Key Dates

1. Types of assistance provided by the European Union during 1991-2001

The European Union financial assistance is the main supporting instrument for the fulfillment of the obligations deriving from the Stabilization and Association Agreement. The EU is the largest donor in the Republic of Albania and its financial support continues to grow each year. Its goal is to support Albania during the enlargement process, aiming at strengthening the rule of law and democratic stabilization, the establishment of European standards as well as to support the economic and social development of the country.

During the 1990s, the European Union assistance was mainly provided through the Phare programme and as well as through other types of support, focusing on food safety, humanitarian aid in emergencies, support for the balance of payments, holding elections in country based on electoral standards, assistance for projects in the field of education and loans from the European Investment Bank. The total amount of financial assistance provided to Albania during this period amounted to more than 912 million Euros.

2. Period 2001-2006 - Stabilization and Association Process and CARDS Programme

The assistance provided by the European Union to the Western Balkan countries until the late 1990s was made possible through the use of varied programme regulations. This caused the lack of coordination and gaps in efficiency of funds management.

Out of this concern, in combination with the newly arising needs of the Western Balkan countries, in 1999 the EU launched a new initiative called the Stabilization and Association Agreement (SSA), a process that would support the five Western Balkan countries (WBC): Bosnia-Hercegovina, North Macedonia (at that time FYROM), Croatia, Serbia and Albania. This process aimed at establishing closer relations between the European Union and the above-mentioned countries, through Stabilization and Association Agreements (SAAs).

The CARDS programme (Community Assistance for Reconstruction, Development and Stabilization) was considered as a main instrument assisting Albania since 2001 on its path of adopting the terms of SSA.

This assistance has been focused on supporting reforms and building the institutions required to implement the obligations set out in the Stabilization and Association Agreements for the five Western Balkan countries. During the period of 2000-2006, the total amount of funds received by WBC was about 4.65 billion euro. Albania has benefited from around 280 million euro in grants (free of charge, no obligations to return).

The financial assistance allocated to Albania, was defined in the Multi-Annual Indicative Programme 2002-2004 (MIP), aiming to support the Stabilization and Association Process, including support to an overall socio-economic development. The assistance was directly managed by the European Union Delegation to Albania.

Three types of the CARDS programme implementations:

• The centralized mode- where the role of the contracting authority was played by the services of the European Commission in Brussels (projects in the field of customs, taxation and education (TEMPUS));
• The deconcentrated mode- where the role of the contracting authority was played by the EU Delegation in Tirana (for most of CARDS projects). The deconcentrated process lasted for a relatively long time and the transition to a new management structure has been one of the main reasons for the delays in starting the implementation of CARDS 2001 and 2002 programmes;
• The decentralized mode- where the role of contracting authority was played by the local authorities. The Local Community Development Programme (LCDP) was implemented in a decentralized mode by the PMU at the Albanian Development Fund (ADF).

CARDS programme functions on two levels:

• At the national level called National CARDSand;
• At the regional level called Regional CARDS.

National CARDS

Based on the Strategic Document for Albania, the European Commission has provided Albania in the framework of CARDS Programmes for 2001-2006 the grant amount as follows:

• CARDS 2003 - total amount € 46 500 000 
• CARDS 2004 - total amount € 58 500 000 
• CARDS 2004 (Supplement) - total amount € 5 000 000
• CARDS 2005 - total amount € 44 200 000
• CARDS 2006 - total amount € 42 500 000

The total amount under the CARDS National programme amounted to 281.6 million Euros.

Support was programmed based on key sectors of justice and home affairs, strengthening administrative capacities, economic and social development, environment and natural resources, and democratic stabilization. The multi-year indicative program (MIP) 2005-2006, in response to the Thessaloniki Summit, which opened the possibility for PSA countries to participate in community programs, included a package for community programs.

The signing of financial agreements (ratified by the Albanian Parliament) has paved the way for the implementation of annual CARDS programs. Each financial agreement, contained set deadlines for the tendering, contracting and implementation of the program.

3. IPA I - New financial instrument supporting the pre-accession

On September 29, 2004, to establish a unified instrument for pre-accession assistance, the European Commission presented a draft regulation called the Instrument for Pre-Accession Assistance (IPA). This instrument was created to provide financial support to the Western Balkan countries aspiring to be part of the European Union, based on the lessons learned from previous instruments, in order to improve the efficiency and coherence of EU financial support through a single instrument.

The launch of the European Union's new financial initiative for the period 2007-2013 was based on the previous support for pre-accession and stabilization and association for candidate and potential candidate countries. This assistance considered the specific characteristics and stages of each specific country. This new financial initiative replaced the previous aid instruments, namely, Phare, CARDS, ISPA, SAPARD and the pre-accession instrument for Turkey.

The financial envelope for Bosnia and Herzegovina, North Macedonia, Croatia, Montenegro, Serbia, Kosovo, Albania and Turkey for this period (2007-2013) amounted to 11.5 billion Euros.

EU support for the countries of the Western Balkans and Turkey came through IPA programme in order to meet the above obligations and to integrate the efforts and standards of their development with those of the member states.

The assistance under this instrument was focused on five key components that required the most attention, which were:

1. Transition Assistance and Establishment of Institutions;
2. Cross-border cooperation;
3. Regional Development;
4. Development of Human Resources;
5. Rural Development

Potential candidate countries, including Albania, were granted access to the first two components of the IPA programme only: 1- Transition Assistance and Establishment of Institutions; 2- Cross-Border Cooperation, as support for participation in the Stabilization and Association Process on their path to future association. Within the first component it existed the possibility to finance types of measure that fell under Components 3, 4, and 5.

For candidate countries - support was provided throughout all five components in order to adopt the acquis and prepare for EU funding after accession.

Candidate countries, meanwhile, were granted access to the other three components in order to help them prepare for the post-accession period, in particular the implementation of Community cohesion and rural development policies..

4. Financial perspective under IPA II for the period 2014-2020.

IPA II sets a new framework for providing pre-accession assistance for the period 2014-2020. The most important novelty of IPA II is its strategic focus. Country Strategy Papers are the specific strategic planning documents made for each beneficiary for the 7-year period.

IPA II targets reforms within the framework of pre-defined sectors. These sectors cover areas closely linked to the enlargement strategy, such as democracy and governance, rule of law or growth and competitiveness. This sector approach promotes structural reform that will help transform a given sector and bring it up to EU standards. It allows a move towards a more targeted assistance, ensuring efficiency, sustainability and focus on results.

IPA II also allows for a more systematic use of sector budget support. Finally, it gives more weight to performance measurement: indicators agreed with the beneficiaries will help assess to what extent the expected results have been achieved.

The priority sectors for funding are:

• Democracy & governance;
• Rule of law & fundamental rights;
• Environment;
• Competitiveness & innovation;
• Transport;
• Education, employment & social policies;
• Agriculture & rural development;
• Regional & territorial cooperation.