Regional Table of the Stability Pact

Tirana

05 December 2003   

  Looking back, I think we can safely say that the year 2003 has been a very successful year for South Eastern Europe  .  The region has clearly moved ahead and is on its way towards closer integration into European and Euro-Atlantic institutions.  The Thessaloniki EU-Western Balkans Summit was a watershed in this respect.  Furthermore, the conclusion of the current round of EU enlargement in May next year will open up the prospect for South Eastern Europe as the obvious next region to be brought into the Union .  I think we have to thank the Greek and Italian EU Presidencies for their successful efforts to keep South Eastern Europe high on the European political agenda.  

We should also acknowledge positive developments in the region itself.   The apologies exchanged between the Presidents of Croatia and Serbia and Montenegro were an important sign of the improving situation in South Eastern Europe .  Together with the subsequent apology by the President of Serbia and Montenegro towards Bosnia and Herzegovina , they indicate a growing acceptance that good-neighbourly relations and regional cooperation are a necessity for the further development of the region.  Respect for each others’ rights and fundamental freedoms are the cornerstone of all our work.  They form the basic condition for democratic and stable societies. 

In Thessaloniki  clear commitments were made and the Thessaloniki Agenda provides us with an outline of the most important steps required to move ahead.  The Summit created a dynamic that must be maintained by all partners if we want it to have a lasting impact.  Therefore it is vital that we now make sure that steady progress is made along the path outlined in the Agenda and that we all fulfil our commitments.  

Regional co-operation, as highlighted in the Agenda remains a crucial element of the process of further European integration of the region.  I think the region can point to a number of steps that have already been taken in the few months since the summer, facilitated and supported by the Stability Pact.  To name just a few of the most important:

The Stability Pact Trade Ministerial in Rome in November has concluded the network of free trade agreements and also – as requested in Thessaloniki – opened the way for discussions on streamlining the FTAs to a degree that will establish a free trade area in South Eastern Europe;

The MoU on the Regional Energy Market, expanded to the gas sector,  which will be  signed in Athens next week, will fulfil another requirement mentioned in the Agenda, and will pave the way for negotiations on a legally binding treaty, essential to attract investment into the energy sector;

Another important step has been taken regarding an agreement on a regional approach to transport infrastructure.  The MoU on the Core Transport Network, which will be signed in early 2004, provides a clear framework for prioritising and financing of future infrastructure projects;

Regarding the crucial area of fighting organised crime and corruption, the SEECP and SPOC have worked together in follow-up of the London Conference and in preparation of the EU-Western Balkans   Justice and Home Affairs Ministerial in Brussels last week. 

The complementary roles of the SAP and the Stability Pact are increasingly obvious.   At the same time, let me highlight that the Stability Pact and the SAP cannot be equated.   While the Stability Pact is certainly supporting the SAP where appropriate, it is broader both geographically and thematically.  The Stability Pact, with Bulgaria , Romania and Moldova as partners in addition to the five SAP countries, acts as a horizontal platform between the SAP, the Accession Process and Moldova for regional cooperation processes, bridging existing gaps and putting all countries on a similar level of engagement. 

In this context, I would like to underline the importance of the European Neighbourhood policy of the EU.   Enlargement will significantly change the European framework for South Eastern Europe  .  Considering the trans-regional implications of issues such as organised crime, I think there is a need for close coordination with the European Neighbourhood policy based on the good experience with SP-SAP complementarity.  

Following yesterday’s Working Table sessions and since you have the Annual Report on the Activities of the Stability Pact in 2003 in front of you, I will focus on the priorities for 2004.  The six Core Objectives we agreed on a year ago were meant to be the focus of our work beyond the year 2003.  While we certainly have to continue to monitor the development in the region and adapt our priorities accordingly, we should remain on course regarding the existing Core Objectives for the year 2004.

Besides, the security and defence related activity areas have been progressing steadily.  The stability of the region in this regard has improved dramatically.  In particular the field of defence conversion is an area offering itself for exchange of knowledge and lessons learned on a regional basis, considering the encouraging experiences in some of the countries.

Overall, the most pressing challenge at the moment are the continuing economic difficulties in South Eastern Europe, exacerbated by high unemployment and in parts severe lack of investment.   We have to be aware of the possible political implications of the difficult economic and social situation in the region.   Ensuring sustainable economic development is vital for continued progress in South Eastern Europe.  Stimulating such economic growth, including attracting investment, requires improvements in the macro and micro-economic environment as well as in the overall rule of law.  

The Stability Pact has focused considerable attention to improving the overall macro-economic environment for the promotion of sustainable economic development, most notably through the network of free trade agreements.   However, unless there are companies able and willing to take advantage of this improved environment our efforts will have been in vain.  Therefore, I am calling on an increased emphasis also on the micro-economic framework conditions for businesses in the region, in particular through the development of entrepreneurship, investment promotion and employment generation.  The Stability Pact has a number of instruments to address these different aspects, which need to be better interlinked to jointly address the various preconditions for economic development.

Closely related and a crucial precondition for any viable economic development, is the need to strengthen democratic institutions and improve the rule of law, in particular regarding the fight against organised crime and corruption.  Without strong democratic institutions, including an independent and functioning judiciary and a guarantee that contracts will be enforced if necessary, we will not have significant foreign or domestic investment in the region.  We need to move forward to serious implementation of the commitments made already.  In the field of fighting organised crime and corruption, the UN Convention against Transborder Organised Crime provides a framework that – if fully implemented – would allow efficient prosecution of organised crime groups.  I would like to note at this point that organised crime clearly affects South Eastern Europe as well as the EU and others.  We need to invest into efforts to combat this now, if we do not want to face an even more problematic and costly situation later.

In this respect, I would like to underline the growing importance of the parliaments in the region in providing a forum for evaluating the reform processes and passing necessary legislation.  As a former member of parliament, I know that individual dedication is not always sufficient.  It is of the greatest importance to have the right instruments at your disposal for your legislative work.  Well-trained and equipped parliamentary staff is crucial – similarly the possibility to collect experiences in other countries and regions to see how similar problems were addressed.

Let me say a few words about the Transformation Experience Exercise in this context.  We have organised two high level workshops this year, bringing together the Central European countries and those of South Eastern Europe.  Firstly, it was impressive to see the extent of already existing contacts.  But there are still numerous areas – especially on a regional level – were we could make better use of the valuable experience gained in the transformation processes in Central Europe.  To be productive, this would have to be on a thematic level and involve those experts in South Eastern Europe working on a specific issue.  The role of parliaments in the accession process would certainly be a topic we could and should address.

While we can try to support South Eastern Europe in overcoming the different challenges, regional ownership of these reform processes is essential.   I would like to underline that we have seen considerable progress in this respect.   We have been working together very closely with the SEECP-Chairmanship of Bosnia and Herzegovina.  

Nevertheless, I would also like to say that we cannot allow regional ownership to become a hollow shell.   There are certain responsibilities that come with regional ownership.  While we have many positive examples of regional ownership, I would like to bring two illustrative examples to your attention.  After an extremely successful conclusion of the Framework agreement on the Sava River Basin, which was signed by the countries involved exactly a year ago, the process has stalled and we still do not have a final agreement on where the Seat of the Sava Commission will be located, impeding progress significantly.  A very similar story regarding the network of free trade agreements, negotiated under the auspices of the Stability Pact.  Negotiations on all of the 21 agreements were finalised early in the year.  But delays in the ratification of the agreements in Serbia and Montenegro have slowed the process for more than half a year.  While you will know that it has been one of my prime aims since I became Special Coordinator to enhance regional ownership and move Stability Pact activities to the region where possible, I have to stress that these examples are not a show of regional ownership and responsibility.  I think we need to work closely together to draw our lessons from these experiences. 

Let me take this opportunity to welcome Ambassador Janez Premoze as the new Chair of the Working Table on Security Issues.   I am very pleased to have him on board.  Slovenia has always played a very constructive role in the Stability Pact and as an incoming EU Member State, the important bridging role of the country between the EU and South Eastern Europe will only grow.  Of course, this implies that we will be loosing Ambassador Vladimir Drobnjak as a Chair, which I deeply regret.  I always highly valued his advice and the important role he played as a Working Table Chair coming from the region itself.  Let me also take this opportunity to welcome the new Directors of Working Table I and III, Ambassador Jean-Daniel Bieler and Ambassador Pieter Verbeek who have joined us in September and have brought valuable new impetus to the two Working Tables. 

Let me close by saying a few words about the Stability Pact itself.   The Pact has gone through numerous reforms and restructuring debates in its short life, some good, some not so good.   It was created to be a process and not a fixed institution and will therefore continue to evolve and develop with the situation in South Eastern Europe.  Just as the situation in 1999 was different to today’s, the Pact was certainly a different institution than it is today.  The time of the big donor conferences is certainly over.  South Eastern Europe is – luckily, I must say – most of the time out of the media, and so is the Stability Pact.  We have moved from the high visibility events and donor conferences to the more mundane, but just as important work of implementing the necessary reform processes.  

I think I can safely say that the Stability Pact is in a consolidated position today, much more so than only recently.  The difficult but important task of streamlining the work of the Pact we underwent a year ago has clearly strengthened the Pact by focusing its activities on those areas where we can add value.  The Thessaloniki Summit in June has also had a positive impact.  Regional Co-operation has clearly been reaffirmed as a precondition for closer European Integration.  The Stability Pact was mandated to facilitate cooperation in the region and thereby support South Eastern Europe on its path towards Europe.  Finally, and even though you might call this an administrative matter, I would like to thank Javier Solana and Chris Patten – and also quite personally Reinhard Priebe, who has made this transfer work in practice – for putting the Stability Pact on a secure longer-term financial basis, which will allow us to focus on our work in support of South Eastern Europe.

Let me finish on this positive note – thank you.