By Special Co-ordinator Erhard Busek at G17.

Ladies and Gentlemen,

I am delighted to be with you today. I very much welcome this initiative taken by the G17 to give me an opportunity to outline our vision on the future strategy of the Stability Pact for SEE. . I am glad to be able to present and discuss my ideas to this distinguished audience first in a SEE country. . Next week, on 11 March 2002, I will report to the EU Foreign Ministers on my proposals.

The international community has conceived the Stability Pact as a medium to long-term political process, to respond to the need for a coordinatedco-ordinated approach to stabilizationstabilisation and development of South Eastern Europe. . Expectations were, and still are, high.

Since the creation of the Stability Pact in June 1999, countries in the region have gone a long way. . Democratic change has paved the way for regional stabilisation and economic transition. . For the first time in a decade, all governments in south-eastern Europe are committed to Euro-Atlantic integration, market economy and regional co-operation, as well as to peaceful settlement of disputes. . Moreover, the economies in SEE have started to show positive developments over the last two years. . Private investment flows have recovered, and there is significant economic growth across the region. . However, looking in particular at the Southern Balkans, serious security challenges still prevail. . They require continued attention by the International Community.

Democratic change in the Federal Republic of Yugoslavia’s has created significant new opportunities for bringing about stability in SEE and for designing true regional strategies in key sectors. . The Stability Pact was the first organisation to have welcomed the FRY as a member. . Since then, this country has actively participated in most of our initiatives, demonstrating a significant amount of responsibility and maturity.

Thanks to the efforts of my predecessor, the Stability Pact is by now a mature operation. . It has functioned on the right assumption that the international community will support the SEE countries in their attempt to accelerate reforms and enhance regional cooperationco-operation. . However, we are now entering a new adolescent phase that requires redirecting and refocussingrefocusing of its actions. . More precisely, we intend to streamline our activities towards economic development and creating a self-sustainable environment of peace, security andsecurity and democracy throughout the region.

Against this background, during last months, we have thoroughly reviewed a large part of the initiatives and activities undertaken in the framework of the Stability Pact. . I have widely consulted with our main partners on how to streamline this operation and how to improve its working methods. . Major findings and recommendations appear to have found wide support in the Stability Pact community, including EU and non-EU partners. . They refer to the need to enhance complementarity with other EU processes, setting priority objectives and improving working methods, and fostering regional ownership. . Let me introduce the main elements of our future strategy.

Accelerating EU approximation – a clear roadmap to integration

One of our priority objectiveobjectives is to advocate and lobby for Euro-Atlantic integration of SEE countries.

Through the Stability Pact for SEE, the EU, for the first time in history, undertook to draw South Eastern Europe "closer to the perspective of full integration...into its structures". . Subsequently, all Southeast European countries have been recognised as potential candidates for EU membership. . As the EU´s main contribution to the Stability Pact, the European Commission designed the Stabilisation and Association Process for the Western Balkans. . The wish to become a member of the EU remains a powerful incentive for reform throughout the region.

The efficiency and effectiveness of the Stability Pact operation continues to rely on the leading role of the EU in achieving our common goals in the region. . Against this background, complementarity between the Stability Pact and the two main EU strategies towards the region, namely the the Stabilisation and Association Process (SAP) for the "Western Balkans" and the accession process for candidate countries which also participate in the Stability Pact (Rumania and Bulgaria) need to be enhanced.

It is of paramount importance that the Stability Pact remains committed to coherence and mutual support to both processes. . It will aim at promoting the objectives of these processes. . And it will assist countries in the region to make full use of their instruments. . In this context, we work on transferring transition experience by EU Accession candidates to the rest of the region, through regional cooperationco-operation, for instance in the framework of the SP Migration and Asylum initiative.

We need to work on making our instruments more efficient. . In order to enhance complementarity and information exchange between EU institutions and the Pact, an Informal Consultative Committee (ICC) has been established. . One of our aims is assuring necessary coordinationco-ordination between assistance programmes (such as CARDS, PHARE/ISPA, TACIS) with a view to enhancing cross-border cooperationco-operation.

However, our aims will be even more ambitious. . There is a clear need for the EU to elaborate its strategies towards the region and interlink them. . Brussels needs to answer the questions as to what more can be done to accelerate EU approximation. . What should happen once a country has successfully concluded a Stabilisation and Association Agreement? ? How will it be enabled to join the group of Candidates for membership in the EU?

In summary, the enlargement strategy has to be reconsidered with a view to providing a clear accession perspective to all those countries that will not be accepted in the next round of EU enlargement. . What we need is a clear roadmap to integration.

In the same vein, I point at NATO and call for an elaboration of its enlargement strategy. . We now have reached the point where an admission of Romania and Bulgaria into NATO is not only in the interest of the stability in the two countries concerned, but equally so in the interest of the stability of South Eastern Europe as a whole. . I call upon NATO member states to carefully consider this step in the next round of NATO enlargement and to admit the two Southeast European nations as soon as conditions permit. . The international community needs to understand that a "double rejection" delaying accession to EU and NATO without such a roadmap would send a wrong signal and put its credibility at stake. . Here, the Stability Pact may bridge the gap between the various enlargement processes that proceed at different speeds.

It is equally important for the Stability Pact to ensure the continued involvement of and co-ordination with non-EU donors, International Organisations, and where appropriate NGOs. . With the inclusive approach of the Stability Pact, encompassing the EU, the G8, Norway and Switzerland, Central, Central European and Southeastern European countries, International Organisations such as the OSCE, the Council of Europe, the UN, NATO, the OECD and the IFIs, as well as regional organisations, policies can be harmonised and greater synergies be created.

Focussing and streamlining the operation: "fewer meetings, more action"

In order to reduce the number of Stability Pact meetings and rationalise Stability Pact structures a number of organisational changes will be undertaken. . For instance, we will reduce Working Table sessions to once annually and focus the agenda on specific initiatives. . Moreover, we will strengthen coordinationco-ordination and cooperationco-operation of Task Forces and initiatives that work on related subjects, such as between the Migration and Asylum Initiative, the Social Cohesion and the Refugee Return Initiatives, and between the initiatives on trafficking in human beings, police co-operation and anti-corruption.

Raising awareness of our achievements, including among the donor community is essential. . We need to make sure that despite new foreign policy objectives SEE remains on the agenda of the international community.

The EU has asked to focus our operation on 5-6 priority objectives to be achieved within this year. . On the other hand, many partners have stressed the need to continue ongoing work also in other important areas. . We expect considerable progress and concrete results in many initiatives, which, for reasons of time, I will not highlight today. . The following, priority objectives have been selected to honorhonour the request of the EU. . They represent a further elaboration of the strategies and priorities established by the Regional Table in June 2001.

Trade and investment

Liberalising trade is of critical importance to the economies of SEE. . Excellent progress has been made with regard to regional trade liberalisation in the last year. . A Memorandum of Understanding was signed at ministerial level in Brussels on 27 June 2001. . It foresees, inter alia, between all countries of the region of Free Trade Agreements (FTA). . It is fully in line with WTO rules and with the commitments within the framework of the EU accession or the StabilizationStabilisation and Association process. . I congratulate the countries of the region to this important step forward. . However, much needs to be done in order to complete the network of 21 bilateral FTAs that shall be established by the end of 2002.

In this vein, the investment climate needs to be improved. . Credits of western banks to the local banking and private sector are still critical. . ThereforeTherefore, we will put an even stronger emphasis on the Investment Compact, which tries to help the countries getting rid of investment barriers and attracting more investments. . We aim at removing obstacles to private investment and monitoring the overall investment climate by, focussing the Investment Compact on a limited number of policy areas in each country, downsisingdownsizing the number regional flagship initiatives and promoting a regional investment space. . The Pact will seek endorsement of specific commitments by countries of the region and will engage the private sector, using in particular our Business Advisory Councils.

Infrastructure (including energy)

In my daily contactscontacts, I hear questions and dissatisfaction on the way the implementation of the infrastructure package is proceeding. . Delivery and timely implementation of projects will dominate our agenda in the future when it comes to infrastructure. . Our priority will be to ensure work towards the timely implementation of the 2 agreed sets of infrastructure projects in close cooperationco-operation with the EU, the IFIs and the region. . This includes finalising and operationalising regional strategies in specific sectors by Stability Pact partners and removeThis includes finalising and operationalising regional strategies in specific sectors by Stability Pact partners and removes obstacles to implementation. . Furthermore, and pursuing the selection process of new infrastructure projects within the Infrastructure Steering Group in support of these strategies shall be pursued. . Within SEECP, rRegional energy cooperationco-operation should shall be strengthened particularly in the field of electric power and commitment be reached within SEECP to bring about a regional energy concept.

Refugee issues:

Humanitarian and social issues will figure high on our working agenda. . In the framework of the Stability Pact, Croatia, Bosnia and Herzegovina and the FRY found a historical agreement on a highly political issue: the unresolved situation of 1.2 million refugees and displaced persons. . By adopting the "Agenda for Regional Action", the Governments of Bosnia and Herzegovina, Croatia and the FRY, together with donors, undertook to implement a detailed work plan covering issues such as reconstruction, housing, loan schemes, property legislation, pensions and social security. . This year, we work on providing sustainable solutions for at least 100,000 refugees and Displaced Persons by increasing the level of return and integration assistance and credits for self assistance, accelerating the repossession of properties (both private and tenancy right holders), decreasing the number of beneficiaries of humanitarian assistance, and adapting the overall level and timing of available financing in refugee related activities to needs (e.g., for 200,000 housing units needed in the next 3-4 years). Particular attention shall be given to resolving outstanding regional issues (concerning, e.g., pension payments, social rights, private property and tenancy rights).

Cross-border cooperation

This priority objective has been chosen in light of the fact that a truly regional strategy to tackling the unresolved questions of national identity and status that have emerged in the Southern Balkans is still missing. . We wish to start up an informal sub-regional dialogue and cooperationco-operation process between representatives from the FRY (Kosovo, Serbia, Montenegro), Albania and Macedonia on functional cross-border issues (e.g., on energy, infrastructure, border management etc.).

Small Arms and Light Weapons

The uncontrolled profliferationproliferation of SALWs throughout the region represents a serious danger to peace and stability. . Last year´syear's Working Table III meeting in Budapest approved the Regional Implementation Plan on Small Arms. . Participants thereby indicated their willingness to work together to craft joint project proposals on controlling the spread of small arms and light weapons throughout the region. . They have also agreed to a greater degree of information sharing on weapons trafficking and border strengthening efforts. . In light of this achievmentachievement, we intend to eEstablishment of a "Regional Clearinghouse" in Belgrade in March 2002 under UNDP auspices. . We expect this initiative The task is to develop and implement projects aimed at reducing the excess supply and illicit trafficking of SALW throughout in the region in accordance with the Regional Implementation Plan.

Organised crime

In an attempt to streamline ongoing initiatives to figthfight organised crime, we will establish a SPOC executive secretariat at the SECI Transborder Crime Center at Bucharest to be operational in the region. . The CenterCentre aims to strengthen co-operation between the regional crime centre, Europol and Interpol and to assess the legal, institutional and technical conditions for the exchange of information.

Enhancing Regional Ownership

Viable solutions can only be achieved through enhanced local ownership. . The active role of Southeast European countries in the Pact’s initiatives will be the main recipe for success. . In this vein, we will aim to transfer more and more of its functions to the region. . We will equally aim to reflect the ownership principle more in our staffing procedures. . SEE countries shall be associated closer to the decision making process. Therefore, we will develop closer links with the SEECP and encourage the upcoming Yugoslav chair to strengthen and enhance SEECP structures, so it can act as a coordinatedco-ordinated voice of the region and a forum for regional cooperationco-operation.

Regional co-operation is an indispensable component and a precondition for Euro-Atlantic integration, the "fast track to EU membership"! ! By now it has become clear that regional co-operation is one of the founding principles of the European Union itself and serves the mutual interests of all participating countries.

I am glad to see that the FR Yugoslavia will take over the SEECP chair, opening up new opportunities to enhance regional cooperationco-operation and working towards addressing the region’s greatest concerns. . The objectives set out for the Stability Pact for Southeast Europe, serving as a catalyst for regional cooperationco-operation and development, coincide completely with the goals that the SEECP has established. . I believe there is much we can gain from enhancing our relationship.

I look forward to co-operation with you, and success in the Pact, in the year to come.