A free trade area with 55 million consumers as of next year, over 125'000 returned refugees in 2002 and a mechanism in place to collect small arms in illicit private possession are the major achievements of the Stability Pact this year. This progress report was presented in writing to the EU Foreign Ministers Council in Luxembourg, by Stability Pact Special Co-ordinator Erhard Busek on 21 October. On a general note, Busek also informed Ministers that regional ownership within the Pact had increased, especially by the revived SEECP process becoming the co-ordinated voice of the region.

At a public presentation of the report at the Brussels based think-tank Centre for European Policy Studies (CEPS) today, Erhard Busek outlined the Pact’s achievements in six priority areas. The creation of a free trade zone by means of 21 bilateral free trade agreements, of which 11 are signed and the rest is under final negotiation, helps attract investments to Southeast Europe and turns the region into one market, which is how it is perceived from the outside. The improved situation for refugees and internally displaced persons in Bosnia-Herzegovina, Croatia and Yugoslavia has led to record numbers of returns in 2001 and 2002. The figure of over 125'000 returns in the year 2002 so far is indicative of this success in finally closing one of the remaining open chapters of the Croatian and Bosnian Wars. The Pact’s return activities are conducted in close co-operation with UNHCR and the governments of the countries concerned. They will come to an end in late 2003, when refugee matters will not need a special mechanism any longer and can be dealt with in the regular assistance to South Eastern Europe in the Stability Pact framework. The uncontrolled flow and illicit possession of small arms and light weapons in Southeast Europe can be tackled much more effectively in the future with the help of the Belgrade based Clearinghouse (opened 8 May), which is run by UNDP. Its main activity is to help develop and implement arms collection projects and related activities in all countries of SEE.

Busek also reported about the launching of sub regional co-operation by SRSG Steiner in Kosovo, HR Ashdown in Bosnia-Herzegovina and EUSR Le Roy in FYR Macedonia to address such practical issues as fostering regional trade and fighting organized crime. To this end, the Regional Crime Fighting Centre in Bucharest will be reinforced by the secretariat of the Pact’s Organised Crime initiative SPOC in November. On infrastructure, a field with high public expectations, progress has been considerable and becomes more and more visible. The two lines of infrastructure projects stemming from the two regional conferences in Brussels (March 2000) and Bucharest (October 2001) were merged into one consolidated list, comprising 46 projects with a volume of € 3.46 bn. On 23 of these, physical work on the ground has started, with 5 more to begin before the end of 2002. With reference to electricity, a memorandum of understanding in view of the creation of an integrated electricity market along EU lines is expected to be signed on 15 November in Athens. A regional electricity market compatible with the respective EU legislative framework is planned to be realized by 2005.

Full Report.