Ministers, Honoured Guests, Ladies and Gentlemen,

I am delighted to participate in this signing ceremony today. I would like to thank the EU Presidency, the European Commission and of course, our Greek hosts for organising this highly important event.

This is, as our British friends would say, a “red letter day” for South Eastern Europe and for the European Union. The implementation of this treaty will have far-reaching political, economic and social consequences for all of us. Some of these have been mentioned by the previous speakers including the development of a stable and efficient energy supply in South Eastern Europe, the introduction of market based regulatory systems and the geo-political importance of securing different supply routes for energy in Europe.

As the Special Co-ordinator of the Stability Pact for South Eastern Europe, I have a particular interest in the regional co-operation aspect of the Energy Community.

Regional co-operation is crucial for South Eastern Europe. From an economic point of view the demands facing this region are so great that only through regional co-operation can limited resources (human and financial) be put to the most efficient and effective use. As you know, in the energy sector alone, the World Bank has estimated that approximately €12.5 billion will be required in the next 15 years to rehabilitate existing power plants and construct new ones and this is on top of the €8.3 billion required for investments in transmission and distribution.

All of these demands must be placed in the context of the limited borrowing capacity of the SEE countries and the fact that donor grants are decreasing. Therefore regional co-operation to reduce costs and improve efficiency must be a key element of all SEE governments’ development strategies.

Politically it is also vital that the individual countries demonstrate their ability to co-operate with each other. Regional co-operation is a cornerstone of the EU accession process and one that it carefully monitored by the EU Member States and the European Commission. Regardless of where each country stands on the road to EU membership, whether you are a candidate country involved in detailed accession negotiations, whether you are negotiating a Stabilisation and Association Agreement or about to open such negotiations, one of the criteria for moving ahead is engaging with your neighbours in the region.

Regional co-operation is not an “optional extra” to your bilateral relations with the European Commission. After all, you are seeking to become a member of what is - even with the current debate on its future evolution - one of the most successful regional co-operation bodies in the world.

This treaty and the Athens process that preceded it are “text book” examples of an initiative that:

• fosters regional co-operation;
• expedites integration into the EU through adoption of EU acquis ; and
• has demonstrated excellent donor co-ordination and co-operation.

I would like to take this opportunity to highlight the excellent leadership role played by the European Commission and in particular its Directorate General for Transport and Energy since the launch of this initiative. Commissioner Piebalgs, you and your staff have displayed considerable political and technical skill as well as great dedication to SEE in developing and guiding this process to date and we count on you to maintain this leadership and support as we now enter the even more challenging implementation phase.

I must also mention the support provided by the international financial institutions and bilateral donors such as Canada, Germany, France and the USA and commend you on the co-ordination of this support. Again, I urge you to stay with this process as we move forward.

The SEE countries, on their side have also displayed considerable political courage, commitment and regional ownership of this process. You have agreed to adopt the EU acquis in this sector even before accession. You are undertaking the difficult task of restructuring your energy industry. Through the various Working Groups such as the Permanent High Level Group you are working with your neighbours and the international community to devise strategies to make the different aspects of the Treaty a reality.

The Stability Pact’s role in this initiative has been to complement the European Commission’s leadership by generating political consensus among the SEE countries and also promoting the process to the international business community - potentially a valuable source of expertise and finance for the region.

Apart from specific political interventions in SEE and with EU Member States, we have held high level meetings with Senior Advisers to SEE Prime Ministers and organised information seminars for SEE parliamentarians, who will, after all, have to ratify this treaty. We have also organised industry roundtables for international and domestic companies.

With the signing of the Treaty our role will evolve somewhat. We will continue to work with parliamentarians on this issue and to highlight opportunities to the private sector. But we will also seek to focus attention on the potential socio-economic impact of this Treaty. We want to encourage both the countries of the region and the international community to develop and implement suitable policies and programmes that can help limit the possible negative impact in areas such as restructuring of companies and tariff reform.

All of us here today have a role to play in ensuring that the progress we have made to date results in the further stabilisation of SEE, provides much needed sustainable economic growth and expedites SEE’s integration into European structures. Make no mistake, this treaty is a highly ambitious one – it sets high standards for SEE to reach and short deadlines for action. Therefore, we cannot sit back and think that the job is done once the signatures have been placed on the document. In fact, we should probably work even harder! However I believe everyone here today is committed to this process and I look forward to co-operating with you all in ensuring its success.

Thank you.