Salzburg   -  Hosted by the Austrian Chancellor Wolfgang Schüssel and co-chaired by the Special Co-ordinator of the Stability Pact for South Eastern Europe Erhard Busek, the Prime Ministers of Albania, Croatiaand Bosnia andHerzegovinamet in Salzburg, Austria, today 1 August in order to assess progress of various regional co-operation issues in South Eastern Europe.

The participants agreed that only by keeping the European perspective of South Eastern Europe countries alive, the political and economic situation in the region would continue to improve. The South Eastern European Prime Ministers used the opportunity to reiterate that the perspective of joining the EU has a direct effect on for the reform processes in these countries so it must be kept alive.

Special Co-ordinator of the Stability Pact for South Eastern Europe Erhard Busek used the opportunity to remind SEE countries of their commitments to create a successor organisation to the Stability Pact, namely the Regional Co-operation Council, and urged them to stick to the agreed timetable. "You and the international donor community have agreed in Belgrade in May this year that we will embark on an ambitious path towards creating a sustainable long-term regional co-operation body in South Eastern Europe. In order to achieve this, we need to stick to the agreed timeline and have the new body fully functional at the beginning of 2008."

Specifically, the Prime Ministers discussed issues of:

• Creation of Single Free Trade Area in SEE: The Prime Ministers took stock of two rounds of negotiations on the creation of a Single FTA through simultaneous enlargement and amendment of CEFTA. The Stability Pact and the European Commission are working hard to meet the ambitious target of completing the talks by end of September but the main responsibility lies with SEE countries themselves. There was a general agreement that quality should not be sacrificed by speed.
  
• Danube co-operation: in light of the upcoming meeting of the Danube Co-operation Process in Belgrade in November, countries of the region should further strengthen co-operation on the Danube being an environmentally friendly and very economical mode of transport and a potential source of energy. Moreover, the November meeting should be used as an opportunity to remove deadlocks that jam co-operation among the riparian countries.
• Investment Financing and Infrastructure: Private sector needs to be involved in infrastructure financing due to huge investment needs of the region but limited ability of these countries to borrow. The Prime Ministers have therefore welcomed the adoption in June of a Regional Investment Framework and have committed themselves to the implementation of agreed reforms that would make the region more attractive for foreign investors.
• Enhanced co-operation in the field of energy, barring in mind that gas and electricity supplies in South Eastern Europe could again come under threat next winter. In order to tackle this, South Eastern European countries and their neighbours need to devise a solidarity emergency plan to address potential gas and electricity shortages. The countries should use the framework of the existing Energy Community Treaty in South Eastern Europe, which has been negotiated by the Stability Pact and the European Commission.

The meeting was also an opportunity for an exchange of ideas on how to assist the development of the next generation in South Eastern Europe. While the Stability Pact has agreed to work in the area of Building and Fostering Human Capital, countries themselves need to create opportunities and perspectives for the young generation. While understanding that the countries in SEE are overburdened by EU integration agenda, education and research must be placed higher on the agenda. "Politicians must make sure that there is a healthy pool of well educated and well travelled people who will serve as the next generation of leaders. We all must make sure that this generation receives the best education they can, either at home or abroad, and that they are given a chance to study and work abroad," Erhard Busek said.

For further information, please contact Stability Pact's Spokesperson
Mr Dragan Barbutovski at the SP Secretariat in Brussels
(Tel: +32 2 401 87 25 or press@stabilitypact.org).

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PR2006/012