The agreement is important for Croatia's integration with the EU and prepares the country to make the best possible use of future funds, Prime Minister Ivo Sanader said after the signing ceremony which he attended along with all government members.
A lot of work awaits Croatia after the signing of the agreement, and Croatia did all that was necessary to sign the agreement, Degert said.
The agreement refers to 23 projects which are financed through this PHARE programme, PM Sanader said, adding that the funding for the projects was sizeable and non-repayable.
Although the European Commission had envisaged 80 million euros within the 2005 PHARE programme for Croatia, it decided to grant an additional seven million euros because of a large number of exceptionally good projects and the country's good absorption of funds. The implementation of the first projects to be financed through the 2005 PHARE programme is expected in the second half of 2006. The implementation of the projects requires additional funds from the national budget.
PM Sanader said that the granted funds were intended for the strengthening of democracy and the rule of law, the strengthening of administration, the strengthening and development of the internal market, support to the tax authorities, active employment measures, and support to the most vulnerable categories of society.
EC Delegation chief Degert said the 2005 PHARE programme contained three important elements. The first one is co-financing, which has replaced the previous system of donations. Croatia is now required to participate by returning investments at a fast pace. Secondly, fund management is now done also by Croatia, which took over that task in February. Thirdly, Croatia will draw closer to the EU thanks to the programme because it will take part in more joint projects, Degert said.
The purpose of the PHARE programme, one of the three programmes of pre-accession assistance, is the implementation of reforms necessary for admission to the EU and preparation for the use of EU structural funds upon admission.