The PHARE programme was started by the European Union in December 1989 as a way of extending financial support to political and economic changes in Poland and Hungary. Gradually, the programme was extended to other post-communist central and eastern European countries, and eventually took on its current purpose, which is to support these countries in their attempts to join the EU.
On April 23, 1996, the Slovak Government Office took over responsibilities for coordinating the PHARE programme in Slovakia and distributing the funds.
In 1998, Slovakia received through PHARE 78.3 million euro, in 1999 103.3 million euro, and in 2000 114.2 euro. Another fund, ISPA, gave Slovakia 42 million euro over this time.
The EU funding has been used for everything from fixing railways and preparing the Jaslovské bohunice nuclear plant for shut down to cleaning public water supplies, fighting corruption and housing the Roma.
Sources close to the European Commission say that Slovakia's recent funding scandal is largely due to the fact that no controls exist on either the EU or Slovak side on how EU taxpayer money is spent, particularly on smaller projects involving less money.
PHARE project funding principles:
1. Accessibility- there must be free competition for all entities with headquarters in an EU country or the PHARE project.
2. Fair competition - any firm or person which takes part in the preparation of a project is forbidden to take part in its execution.
3. Transparency and objectivity - these principles must be observed in all cases.
4. Greatest emphasis on money - the economically most advantageous offer must always be chosen.
5. No retroactivity - in no instance may contracts and appendixes be awarded retroactively.
6. Use of standard documents - standard contracts and contract documents must be used and all contracts must include general conditions.
7. Record keeping - all written records from tenders and the preparation of contracts must be kept secret and stored under lock and key in archives for five years.
