Moldova joined the Stability Pact in June 2001 – more or less three years ago.  A good time therefore to take stock of what has been achieved and where we still need to make a greater effort to move forward.  Moldova and the Stability Pact – this has not always been an easy relationship.  When Moldova joined the Stability Pact, it did not happen without opposition from some of our partners.  Most notably, the problem of Transnistria had to be explicitly set aside and remain outside the Stability Pact involvement.  But even beyond that, questions were raised regarding the adequacy of considering Moldova a part of South Eastern Europe.  Are not the problems Moldova faces quite different from those in South Eastern Europe for which the Stability Pact was created?  Is not Moldova's historic, political and economic background as a part of the former Soviet Union rather different from that of the rest of South Eastern Europe?

We have clearly left these discussions behind us.   Moldova is one of the eight beneficiary countries of the Stability Pact and despite these difficulties and hesitations, Moldova has been an active participant in the Stability Pact.  Among other things, it has held the regional co-chairmanship of the Working Table on Security Issues from July 2002 to June 2003.  The Stability Pact remains committed to continue efforts across the board to integrate Moldova into as many activities and programs as is practically feasible.  But this is of course a two-way street, requiring commitment and engagement from both sides.  

I will not go into details regarding the different areas of engagement, since this will be the topic for the discussions in the course of the day.  But let me highlight a few areas, where important steps have been taken; but also a few areas where stronger efforts from the Moldovan Government would be necessary, to prevent Moldova from falling further behind its neighbours in South Eastern Europe.

Let me start with Working Table I. Moldova is actively participating in the Stability Pact Media Task Force.  The Media Working Group established here in Moldova under the auspices of the Task Force is a good example of coordinated efforts between the Government, NGOs working in the sector and media professionals.  While this certainly a very positive development, the media sector still remains an area of concern, particularly regarding the development of the state broadcaster into a public broadcaster, but also concerning the implementation of the existing legislation.  This is an area under great scrutiny by the international community.  Further efforts will be necessary to allow for a free and lively media environment to develop, an important component of every open society and functioning democracy.

Local Democracy and Cross-Border Cooperation is a second field I would like to mention.  Decentralisation, empowering local and regional authorities is a central feature of the European development.  The Council of Europe as well as its Congress of Local and Regional Authorities has done important work in this respect, also here in Moldova.  Viable local and regional authorities are a part of a democratic society.  Supporting decentralisation processes and thereby also enhancing cross-border cooperation on the local level is one of the priorities of the Stability Pact.  But the preconditions have to be set by the respective governments.  The recent decision to re-establish the system of raions – moving from 12 counties back to 33 much smaller and less efficient units – is a step into the wrong direction, as has been highlighted by the Council of Europe. 

Free trade is certainly a very positive example of Moldova's engagement in the Stability Pact.  Once it joined the Stability Pact, the country has aligned itself with the Trade Memorandum of Understanding and has almost caught up with the other seven partners in finalising its integration into the network of Free Trade Agreements.  The final outstanding agreements will be signed hopefully within the next few months.  But the next step, the implementation of these Free Trade Agreements will be a significant challenge.

Moldova is furthermore involved in the so-called Athens process, which aims to create a Regional Energy Market in SEE modelled on the EU internal market.  Moldova is an observer to the process.  Requests for full participation in the process have been denied, especially by the European Commission and some EU Member States.  But some of the actions undertaken by the Moldovan Government have played into the hands of those trying to keep Moldova out of the process.  Being an observer or a full participant – by fully applying the standards outlined in the Memorandum of Understanding and thereby harmonising with EU standards, Moldova can step by step overcome the existing reservations by some of the partners and move closer to the Regional Energy Market.

Improving the investment climate is probably one of the most important preconditions for future development of Moldova and the whole region.  The Stability Pact Investment Compact together with the Business Advisory Council held an investment promotion mission to Moldova in autumn 2003.  Discussions were held with the government and representatives of domestic and international business.  While there is interest to invest in Moldova, the business climate remains difficult.  Progress in implementing the reform priorities identified by the Investment Compact is limited.  This is an area where Moldova is lagging behind the other SEE countries and loosing out on opportunities.

Regarding the fight against organised crime, Moldova's participation in the Bucharest based Transborder Crime Fighting Centre is an example of its willingness to engage in regional cooperation in view of addressing joint problems with European partners.  Issues such as the fight against organised crime and trafficking of human beings clearly require regional approaches.  Through close cooperation with the neighbours, Moldova can show its commitment.

But there are also numerous Stability Pact activities where Moldova's seat has remained empty most of the time.  The reasons can be as simple as the lack of training – particular language training – and limited travel budgets.  But the political message is one of disinterest.  Support is available, but the effort to engage has to come from Moldova.

Through reinforced reform efforts, Moldova can build up its European credentials.  Through full endorsement of the necessary reforms, the Government can not only move the country forward, but also step by step pull down the still existing barriers towards Europe.  The aim of the Pact is threefold: to facilitate regional cooperation, to support the countries of South Eastern Europe in living up to their international commitments, and to facilitate their integration into European and Euro-Atlantic structures.  In this respect, the Stability Pact will support Moldova in meeting the requirements for closer links with the European Union, as they will be laid out among others in the Action Plan under the European Neighbourhood Policy.  But the Pact can only provide support.  The effort itself has to be made by the Moldovan Government.

In this respect, Moldova should take full advantage of the enhanced EU engagement, as it is visible in the European Neighbourhood Policy.  The interest in Moldova has clearly grown in the course of the past year and a there is a greater understanding that a stronger EU engagement is required.  The current round of enlargement will significantly shift the European Union towards the East.  From 1 May, the EU will be affected by developments in Eastern Europe to a much greater degree and will also have to redirect its policy making in this direction.  From 2007 onwards, we will probably have a common border with Moldova and other Eastern European countries.  This of course implies that we need to think about our relationship to these new neighbours urgently.  The EU's European Neighbourhood Policy is an important and very welcome step in this direction.

Let me clarify something at this point: The Stability Pact and the European Neighbourhood policy are not rivalling or mutually exclusive concepts.  The European Neighbourhood Policy is obviously the central policy framework of the EU towards Moldova and other neighbours.  The Stability Pact will support the implementation of this policy where Moldova is concerned and activities within the Stability Pact can and should be taken into consideration in the context of the European Neighbourhood Policy.

In coming to an end, let me reiterate one point which is dear to me: The Stability Pact stands ready to support you in the reform efforts necessary in Moldova.  But the initiative has to come from you.  The required reform processes are difficult and the benefits will only be reaped in the longer term.  Entering this process therefore requires a clear belief and commitment of where Moldova’s future is seen.  But if the path is clear, every step will lead you closer to this goal.  And with every reform effort undertaken, Moldova will become a more ‘European’ country.