Let me start my remarks by conveying Fabrizio Saccomani’s apologies    for not being with us today. As you all know, Fabrizio has been the longest serving Chairman of all Working Tables in the Stability Pact (SP). In spite of his recent nomination to the demanding position of Deputy Governor of the Central Bank of Italy, he has accepted to stay on as Chairman of Working Table II and fully intended being here today.  However, he has been asked at short notice by the Governor to replace him at a meeting of the European Central Banks Governors. We look forward to having him back with us next May/June in Zagreb.

Under the auspices of Working Table II (WTII) , the countries of the region along with the international community have been putting into place many of the economic and social building blocks necessary for the overall development of the region – ranging from infrastructure to trade, investment and social cohesion.    I believe that due to the hard work of all parties here, we now have the foundations of a strong regional co-operation strategy for economic and social development.  Sometimes this is not fully recognised but I am very pleased that all of the areas have been identified as of continuing importance for regional co-operation as the SP transfers responsibility to the Regional Co-operation Council.

I am pleased to open this meeting with a positive progress report on the development of the new Central European Free Trade Agreement – CEFTA 2006 - a key building block for trade and investment.

Under the auspices of the Stability Pact, the Parties have, in line with the mandate given by SEE Prime Ministers in April, negotiated a modern and ambitious agreement.   This encompasses new domains such as investment and intellectual property rights protection, competition, public procurement and state aids. Moreover, it includes strengthened mechanisms for the settlement of inevitable trade disputes.

I wish to congratulate the Parties for negotiating such a complex agreement in a relatively short span of time – the first round of negotiations were only held in June. My gratitude goes also to the European Commission and the international advisers who have allowed the Parties to benefit from best practices in regional trade agreements at international level.   Through their support, we have ensured that this agreement is fully compatible with WTO and EU standards, rules and regulations.

However, last Thursday in Brussels, only eight of the ten parties were able to initial the agreement.   Therefore at present the parties risk not fulfilling the mandate set by SEE Prime Ministers which said that it must be an inclusive agreement.   In the agreed minutes of last Thursday’s meeting, all parties reaffirmed their commitment to an inclusive regional agreement and we sincerely hope that Bosnia-Herzegovina and Serbia will be in a position to sign the Agreement on December 19^th in Bucharest.  I would like to take this opportunity to call loudly and clearly on all parties – and I underline: all parties - to show the necessary flexibility and spirit of co-operation to make it possible for this to be an inclusive agreement to boost trade and economic development among all parties in   the region.

I would like to emphasise that for the international community and foreign direct investors, this agreement matters not only because of its obvious economic advantages, but also because of the strong and reassuring political message of commitment to regional co-operation that it will deliver, if signed by all parties.

On the investment climate – a topic which is clearly linked to trade liberalisation - we have a new and very authoritative assessment on progress in the region thanks to the release, last Friday in Paris, of the Investment Compact Reform Index. Congratulation to the team for a solid piece of analysis of which you will hear more later today!

This indicator which will be updated every year is important not only for the political decision makers in the region as they seek to compete in the fierce global market for FDI but also for the business community in the region and internationally. We expect the countries of the region to progressively take the lead in assessing the investment climate in the framework of peer reviews organised by a high level SEE Investment Committee that will be established in early 2007.

Let me take this reference to the business community to welcome the decision by the Business Advisory Council to continue with its meaningful counselling role even after February 2008, under the auspices of the Regional Co-operation Council and with the efficient support of the BAC secretariat in Thessaloniki. With SECIPRO also being based in Thessaloniki, there is now an interesting discussion underway regarding a centre for the promotion of investment and business activity, favoured by the Greek government in the context of the RCC. There may be other co-operation areas that could be linked to the Thessaloniki location but this is not to be decided within the realm of this Working Table meeting.

Moving to infrastructure, I would like to highlight energy. The    nice weather we are enjoying here in Bucharest should not make us forget that winter is arriving with its potential sequel of shortages and hardship. As recent events have shown, the overall balance between supply and demand for energy is extremely tight in Europe, a situation that requires an adequate level of coordination. I would like to repeat here the call I made during the WT II meeting in Belgrade for setting up mechanisms of consultation and solidarity in which all countries of a broader region – extending beyond the boundaries of SEE – will hopefully participate.                    

I would also like to briefly comment on Danube Co-operation Process– particularly as we are in one of the riparian states. I firmly believe that if the potential of the Danube as a Pan European transport corridor is to be exploited by the region, considering the efficiency of inland waterway transport in terms of costs and emissions.   The relevant countries must go beyond discussing issues of common concern and move to developing and implementing specific projects including environmental projects such as flood prevention.  I hope that the Ministerial meeting on the Danube Co-operation Process that will now be held in Spring 2007 will make concrete progress to allow DCP become more operational and develop specific projects that are properly co-ordinated.

On civil aviation, as you know the SP is co-chairing with the EC a process to introduce the functional airspace block approach in SEE – an obligatory element of the European Common Aviation Area Agreement.  At a technical level the initiative is making good progress but it needs urgently a decision by some key parties regarding their willingness to be part of this.

This brings me to my next and last remark, which relates to social issues. Day-by-day, people in SEE struggle with problems such as lack of employment, inadequate health care, scarce social housing and low levels of social protection. Notwithstanding apparent satisfactory economic growth rates, these issues can be a daily nightmare for large groups of population. My message to you is simple:

• keep incorporating the social dimension in economic reforms;
• keep social partners involved and consult with them during the reform processes; and
• try to allocate sufficient resources for social development.   We, in the SP, have been trying to promote this approach, but it is now very important that the SEE countries internalise this principle too and regard economic and social development as complementary.

With this call, I am happy to now give the floor to a very distinguished representative of our host country.     Mr. Darius Mesca, the State Secretary at the Ministry of Economy, Commerce and Energy.  This ministry is involved in most, if not all, of WT II initiatives and we look forward to your assessment.   Mr Mesca  the floor is yours.