova in 2011 Table 4.5 CIB in Moldova in 2012 Table 4.6 CIB in Moldova in 2013 Table 4.7 CIB institutions and Non-CIB Institutions Table 5.1 EU assistance in Georgia 1992 - 2000 Table 5.2 EU allocation in Georgia by year (1992-2000) Table 5.3 Economic and political transformation in Georgia 2006-2018 Table 5.4 The CIB allocation in Georgia 2011-2013 Table 5.5 Georgia AAP for CIB 2011 Table 5.6 Georgia AAP for CIB 2012 Table 5.7 Georgia AAP for CIB 2013 Table 5.8 CIB institutions in Georgia Table 5.9 CIB institutions and the AA/DCFTA responsibilities Table 5.10 The main challenges that persisted in the Parliament activities in Georgia in 2013 Table 5.11 DCFTA Activities – Sanitary and Phytosanitary measures /Ministry of Agriculture/ NFA 2014-2017 Table 5.12 DCFTA Action Plan 2018-2019 Table 5.13 DCFTA Action Plan – Ministry of Economy and Sustainable Development (MESD) / GEOSTM 2014-2017 Table 5.14 The public perception towards ombudsman institutions in Georgia Table 5.15 Rank of Georgia among countries worldwide regarding the perception of different Rule of Law indicators Table 5.16 Public perceptions of the court system in Georgia 2009-2017 (%)

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List of figures

Figure 2.1 ENPI 2007-2013 (in EUR/million) Eastern dimension Figure 3.1 Number of Twinning, TAIEX, SIGMA projects in the ENP East region 2004- 2009 Figure 3.2 Twinning projects in ENP countries: 2010-2017 Figure 3.4 Funding for individual EaP countries (%) 2010-2017 Figure 3.5 SIGMA projects within EaP countries Figure 3.6 CIB financial assistance for the EaP countries (EUR/million) Figure 4.1 Moldova: freedom in the world 1999-2018 Figure 4.2 EUI Democracy index in Moldova 2006-2018 Figure 4.3 The economic freedom in Moldova (1999-2018) Figure 4.4 E-Government Index provided by the UN (2010-2018) Figure 4.5 E-participation citizens in Moldova (2010-2018) Figure 4.6 The level of confidence in the public procurement system Figure 4.7 The efficiency of the public procurement system Figure 4.8 Public trust in justice system in Moldova 2009-2018 Figure 4.9 Corruption Perception Index in Moldova 2009-2018 Figure 4.10 Moldavian exports to the EU, CSI and Russian Federation (thousand USD) Figure 4.11 Moldavian imports from the EU, Russian Federation and CSI countries (thousand USD) Figure 5.1 Freedom in the World: Georgia 1999-2018 Figure 5.2 EUI Democracy index in Georgia 2006-2018 Figure 5.3 The economic freedom in Georgia (1999-2018) Figure 5.4 Public attitudes in Georgia on Offices of Ombudsman April 2014 Figure 5.5 Public attitudes in Georgia on Offices of Ombudsman April 2019 Figure 5.6 Rank of Georgia among countries worldwide regarding the perception of E- Governance Figure 5.7 E-participation Index in Georgia 2010-2018 Figure 5.8 Rank of Georgia among countries regarding the perception of E-participation Figure 5.9 Corruption Perception Index in Georgia 2009-2018 Figure 5.10 Georgian exports in 2009-2018 (thousand USD) Figure 5.11 Georgian imports in 2009-2018 (thousands USD)

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List of boxes

Box 3.1 Key challenges in the CIB institutions Box 4.1 Expected results under CIB reform Cluster 1 Box 4.2 Expected results under CIB reforms Cluster 2 Box 4.3 Expected results under CIB reforms Cluster 3 DCFTA Box 5.1 CIB Reforms in Georgia under Cluster 1 Box 5.2 Expected results of the PDO project Box 5.3 The reforms of the Georgian Parliament under CIB Box 5.4 The Georgian achievements on the Open Government Partnership Box 5.5 The CIB achievements of the Georgian Parliament Box 5.6 CIB – DCFTA results (2012-2015)

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Appendices

Appendix I

Table A Moldovan exports 2009-2018 (USD thousand) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total 1282981 1541487 2216815 2161880 2428303 2339530 1966837 2044611 2424972 2706173

CIS 490415.2 624003.2 919265 928119.5 923219.8 735647.7 492294.6 414185.3 462820.5 415922.3 countries

..Russian 286491.6 403978.4 625509.4 655132 631931.5 423717.6 240648.6 233177.4 254534.8 218571.1 Federation

European 667338.5 728938.9 1083006 1013418 1137286 1245980 1217587 1331898 1596840 1861864 Union countries (EU-28)85

Source: Compilation by the author using data from the National Bureau of Statistics of Moldova.

Table B Moldovan imports 2009-2018 (USD thousand) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total 3278270 3855289 5191271 5212928 5492393 5316959 3986820 4020357 4831335 5760057

CIS 1141783 1256852 1713416 1623721 1672308 1449246 1018111 1027442 1206052 1449079 countries

..Russian 374512.8 586477.3 822961 816882.1 788040.5 717220.6 535691.1 535201.1 571704.2 720656.6 Federation

European 1421186 1704240 2256292 2318614 2472112 2567695 1954251 1973712 2389160 2850800 Union countries (EU-28)86

Source: Compilation by the author using data from the National Bureau of Statistics of Moldova.

85 From 2013 – 28 EU Member States 86 From 2013 – 28 EU Member States 314

Appendix II

Table F DCFTA CIB activities and results in Georgia CIB Year CIB Results Institution

MoAgr/NFA 2017 In the frame of the support to the legislative approximation activity, in 2017 Comprehensive Institution Building (CIB) Programme has organized following:

On 18th January 2017, CIB international expert advised NFA inspectors on observed contradictions during inspections of a large Georgian meat processing and retail companies;

On 20th February 2017, CIB International experts provided practical examples of the EU requirements for developing the Georgian residue monitoring plan for the NFA veterinary and inspection staff;

In March 2017, CIB International expert gave recommendations for NFA veterinary department on planning for monitoring of chemical residues and microbial contamination of products of animal origin and a brief summary for the NFA food and veterinary departments on legal requirements for importing hides and skins and queen bees and non-food apiculture products from third countries to the EU;

On April 19-21, 2017, CIB supported three-day training for Food Safety Department Inspectors in Tbilisi. The topic of the training was the FSSC 22000 Food Safety System Certification. A scheme is an advanced approach to food safety management systems and consists of ISO 22000:2005 and ISO/TS 22002- 1:2009. The training session was attended by 15 food safety experts and inspectors representing NFA HQ and regional offices. The training was delivered by international expert of International Finance Corporation (IFC);

Veterinary Working Group held a meeting in the framework of the approximation of Georgian legislation with the relevant EU legislation which was organized on the 21st of April 2017. Working Group Members have reviewed and discussed Council Directive 2006/88/EC, as of 24 October 2006, “Animal health requirements for aquaculture animals and products thereof, and on the prevention and control of certain diseases in aquatic animals”;

In the frame of legislation approximation activity, CIB Programme organized Inception meeting of the food safety group on April 28, 2017, at the NFA premises. The Group discussed Regulation (EU) No 609/2013 of the European Parliament and of the Council of 12 June 2013 on food intended for infants and young children, food for special medical purposes, and total diet replacement for weight control and repealing Council Directive 92/52/EEC, Commission Directives 96/8/EC, 1999/21/EC, 2006/125/EC and 2006/141/EC, Directive 2009/39/EC of the European Parliament and of the Council and Commission Regulations (EC) No 41/2009 and (EC) No 953/2009. During meeting CIB experts and the members of the working group discussed main issues of above-mentioned directives what they will take into account while working on relevant Georgian legislation;

During 1-5 May, 2017 CIB supported study tour of the MoA/ NFA Veterinary Working Group (VWG) members in Estonia to gain hands-on experience in practical matters while developing EU equivalent (EU Regulations 1069/2009, 1774/2002 and 142/2011) Georgian legislation on animal by-products not intended for human consumption, especially on the aspects of implementation of legislative

315 requirements;

In the frame of the support to the legislative approximation activity, Comprehensive Institution Building (CIB) Programme organized the inception meeting of the food safety legislative approximation working group on May 23, 2017, at the National Food Agency. The WG members – representatives of Ministry of Agriculture, Ministry of Health, Labour and Social Affairs, National Food Agency, discussed Regulation (EC) No 1935/2004 of the European Parliament and of the Council of 27 October 2004 on materials and articles intended to come into contact with food and repealing Directives 80/590/EEC and 89/109/EEC. Discussed topics included, key elements of the regulation, general purpose, special provisions for materials intended to come into contact with food, authorization procedures, labelling, compliance and traceability, protection and execution provisions and experience in execution;

Comprehensive institutional building program (CIB) international expert conducted inception training on regulation 1251/2008, implementing Council Directive 2006/88/EC as regards conditions and certification requirements for the placing on the market and the import into the Community of aquaculture animals and products thereof and laying down a list of vector species;

During 14-16 June 2017, In the frame of the support to the legislative approximation activity, Comprehensive Institution Building (CIB) Programme organized veterinary working group meeting with the Ministry of Environment and Natural Resources Protection in Kachreti. Discussed were EU Regulations 1069/2009, 1774/2002 and 142/2011. The meeting was attended by 15 members of the working group and Comprehensive Institution Building Program international advisors;

CIB organised awareness campaign regarding swine diseases and its prevention, legislative side and artificial insemination in Telavi, Kakheti region (6-7 July 2017) and Adjara and Guria regions (12-14 July 2017). At the meeting attended by 130 participants: farmers, NFA regional staff and other stakeholders;

With the support of CIB, in Tbilisi (10-12 July 2017) and Kutaisi (13-15 July 2017), trainings were conducted for the staff on National Food Agency of Ministry of Agriculture of Georgia on international certification scheme FSSC 22000. Training was attended by 42 representatives of the regional offices of NFA. The training was conducted by the international expert of International Finance Corporation;

On August 1-4, 2017, CIB facilitated roundtable with the participation of the representatives of the Food Safety Department of the NFA and Customs Administration of the Revenue Service. This meeting was follow up of the previous one, which was held on 29-30 June 2017. Within the Roundtable the discussion continued on proposal of amendments to the current veterinary monitoring plan at the BIPs and other topics, which included (i) Sampling Methodology for Laboratory Testing of Animal Origin Food, (ii) appropriateness of withholding certain category of food products at the BIPs until laboratory analysis results are available, (iii) Requirements of Governmental Decree # 567 from December 23, 2017 on “Border control regulation of non-animal origin food/feed.”

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On September 18-20 of 2017, Georgia hosted 1st West Eurasia FMD Epidemiology and Laboratory Network Meeting on GF-TADs (global framework for the progressive control of transboundary animal diseases). The meeting was funded by OIE, FAO and co-founded and organized by CIB;

On September 21st of 2017, CIB international expert Hendrik Kuusk conducted training for feed union of veterinary department regarding – Commission Regulation (EC) NO 152/2009 of 27 January 2009 laying down the methods of sampling and analysis for the official control of food and Regulation (EC) NO 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition;

With the support of CIB programme the Capacity building study tour for the representatives of National Food Agency on Fish and Fishery products’ official control and regulations in EU was conducted in Latvia, on 25- 28.09.2017;

During October 16 – 25 of 2017, CIB supported NFA to organize trainings for food inspectors about Meat and Meat Products Production Technology. Trainings topics consisted of meat and meat products production technology, and biological, chemical and physical hazards; Indra Urbonavičiūtė, Senior Veterinary Inspector at SFVS delivered the Training. Trainings were held in Tbilisi, Kutaisi and Batumi; there were attending 40 specialists and inspectors from NFA, from Tbilisi and regional offices.

From October 26 through November 4, CIB supported NFA to organize trainings for food inspectors on Milk and Dairy Production Technology. Training was attended by 40 specialists and inspectors from NFA, Tbilisi office and regional divisions.

During November 6-15, CIB supported NFA to organize trainings for NFA inspectors in inspection of food service enterprises. Trainings were held in Tbilisi, Kutaisi, and Batumi. Trainings were attended by 40 specialists and inspectors from NFA, Tbilisi office and regional divisions.

On November 9, CIB international expert Hendrik Kuusk and a veterinary expert Marika Bokuchava carried out training of the NFA Veterinary Department on feed regulations (152/2009 and 1831/2003).

MoAgr/NFA 2018 By organizing a Comprehensive Institution Building Programme (CIB):

An expert from Food and Veterinary Service of Latvia conducted 3 trainings for the inspectors of NFA Food Safety Department, on following topics: - “Food products of non-animal origin” − training conducted on January 8-13, 2018, in Tbilisi and Kobuleti. 28 inspectors participated in this event.

“Providing Information to Consumers about Food” - in line with EU Regulation 1169/2011. Trainings were held in Tbilisi and Kutaisi on March 13 and March 15, respectively. 41 inspectors took part in the training.

“On Microbiological Criteria for Foodstuffs” – in accordance with EU Regulation 2073/ 2005. The training took place on March 21 and March 22, in Tbilisi and Kutaisi, respectively. 41 inspectors have participated in this training.

In mid-February 2018, a first roundtable meeting was held regarding the development of a risk analysis system. Representatives from NFA, SRCA, LMA as well as from the Customs Department took part in the meeting.

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At the end of March 2018, during the second roundtable meeting on the development of risk analysis system, in the framework of which CIB food safety expert gave presentation on the current state of risk analysis in Georgia with an emphasis on existing gaps. CIB Programme Advisor presented to the audience approaches employed by EU member countries for hazard exposure assessment.

On February 13, 2018, CIB Programme experts trained 10 representatives of the MEPA and NFA on Council Directive 2002/99/EC, shared EU experience in implementing this Directive and provided guidance on import requirements and EU rules on food hygiene as well as official food controls.

On May 1, 2018, representatives of MEPA and NFA participated in a Flexibility Workshop organized by the World Bank Group, where the flexibility of EU food legislation as well as various examples of EU countres and HACCP systems were discussed.

On February 20, 2018, CIB Programme advisor, along with a veterinary expert, chaired the meeting, which was organized within the framework of the National Animal Health Programme (NAHP) on the veterinary system assessment tool – “Effectiveness of Veterinary Services (PVS) in Georgia”.

On February 26-27 and March 1-2, 2018, NFA Veterinary Department organized simulation exercises on African Swine Fever (ASF) in Kakheti (Kvareli) and RachaLechkhumi (Ambrolauri) Regions. Two-day events at each location consisted of a theoretical component and field trainings. In total, 30 veterinarians participated in these trainings;

On April 28, 2018, EU-funded CIB programme supported NFA to celebrate World Veterinary Day. A report was presented on the activities performed by the Veterinary Department and a veterinary dictionary along with an information brochure, jointly developed by the employees of the Agency and veterinary scientists, were presented and handed out to participants. The meeting was attended by various veterinary and animal husbandry associations, scientists, students and other interested parties;

In June 2018, the EU-funded CIB Phase III Programme facilitated a working group meeting on legislative approximation with regards to the Regulation (EU) N576/2013 of the European Parliament and of the Council of 12 June 2013 on noncommercial movement of pet animals and Regulation (EU) N1152/2011 of July 2011 on Prevention Health Measures for the Control of Echinococcus multilocularis Infection in Dogs. 13 specialists representing NFA, RS and SRCA have participated in the discussion.

On April 26-28 of 2018, a working group meeting on the “Development of Institutional Committees of Animal Use and Care System in Georgia: Facts and challenges” was organized in Borjomi by the US Disease Control and Prevention Center. Animal welfare issues within the context of laboratory animals were discussed. Employees of the Veterinary Department took part in the mentioned meeting.

On April 16-20 of 2018, with the initiative of the International Atomic Energy Agency and involvement of the National Food Agency, a regional working group meeting was held on the diagnostics for vector-borne diseases and development strategies for strengthening differentiation. This meeting was attended by the representatives of NFA and SRCA, as well as experts and participants from countries of Central and Eastern Europe and West Asia (32 participants in total). At the meeting, the distribution of vectors, the methods for their typological identification, diseases borne from them, their spread required control measures

318 and diagnostics methods were discussed.

From May 28 to June 1 of 2018, BTSF held a regional working group meeting on Avian Influenza in Tbilisi. Meeting was attended by the representatives from Georgia, Azerbaijan and Armenia. Experts invited by BTSF headed the meeting. Participants discussed the global state of Avian Influenza, biosafety principles, farm biosafety and principles for surveillance of Avian Influenza in domestic and wild birds, effective control measures, vaccination and strategic planning. Group meetings were held on biosafety, surveillance of domestic and wild animals, control mechanisms and raising awareness.

In May 2018, within the framework of EU funded CIB Phase III Programme, a training was held jointly with the FAO Locust Project, for NFA Plant Protection Department specialists on following topics: locust monitoring, locust development stages, control measures, application of GIS to track locust movement and mapping.

At the end of May 2018, within the framework of the EU-funded CIB Phase III Programme, a Plant Protection Legal Approximation Working Group (PPWG) meeting was organized to discuss draft legislation on the procedures for marketing materials for vegetable propagation (other than seeds) and planting. The participants included representatives from MEPA, NFA, LMA, SRCA, CIB, and the private sector (nurseries).

In May, within the framework of EU funded CIB Phase III Programme, NFA Plant Protection Department specialists conducted a simulation exercise directed against the locust in the regions for new employees, concerning, in particular, the application of the GIS and use of pick-up truck mounted spraying equipment. 18 specialists participated in this exercise, including 16 men and 2 women.

On 6-7 August, a training was held by Latvian experts for the employees of the NFA Food Safety Department and Tbilisi City Service in Tbilisi and on 9-10 August in Kutaisi − for the employees of NFA Regional Division, on HACCP for food of animal origin. 38 inspectors took part in the training, including 27 women and 11 men.

On 17-19 September, a training was held in Anaklia by an Italian expert, for the employees of the Food Safety Department, Tbilisi City Service and Regional Divisions of LEPL National Food Agency on EU requirements, HACCP system and audit in the hazelnut sector. 20 inspectors, including 12 women and 8 men, attended the training.

On 24-27 September, an Italian expert in Tbilisi held a training for the employees of the Food Safety Department, Tbilisi City Service and Regional Divisions of LEPL National Food Agency on EU requirements, HACCP system and audit in the mineral water sector. 21 inspectors, including 10 women and 11 men, attended the training.

On 25-26 September, the CIB Programme supported the EU-funded animal byproduct management and control project in order to launch its activities and organize a workshop for regional veterinarians in accordance with the EU legislation on the regulation, management and control of animal byproducts.

On 7-9 August 2018, NFA was assisted in the organization of a working meeting concerning the draft GoG Decree on the Approval of Rules on Registration, Production, Authorization and Control of Veterinary Medicinal Products. The CIB programme presented main requirements of the EU Directives 2001/82, N2004/28 and Regulation N470/2009 as well as their implementation in practice by sharing EU experience. In total, 13 specialists attended the workshop, including 10 women

319 and 3 men.

From October 22 to November 6, NFA Food Safety Department organized the second round of trainings in West Georgia for food inspectors on wine, mineral and drinking water producing enterprises. Trainings held in Kutaisi and Kobuleti by an Italian expert included the following topics:

1. Water supply system and constituent elements, water treatment, water safety plan, and EU legislation on drinking water.

2. Prerequisite programmes, Hazard Analysis and Critical Control Points (HACCP) system application at mineral water enterprises and EU legislation on mineral water.

3. Prerequisite programmes, Hazard Analysis and Critical Control Points (HACCP) system application at wine enterprises, EU legislation on wine and inspectors’ role today.

On November 15-16, NFA Veterinary Department organized two-day workshop on the registration of veterinary pharmaceutical (medicinal) preparations. CIB III experts clarified to the representatives of the Veterinary Department legislative requirements in the equivalent EU legislation, including registration of pharmaceutical preparations, approval of products, and control procedures. The experts also highlighted gaps in current legislation, provided recommendations to address the issue, and suggested timeframe for revision.

On December 3-7, a Swedish veterinary expert visited Georgia in ordern to support NFA Veterinary Department in the development of a contingency plan. The second mission is planned for the end of January 2019. The first mission was mostly dedicated to the understanding of the needs of the Veterinary Department, selecting structure of the contingency plan, general understanding of existed regulations and structure of contingency plans in Georgia.

On December 12-14, CIB III Expert held a training in Kakheti for veterinarians on HACPP audit at establishments of food of animal origin and feed. 18 veterinarians participated in the event.

On December 16-22, CIB III supported visit of an international expert from Estonian Institute of Veterinary Medicine and Animal Sciences to support MEPA/ NFA in the following:

1. Professional competence of veterinarians and veterinary technicians,

2. Rules and requirements for holding state certification exams for veterinarians and veterinary technicians,

3. Requirements for continuing professional development.

On October 22-26, CIB III supported NFA Veterinary Department to conduct a simulation exercise on Avian Infleunza and Newcastle Disease. A simulation exercise was held in Kakheti and Imereti regions led by an Italian veterinary expert. Simlation exercises were conducted in Kakheti and Imereti Regions. In total 30 veterinarians took part in the event.

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On October 9-11, CIB III supported NFA Plant Protection Department to organize training on the following topics:

1. Regulation (EC) N1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market and repealing Council Directives 79/117/EEC and 91/414/EEC

2. Regulation (EC) N283/2013 setting out data requirements for plant protection products, in accordance with Regulation (EC) N1107/2009 of the European Parliament and of the Council concerning the placing of plant protection products on the market.

MoAgr/NFA 2019 EU-funded Comprehensive Institution Building Programme (CIB) Phase 3 supported NFA Food Safety Department in organizing the following events:

Awareness raising activities for FBOs (producers, processors, distributors, wholesalers, retailers), food inspectors and specialists pertaining to the Decree № 301 of the Government of Georgia, on the Approval of Technical Regulation on the Provision of Food Information to Consumers. In total, information and capacity strengthening was delivered to 315 FBO representatives and 151 food inspectors and specialists. The abovementioned activities were held in Tbilisi, Kutaisi, Batumi, Borjomi, Telavi and Rustavi;

Awareness raising meetings / trainings for slaughterhouses and food inspectors with regard to the Decree № 581 of the Government of Georgia, on the Approval of Technical Regulation on Microbiological Indicators in Food. Trainings addressed sampling methods, identification of equipment needed for sampling and its use and interpretation of analysis results. In total, 129 representatives of slaughterhouses and 41 food inspectors were provided with information and capacity strengthening. The above mentioned meetings/trainings were held in Tbilisi, Kutaisi, Batumi, Zugdidi, Telavi and Borjomi; The second round of training for state veterinarians and food inspectors on HACCP principles was organized. The number of participants was 21 persons.

GEOSTM 2017 In the framework of CIB II phase Technical Assistance project “Further support for developing infrastructure related to standardization and metrology to meet EU best practices” following awareness raising seminars were conducted:

On 2 February 2017, in Tbilisi and on 20 April 2017 in Batumi the awareness raising seminars in the field of standardization and metrology were held for entrepreneurs and other interested parties. Seminars were attended by invited European experts as well as representatives of Standards Departments and Metrology Institute of GEOST.

On 25 April of 2017, in Tbilisi the seminar on “EU-Georgia Connecting Community: The Role of Standardization“ was conducted jointly by GEOSTM and CEN-CENELEC Management Centre (CCMC) for business sectors representatives and other interested parties;

On 26th of September 2017, the kick off conference of the Twinning Project “Support to Georgian National Agency for Standards and Metrology for further implementation of the EU Georgia DCFTA requirements” was conducted. The purpose of this event was to provide information to all interested parties regarding the activities planned for the implementation of DCFTA requirements, as well as regarding the importance of the standardization and metrology fields and plans of GEOSTM.

On 21st and 22nd of December 2017 for the staff of calibration and testing laboratories 2 similar seminars “Application of scales/balances and weights in

321 laboratories – General principles, services and quality assurance” were conducted by the staff of Mass and related quantities reference division of GEOSTM Metrology Institute. About 30 representatives of laboratories, business sector, governmental organizations etc. have already participated in mentioned seminars. Due to the significant interest and demand, GEOSTM plans to conduct two additional seminars in January 2018.

In 2017, the following seminars were conducted:

On 9-12 January of 2017, "Preparing for ISO 9001: 2015 Quality Management System Course’.

In the framework of the CIB II phase Technical Assistance Project, the staff of the reference divisions of GEOSTM Metrology Institute took part the internships in European metrology institutions in the following directions of measurement: Dimensional measurements, small volumes, force, gas flow measurements, big masses, pressure, acoustics and Time& Frequency.

From February 20 till 2 March 2017, the seminar on “Methodology of developing guidelines for Standardization sphere" was conducted for the staff of standardization department;

On April 26-27, 2017, the staff of Reference Division of Mass and related quantities, together with a German expert have been invited to the Metrology Institute of Armenia regarding the issue of creation a new mass laboratory (calibration of scales), which would be later traceable to GEOSTM Mass laboratory;

On May 24-30, 2017, staff of the standardization department participated in the seminar on "features of the establishment of technical committee in the field of road transport and harmonized standards";

On 20th of July 2017, training on "Comprehensive analysis of current situation in GEOSTM in approximation of general principles as laid down in the EU regulation 1025/2012 on standardization in line with the better regulation approach" was conducted for the staff of standards department of GEOSTM;

On 11-14 September and 2-3 October, training - "Gap Analysis and the Action plan for Capacity of standardisation department" was conducted for the staff of standards department of GEOSTM;

On 13-16th of November, representative of Standards Department of GEOSTM took part in training „Developing National Standardization Strategies", organized by ISO;

Staff of Standards Department of GEOSTM took part in online trainings (webinars) organized by CEN-CENLEC.

In 2017, in the framework of the CIB Technical Assistance Project, European experts conducted seminars and trainings for the staff of the reference divisions of GEOSTM Metrology Institute in the following directions:

Dimensional measurements - calibration of gauge blocks;

Flow –gas flow measurements;

Mass - application of the big mass comparator;

Time and frequency - Calibration of Stopwatches, Acoustic measurements; Electricity;

Pressure-bilateral comparisons; Force -calibration procedures in the field of force

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measurements, Humidity - issues related to calibration and to organization of bilateral comparisons; photometry and radiometry - calibration procedures.

Representatives of GEOSTM took part in various events organized by International and Regional organizations in the field of Standardization and Metrology:

CEN/CENELEC European Standardization Organizations - General Assembly, Scotland, Edinburgh;

ISO International Standardization Organization - General Assembly, Germany, Berlin;

Bureau International for Weights and Measures BIPM – General Assembly, France, Paris;

COOMET Technical Committee meeting TC 1.2 “Acoustics, Ultrasound, Vibration” – Lithuania, Vilnius;

Seminars organized by EURAMET (European Association of National Metrology Institutes): Seminar on Quality Management Systems and seminar on possibilities of participation of COOMET member NMIs in EMPR - European Metrology Research Programe.

GEOSTM 2018 Within the framework of the Comprehensive Institutional Building program CIB, the project “Support to the Georgian Agency for Standards and Metrology (GEOSTM) on Information Management System” is being implemented.

Within the framework of the project, the main processes for Information Management Systems were identified. Currently, in accordance with the recommendations of GEOSTM, the detailed scheme of the processes are mostly developed and the test version of the program is under development. Furthermore, the program will be synchronized with ISO/IEC, CEN, CENELEC, ETSI databases in accordance with recommendations and remarks submitted by the agency.

GEOSTM 2019 Within the framework of the Comprehensive Institutional Building program (CIB), a project “Support to the Georgian Agency for Standards and Metrology (GEOSTM) on Information Management System” is ongoing. The final stage is the development of information management systems. Accordingly, test/demo versions of systems are already prepared. Currently, the process of synchronization of GEOSTM’s Standards base with the bases of International (ISO / IEC) and European organizations (CEN, CENELEC, ETSI) is carried out. Trainings for GEOSTM staff are also planned87.

87 The data about DCFTA CIB activities was selected from Ministry of Economy and Sustainable Develoment of Georgia (2014) Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2014. Annual report; Ministry of Economy and Sustainable Develoment of Georgia (2015) Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2015. Annual report; Ministry of Economy and Sustainable Develoment of Georgia (2016) Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2016. Annual report; Ministry of Economy and Sustainable Develoment of Georgia (2017) Deep and Comprehensive Free Trade Agreement 2014-2017. Action Plan implementation for 2017. Annual report; Ministry of Economy and Sustainable Develoment of Georgia (2018). Report on the implementation of the DCFTA implementation National Action Plan for 2018, Annual report; Ministry of Economy and Sustainable Develoment of Georgia (2019). Report on the implementation of the DCFTA implementation National Action Plan for 2019, Annual report.

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Appendix III

Table C Georgian exports by countries (USD thousand) Georgian Exports by Countries (Thsd. USD) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total 1,133,630.2 1,677,306.9 2,186,421.2 2,376,635.4 2,910,314.5 2,861,045.2 2,204,188.6 2,113,044.3 2,735,778.5 3,355,712.2 EU countries 237,721.3 309,238.4 424,459.5 352,957.7 607,204.0 624,201.4 644,729.9 565,653.3 655,407.1 730,688.9 CIS counrties 416,162.3 676,618.2 1,052,101.3 1,244,575.8 1,621,095.7 1,465,298.7 840,854.1 737,522.4 1,184,757.0 1,669,480.0 Russia 21,146.2 34,706.5 36,610.4 46,806.0 190,653.4 274,754.0 162,885.6 206,044.0 396,672.0 436,646.8

Other countries 479,746.6 691,450.3 709,860.3 779,101.8 682,014.8 771,545.0 718,604.6 809,868.6 895,614.4 955,543.4 Source: compilation by the author using data from GEOSTAT

Table D Georgian imports by countries (USD thousand) Georgian Imports by Countries (Thsd. USD) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total 4,475,724.5 5,235,964.6 7,072,259.8 8,056,379.0 8,022,546.4 8,601,814.4 7,300,200.2 7,293,961.2 7,943,302.2 9,136,739.1 EU countries 1,335,482.8 1,470,059.3 2,054,870.9 2,431,589.5 2,266,083.7 2,371,979.7 2,080,887.5 2,214,987.2 2,200,639.1 2,506,127.4 CIS counrties 1,286,462.1 1,576,342.4 1,949,499.6 2,060,106.4 2,177,586.5 2,127,489.9 1,967,899.3 1,981,193.2 2,317,772.9 2,695,283.7 Russia 290,811.4 289,726.8 387,960.5 476,828.5 583,939.6 575,570.3 625,065.6 675,627.7 786,866.8 934,891.6 Other countries 1,853,779.6 2,189,562.8 3,067,889.3 3,564,683.2 3,578,876.2 4,102,344.7 3,251,413.4 3,097,780.8 3,424,890.1 3,935,328.0 Source: compilation by the author using data from GEOSTAT

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