Parliamentary Troika Conference   

Opening Address of the

Special Co-ordinator for the Stability Pact Erhard Busek

(Check against Delivery)

  Mr. President, Honoured Members of Parliament, Your Excellencies, Ladies and Gentlemen,

I would like to thank the organizers of this conference, the Parliamentary Assembly of the Council of Europe, and our host, the Albanian Parliament, for giving us this forum to discuss the developments in South Eastern Europe during the past three years since the founding of the Stability Pact in 1999.  

Today's conference is the third in a row of very symbolic and significant conferences of the Parliamentary Troika.  They represent, in a certain way, the democratic dimension of the Stability Pact.  A dimension, which is necessary, considering the fundamental societal transformation process South Eastern Europe is going through.

These conferences of the Parliamentary Troika are also an important incentive for closer parliamentary co-operation within the region itself.  I would like to mention the meetings of Speakers of Parliament of the South East European Cooperation Process (SEECP) in this respect – a nucleus developing into a Parliamentary network, maybe even a future Parliamentary Assembly of the region.  I would like to call upon Members of South East European Parliaments to take the initiative for such an Assembly, also to increase regional ownership.  This process could and should remain closely interlinked with the Troika process in order to maximise synergies and sharing of experience. 

An important step has already been taken by our hosts, the Albanian Parliament, having recently established a Parliamentary Committee dealing specifically with the Stability Pact and European Integration.  This is an example that should be followed by those Parliaments of the region, which have not yet established similar bodies, since it would clearly enhance contacts among the parliaments of the region.

But before addressing the actual topic of this conference, let me say a few words about the Stability Pact itself.  As you will know, the main task of the Stability Pact is regional cooperation and supporting the region on its way towards European Integration.  This is a process, and measuring success is thus not as easy as measuring GDP growth.  But if we look at the region today compared to three years ago, we can clearly see that Governments talk to each other on a much more regular basis than before – and this applies not only to the governmental level as we can witness here today by simply looking around.  This is a piece of European normality and the revitalized SEECP is the most visible sign of this changed spirit.  The Stability Pact has clearly contributed substantially to achieve this. 

Having said that, I am of course fully aware that infrastructure is the one element of the work of the Stability Pact, which is crucial in terms of public perception.  This conference is the best example for it.  This is what people want to see and it is what Governments are measured by.  Keeping proportions is thus all the more important.  I welcome that this conference is looking at infrastructure as a main topic.  However, infrastructure projects are expensive everywhere; they take a long time to implement and they are never quick.  In this respect, I regret the name Quick Start Package, which was termed at the First Regional Conference in March 2000 in Brussels and included 34 infrastructure projects out of a total of 244 Quick Start Projects. 

The expectations raised by the Sarajevo Summit, which inaugurated the Pact, were very high – unrealistically high.  This is a part of political psychology, which is hard to control, and in all fairness, I think it is not something, which the Special Coordinator can influence much.  I understand these expectations.  After having worked in South Eastern Europe for many years, I share many of them.  But we do ourselves a disfavour, if we pretend to be able to implement projects, including infrastructure, in South Eastern Europe in a much shorter time than would be needed even in developed economies of – let us say – Western Europe.  Here I ask for your support in injecting reality. 

But after these introductory remarks, let me now give you a short overview of what has been achieved so far – and I think the achievements are quite substantial – in the three areas of concern to this conference: Infrastructure, Trade and Organised Crime.

In the field of infrastructure, out of the 46 projects actual work on the ground has started on 23 – a substantial increase compared to last year – and five more projects are expected to physically commence work before the end of the year.

I assure you, I will continue to work intensely on removing obstacles to speed up the implementation of the remaining projects.  But we need to move beyond this initial 'start up' phase of convening pledging conferences and monitoring project lists, to a more strategic approach of sectoral priorities at the regional level.  The key principle for selecting future projects is that they have to contribute to and be part of a strategic approach to develop infrastructure networks of regional importance.  As a good example I refer to the corridors, which were agreed to by the Governments of South Eastern Europe.

A first step in this regard was the creation of the Infrastructure Steering Group in the summer of 2001.  This group provides the International Financial Institutions with a framework within which they can agree on a policy towards infrastructure development in South Eastern Europe and avoid duplication of effort or worse.  Please note, South Eastern Europe is the only region in the world where such a co-ordinating body amongst International Financial Institutions exists.

Another infrastructure sector where an important breakthrough is underway is the electricity sector.  With the South East Europe Electricity Regulatory Forum (SEEERF) initiative, the European Commission, in close co-operation with the Stability Pact, has proposed a coherent vision regarding the development of a competitive Regional Electricity Market (REM) in South East Europe.  The potential benefits of the SEEERF process are significant:

-         increased reliability in electricity supply;

-         lower operating costs;

-         reduced needs for additional capacity investments, especially in generation;

-         opening of opportunities for private investments in infrastructure;

-         vastly improved opportunities for intra- and interregional trade, including peak load by hydro producers in the region; and

-         lower prices for the end customers.   

However, the challenges entailed in the transition to the new systems are considerable.

Let me now say a few words about Trade.  Considering the size of the countries of South Eastern Europe, trade liberalization is crucial for sustainable economic development.  By opening up the various economies, a common market of 55 million consumers will become reality next year.  If we compare that to the economic development of elsewhere in Europe, then we all know that free trade is in many ways just as important as infrastructure improvements.  In fact, they should go hand in hand.  This is what we do!  And apart from that, it is also a prerequisite for further integration of the region into European structures.   

The Memorandum of Understanding on Trade Liberalization and Facilitation of June 2001, negotiated under the auspices of the Stability Pact Trade Group, provides the countries of the region with a comprehensive road map for liberalizing intra-regional trade.  This road map to free trade corresponds to their obligations to the EU and the WTO and is in line with political realities in South East Europe.

The Memorandum commits the signatory countries to take concrete trade liberalisation and facilitation measures.  The first article required the countries to complete a network of bilateral Free Trade agreements (FTAs) between themselves by the end of this year.  I am pleased to tell you that substantial progress has been made in this respect.  Out of the 21 agreements, 11 are finalised and 8 are under active negotiation.  I would like to take this opportunity to congratulate those countries that are close to completing their quota of agreements and to urge those who have been a little slower in their negotiations to redouble their efforts as we enter the final stretch.

While the FTAs constitute a major step in trade liberalisation, these symbols of political willingness must be translated into actual improvements on the ground.  Governments must continue to improve the legislative and institutional framework and the international community should provide political, technical and financial support for these efforts.    

The Governments of the region are clearly committed to trade liberalisation, the Joint Statement issued in Belgrade on 7 October re-affirmed this.  However, trade liberalisation is not an easy option and Government must now tackle the complex task of implementation.  The Stability Pact Trade Group provides a unique forum whereby senior trade officials from the eight countries of SEE, international organisations (European Commission, World Bank, WTO) and third countries (among others Germany, Switzerland, UK, USA) can work together to promote the difficult task of implementation and progress trade liberalisation in South Eastern Europe. 

Fighting organised crime – I am now coming to the third topic of this conference – is a necessary flanking measure to foster economic growth.  I therefore very much welcome, that this conference addresses organised crime in conjunction with trade and infrastructure.

The Stability Pact has launched two initiatives in this respect: SPOC, the Stability Pact Initiative on Organised Crime; and closely related: SPAI, the Stability Pact Initiative on Anti-Corruption.  The SPOC initiative covers the adoption of policies, strategies and legislation against organised crime.  It aims to develop co-ordination and co-operation mechanisms amongst the countries of the region, especially regarding information exchange in the field of organised crime.  Considering the international nature of organised crime, this is of the utmost importance. 

The SPAI initiative, on the other hand, assists the countries of the region to enact needed legislation, build up institutions and develop civil society components to fight corruption.  The countries participating in the initiative benefit from co-ordinated technical assistance programmes, based on individual country assessments.

I would like to launch an appeal at this point: in the fight against organised crime and corruption we need local participation – willingness and leadership of the South East European Governments.  We can provide instruments and expertise, but only with committed Governments in the region, will these efforts yield results.

To conclude, I think we can look back to a series of quite significant achievements over the past three years.  Certainly, much remains to be done – not just in the field of infrastructure and trade – but we have to remember where we are coming from.

I look forward to the discussions during the next two days and thank you for your attention.