Five Years – Quid factum est, Quo vadis Stability Pact?

So here we are – five years after the Sarajevo Summit in July 1999.  I do not wish to dwell on memories or turn this into a celebration of our 5-year anniversary, but rather this is an opportunity to take stock of developments in the region and the role of Stability Pact therein.  In reviewing these past five years, let me take the opportunity to thank my predecessor Bodo Hombach who was there when the Stability Pact was founded and has led it in the initial years.

The situation in South Eastern Europe today is obviously a very different one to that of five years ago.  The process of democratisation is clearly irreversible with successful democratic elections repeatedly held in all countries.  Formerly warring ethnic groups are today working more closely together to address common problems.  While the rate of economic development remains an issue, important foundations have been laid.  Furthermore, the focus in the security area has clearly moved from military to justice and home affairs issues; an obvious indication of stabilisation.  To illustrate the significant development the region has gone through it is also interesting to recall that Serbia and Montenegro – or Yugoslavia back then – was not part of the Stability Pact at its establishment due to political reasons.

While growth rates in South Eastern Europe have risen substantially, the rate and sustainability of economic growth are probably our biggest current concerns.  This is 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.  Since 2000, in terms of attracting investment a gap has opened in South Eastern Europe.  In 2003, Bulgaria, Romania, Croatia and Serbia-Montenegro secured more or less four billion Euro in foreign direct investment in 2003; the four remaining Stability Pact beneficiary countries have just managed to secure one billion Euro together.

The violence in Kosovo in March has to be condemned.  This was a serious setback for the development of Kosovo as well as staining the image of the entire region internationally.  The Stability Pact will continue to foster the integration of Kosovo into regional activities through enhanced cross border and cross-boundary co-operation in full compliance with UN Security Council Resolution 1244, and to consider ways in which the Stability Pact could further support the Standards Implementation Plan.  Let me highlight at this point that UNMIK/Kosovo is actively participating in more than 20 Stability Pact initiatives.

Nevertheless, the region is clearly on the right track.  The positive Avis of the European Commission regarding the Croatian EU Membership application is an encouraging development for the region as a whole.  It clearly shows that the commitment made by the EU at the Thessaloniki EU-Western Balkans Summit last June is a serious one and the EU is devoted to bringing these countries into the Union once they are ready.  Considering the significant transformation the EU is undergoing following the recent enlargement by ten new member states, this is an important reassurance.  Similarly, the recent Macedonian application for EU membership has to be seen as a commitment by Skopje to further reform and good-neighbourly relations.

While the Stability Pact can certainly not take all the credit for these developments, it has clearly supported these positive developments by enhancing regional co-operation and finding common solutions to some of the problems the region is facing.

The establishment of the Stability Pact at the Sarajevo Summit in July 1999 marked the initiation of a comprehensive long-term conflict prevention strategy for South Eastern Europe.  Five years on, I think we can say that moving from ad-hoc interventions to a regional approach in addressing the problems of the region has proved to be successful.  This mechanism, that we call the Stability Pact, now provides an established platform for a regionally coordinated reform effort, thereby achieving one of the major goals set by the Sarajevo Summit in 1999.

So, what has worked, what has not?  

·         The notion of improved regional co-operation has made inroads in all our beneficiary countries, encouraged as a precondition for further European and Euro-Atlantic integration.  It is interesting to see that the international organisations and international financial institutions are also increasingly using this regional approach for large parts of their programming.

·         The concept of peer-review and peer-pressure has had a significant impact on the success of many SP activities.  Seeing your neighbour move ahead faster than you is a strong incentive to intensify your own reform efforts.

·         Matchmaking is another area, where I think the Pact has been quite successful.  Bringing together donors and beneficiary countries, available funds and possible projects, in a forum where all players interested in a particular topic can jointly set priorities is a new development, which has proven its usefulness.

·         The Pact has also successfully functioned as an honest broker and neutral forum for the different organisations and countries involved.  Through this forum, it has been possible to bring organisations, which do not usually work together, to engage in joint projects to the benefit of South Eastern Europe.

·         But not all of this would have been possible without the clear perspective given by the EU of future membership.  This has been the key driving force to ensure that the often difficult but necessary reform processes are continued.

Let me give you three short examples from each of the three Working Tables, to illustrate this.   Rightly or wrongly, the return of refugees is one of the litmus tests of democratic maturity in South Eastern Europe.  Despite strong initial hesitations, the Stability Pact brought the relevant Governments of Croatia, Serbia and Montenegro and Bosnia and Herzegovina together and facilitated close cooperation to allow for the return of refugees in this triangle.  The network of free trade agreements throughout the region is another example of regional cooperation and following the European and international experience – Western Europe did not become rich on governmental subsidies, but on free trade.  Finally, the question of borders – these were fought over only a few years ago.  Today, in the framework of the Ohrid Process on Border Management and Security, the countries of the region are jointly discussing together how to better manage them – an essential component of European integration.  

·         At the same time, we also have to admit that the task of complete donor coordination, which was given to the Pact by some of its participants, could not be achieved – and in the end is probably not fully achievable.  While many donors see the advantage of channelling their support to South Eastern Europe through different Stability Pact initiatives, it is obvious that donors want their own limelight as well and have different priorities of their own.  The Pact nevertheless provides a forum where those interested in a particular topic can coordinate their activities and agree on priorities together with the countries of the region.

The Stability Pact is constantly adapting to the changing situation in South Eastern Europe.  The time of the big donor pledging conferences is clearly over.  We also have to accept that the media attention has moved away from South Eastern Europe towards crisis areas in other parts of the world – while some might consider this unfortunate, it does indicate that there is no immediate crisis in South Eastern Europe anymore.  The work today is often the tedious work of ensuring implementation of the many important processes for which we have secured agreement.

Furthermore, the Stability Pact has also focused on a narrower range of activities than in earlier times.  While the early phase of the Pact sought to bring all activities in South Eastern Europe under one roof, the aim now is to focus on those areas of a regional nature where the Pact can bring added value.

So where are we going from here?   Let me be very clear at this point – our work is evolving, but we still have a long way to go.  I am the last person to cling to an institution whose time has passed, but I firmly believe that the Stability Pact still has work to do. 

The aim of the Pact has always been first, to stabilise the region after the horrible conflicts of the 1990s, second, to facilitate regional cooperation in order to gradually overcome the legacy of these conflicts, and third to support the region in ever closer European and Euro-Atlantic integration.

I think we can safely say that the first aim has clearly been achieved.   South Eastern Europe is a much more stable region today, even though violent clashes like those in Kosovo are of course a setback.  

Secondly, as mentioned earlier, the concept of regional cooperation is firmly embedded in South Eastern Europe by now.   It is be necessary to ensure that these efforts are sustainable, and this is only possible with a strong degree of regional ownership.  While the developments in this direction are very promising and particularly visible in the increasing role of the South East European Cooperation Process (SEECP), there is still some way to go.  Bringing more and more SP activities to the region has been one of my prime goals since taking office.  Numerous regional centres such as the SPOC Secretariat, the SPAI Regional Centre, and most recently the Sava Commission, have been set up.  Nevertheless, there are significant responsibilities that come with regional ownership and sometimes these seem to be overlooked.  Regional ownership requires strong political leadership and substantial administrative capacity in the region and while we certainly support this process, we should not raise to high expectations in the short term. 

Thirdly, further European and Euro-Atlantic integration: This is of course not an issue for the Stability Pact to decide upon.   The Pact can only support the countries of South Eastern Europe to meet step-by-step the necessary conditions for further integration.  As it has been highlighted at last years Thessaloniki Summit, the Stability Pact is complementary to the SAP, supporting the countries of the region in living up to the commitments made towards the EU and other partners.  We have come a long way on this track, but I think we all agree that there still remains much to be done and optimal use should be made of all available support.  

Regional cooperation – finding joint solutions to common problems – is the foundation of the European Union and to a degree also NATO.  Fully endorsing this notion is therefore the only path available in moving closer to the ultimate goal of European and Euro-Atlantic integration.

Finally, please allow me a few words of praise for the Stability Pact – including you, all our partners.  In the past five years, a degree of European normality has entered South Eastern Europe.  Contacts between Governments are no longer extraordinary, but have become an everyday fact of life at all levels of Government and society.

I cannot think of any other initiative where with a relatively modest budget, regional co-operation and good neighbourly relations have been instilled as an undeniable part of governmental conduct in eight countries in such a short time – a success story in foreign assistance in Europe.

I look forward to continuing this rewarding endeavour together with all of you.