The PHARE Programme is the European Union´s initiative which provides grant and loan finance to support the process of economic transformation in Central and Eastern European countries and to strengthen newly created democratic societies. Its aim is to help these countries to rejoin the mainstream of European development and built closer political and economic ties with the European Union, as well as prepare them to enter the European Union in the future. Since 1945 until 1989 the countries of central and eastern Europe were cut off from the mainstream of European development. In 1950 the European Steel and Coal Community was the first institution which was set up and which formed the basis for establishment of the European Union. The opening up of Central and Eastern Europe after the dramatic events of 1989 has provided the greatest challenge to the European Union since its creation. Therefore in December 1989 it was decided by the Council of Ministers of the European Union to assist Poland and Hungary to support the momentous changes taking place in their countries. (PHARE = Poland and Hungary Assistance to Reconstruction of their Economies). The PHARE programme was set up (by PHARE Regulations No. 3906/89 published in Official Journal L. 375 of 23 December 1989 which covered only Hungary and Poland and was later amended to allow extension to other countries). operations began in 1990.
