Environment is one of the areas which posed the biggest challenges for the East European accession countries in their run-up to membership. The environmental legacies of most post-communist countries, with their focus on heavy industry, were appalling. By the late 1980s, large areas of Eastern and South Eastern Europe suffered from excessive air pollution, water pollution and land degradation.
Institutionally, the challenge consisted of incorporating over 200 EU directives, regulations and decisions into national legislation, making Environment the third most comprehensive chapter of the acquis after agriculture and the free movement of goods. This required a complete overhaul of existing legislation and the creation of many new laws and policies.
The situation in the environment sector in 1997 in Bulgaria was truly disastrous. From communist times, Bulgaria had inherited low efficiency use of energy and raw materials as well as outdated and highly polluting technology. In certain areas, there was no legislation at all. In 1997 the combined spending of the ministry and the fund on environmental investment projects amounted to not more than € 4.5 million, a pathetically low sum given the size of the challenge.
Imagine the task in 1997. To be able to move from the situation described above to compliance with EU rules seemed impossible. The EU environment acquis comprises over 200 legal acts, covering horizontal legislation, water and air pollution, management of waste and chemicals, biotechnology, nature protection, industrial pollution and risk management, noise and radiation protection. But the transposition of EU legislation would only be a first step. Entirely new institutions needed to be created and existing ones considerably strengthened in order to be able to implement new laws and policies. Hundreds of staff would need to be trained. Co-ordination between the institutions involved would need to be enhanced. The relationship between the government and the public, in particular companies and NGOs, would need to change considerably. The government would have to earmark huge amounts of money for investments necessary to meet EU standards. In 2001, the Commission estimated that the total cost of implementing the environmental acquis in Bulgaria would amount to € 8.6 billion.
Even assuming determined political will, this was still a tremendous challenge.
The EU offered significant assistance. First, it provided intensive guidance on how Bulgaria's legislation needed to change to meet EU standards and on the kind of institutions needed for implementation. Second, the EU provided technical assistance to help build up required institutional capacity. A total of 22 projects (or sub-projects) were put into place between 1998 and 2005, ranging from general support (development of strategies, plans, transposition of legislation) and the strengthening of individual parts of the administration to implementing specific directives and to the training of officials at regional and local levels. Third, and most important, was the EU's assistance budget for investments in the environmental area. This was central to the member state building effort. While huge sums were put on the table, they could only be spent as institutional capacity developed.
Starting from 2000, the accession countries benefited from the Instrument for Structural Policies for Pre-accession (ISPA), a specially developed programme oriented at the EU structural funds. ISPA was made available for environment and transport sector projects in the accession countries. In order to spend ISPA funds, a number of preconditions had to be met. Every environment investment project which involved any ISPA funding had to comply with very strict standards. Given that project costs were never below € 10 million and could sometimes exceed € 40 million, preparation took from several months to up to two years, depending on the size of the project.
Capacity to deal with such projects had to be built up; in numerous instances the EC demanded improvements in the applications if they did not meet required standards. It often took three to four years from a project's inception before construction began. Although most acceding countries were more efficient than Bulgaria, all had problems with ISPA due to the programme's cumbersome and time-consuming procedures. For countries starting from a low level of administrative capacity, like Bulgaria, it was a particularly crucial learning process.
Throughout the whole seven-year period from 2000 to 2006, the EU invested more in the environmental sector than all Bulgarian institutions put together. In total, 22 environmental projects with a total value € 643 million were accepted by the Commission. Of the total project funds, ISPA would cover € 411 million, slightly less than two thirds of the total costs. The remainder would be financed by Bulgaria (€ 170 million) and IFIs (€ 62 million).
Due to the complicated and demanding processes of preparing tender procedures according to EU standards, contracting and payment took time. Of the total amount of € 643 million, € 344 million or 54 percent have been contracted and € 159 million or 25 percent spent by November 2008. While spending has been even slower than in other accession countries, the € 159 million still represents double the amount that had been paid out by August 2007 (€ 80 million), which means that spending is accelerating.
Guidance for legislative changes, support for building up new institutions and strengthening existing ones, and funding for the environment sector were crucial in bringing about intrinsic transformation – defying the argument that institutional capacities have to be built up before the accession process can begin in earnest. Capacity building, in other words, is a key feature of member state building, but not a precondition. In order to produce the impressive results that Bulgaria has achieved, all three components - guidance, capacity building and funding - are needed at the same time.
There are still many environmental problems in Bulgaria, but the country is now equipped with the tools and skills to address the challenges of meeting all (or at least most) European environmental standards within several years. This is an extraordinary change from 1997 and would not have been possible without the combination of incentives, mechanisms and assistance provided by the accession process.