Distinguished ministers, Mr Chairman, ladies and gentlemen,

Thank you very much for the opportunity to share with you my observations about the recent developments within South Eastern Europe  , and the cooperation between the Stability Pact and the SEECP.

First of all, I would like to congratulate the Romanian government for its constructive chairmanship of the process during the past year. The joint justice and home affairs campaign has been a crucial addition to the work of the SEECP, and the work is now being continued within Stability Pact initiatives on organised crime and anti-corruption. I hope that the close cooperation between the SEECP and the Stability Pact will continue in the future, and that we will exploit further synergies, and thus accomplish even more for the benefit of the region.

From the perspective of the Stability Pact, it seems that despite the delay in the Croatian membership talks, the region is on the right track toward reform and modernisation, and toward strengthening ties with the European Union. The delay itself should not necessarily be seen as a negative development – in fact, due to the current debate over the Constitutional treaty within the EU, it might be better to wait until there is clarity on the operation of the EU-25/27. The European Union continues to be a moving target for aspiring members, and it is important to be as certain as possible in the given moment, on what terms of membership are on offer.

Looking at the region, there are more and more positive developments to report. The signing by Romania  and Bulgaria of the accession treaty has won them the status of active observers, and they can now follow the work of the EU from the inside. Meanwhile, the positive feasibility study on Serbia and Montenegro , and the approaching status settlement for Kosovo are encouraging developments for the region as a whole. But there is still a lot of work ahead of us, and through the implementation of previous political commitments, we need to constantly work on keeping the 2003 Thessaloniki momentum alive.

While important foundations have been laid to improve the economic situation in the region, economic development is probably the biggest remaining concern. Growth rates in South Eastern Europe  have risen in the past few years, but the sustainability of this growth is problematic. This is exacerbated by high unemployment and – in parts – a severe lack of investment.  The necessary restructuring and reforms – which may temporarily lead to a stagnating or even worsening economic and social climate – will have political implications in many countries. In the meantime, Romania and Bulgaria might face the problem of high societal expectations, as – after joining the EU – electorates will expect a rapid improvement in living standards.

Regarding the area of defence conversion – on which the SEECP and the Stability Pact jointly organised a ministerial conference in March – we also need to stay focused and committed. The key security-related problems have moved from the military field to the field of justice and home affairs, but the restructuring of armed forces and military conversion will undoubtedly be challenging. At the same time, fighting organised crime should remain a key priority, not only because it impedes progress, but because it also has direct implications for the rest of Europe  .

Let me take this opportunity now to also inform you about some of the latest and upcoming developments in the work of the Stability Pact. In the area of parliamentary cooperation – our task force recently concluded a donor assistance overview and a needs assessment survey with the region’s parliaments. I noted with interest that the SEECP also took positive steps in this direction, when organising meetings for the chairs of the Foreign Affairs and the European Integration Committees. We welcome this process and our Parliamentary Cooperation initiative stands ready to support the SEECP in any future activities in this field.

As you all know, we are also working on promoting the implementation of the existing free trade agreements, and facilitating the resolution of current trade disputes. In this regard, we are hoping that the forthcoming Trade and Investment Ministerial in June will be a crucial breakthrough in the process of FTA implementation, and in moving toward a single free trade agreement. In a related area, the Investment Compact – in close co-operation with DG Enterprise and the ERBD – recently published its latest assessment of SME-policies in the region.

With reference to the energy community, the recent initialling of the treaty marked a change regarding the role of the Stability Pact. Our new focus will now be on facilitating the ratification process – through organising workshops with parliamentarians, through informing social partners, and through continuing to promote the involvement of the private sector. This is an area where – I am hoping – the SEECP and the Stability Pact will continue to work together very closely.

To conclude my brief intervention, let me say a few words about the coming working year within the SEECP. We all very much look forward to Greece  's contribution, and the Stability Pact will assist, wherever it can, to achieve tangible results. I would particularly like to draw attention to the importance of the implementation of the Thessaloniki Agenda; the energy process (electricity as well as gas); the continuation of the justice and home affairs campaign and the cooperation in defence conversion.

Greece  could also be instrumental in assisting the current reforms of the SECI Regional Center for Combating Trans-border Crime. These reforms are necessary in order to harmonise the Center’s operation with EU practices, and to ultimately prepare it for a possible future operational agreement with Europol. Among others, achieving a legal status for the SECI Center will also be an integral part of this process.

And finally, let me take this opportunity to brief you about the themes of the upcoming Regional and Working Table meetings of the Stability Pact, which will be held in Sofia  on May 17-18. Working Table I will review the recent developments and future challenges with regard to handing over initiatives into regional ownership, Working Table II will focus on infrastructure and health, while Working Table III will have defence conversion as its main theme. Meanwhile, the meeting of the Regional Table will this time discuss the issue of “regional ownership”, and the conference will hopefully highlight that while much has been accomplished, a lot remains to be done to reach the goals we set out at the launch of the Stability Pact.

Thank you very much for your attention, distinguished ministers. I look forward to our discussions today, and hope to continue a fruitful cooperation with all of you in the coming working year of the SEECP.

Thank you.