I cannot but start my speech here in Bucharest today in any other way but to congratulate our host country Romania – as well as of course Bulgaria – on their upcoming accession to the European Union. This success has only been possible after a long and often difficult reform process in both countries. But this hard work has led to the desired results. It is a success for all of us and an incentive to double our efforts to ensure that the other countries of South Eastern Europe move ahead on the same path.

I think we are already moving ahead quite well and I am glad to say that the importance of regional co-operation for the process of European and Euro-Atlantic integration is better understood today than it was a few years ago. Regional co-operation is the basis the EU itself is built upon, and is therefore also a condition for the further integration of South Eastern Europe into the EU. These two processes – Enhancing Regional Co-operation and EU Integration – go hand in hand and the progress made in the past years in enhancing regional co-operation is a concrete step towards fulfilling one of the conditions for EU membership, good neighbourly relations. You do not leave your neighbours behind when joining the EU and I certainly look forward to having Bulgaria and Romania join the EU soon. They will have an important role to play as advocates for the region.

At the same time, many of the problems faced by South Eastern Europe can only be addressed on a regional basis – fighting organised crime and attracting foreign investment are good examples of this. Globalisation does not stop on the borders of South Eastern Europe!

Regarding the issue of attracting investment, I am glad to say that we have made good progress in the last couple of months in moving from the network of 32 bilateral free trade agreements to the creation of a multilateral agreement through the amendment and enlargement of CEFTA. This will not only increase intra-regional trade, but also make the whole region more attractive to much needed investment. The initialling of the modern and ambitious agreement by eight parties on 9 November in Brussels was an important breakthrough. But to make this a real success story for the region and not another example of the remaining rifts, we have to ensure that all the countries of the region will be part of this new CEFTA. This will require full commitment by ALL parties to find mutually agreeable solutions to the remaining issues.

Taking into consideration the considerable development in South Eastern Europe and the progress in many of the co-operation processes under the auspices of the Pact, we jointly took far-reaching decisions in Belgrade in May on the establishment of a Regional Co-operation Council to take over the role of the Stability Pact as the forum for regional co-operation in South Eastern Europe. The region is much more mature today and therefore can – and must – take greater ownership of its own affairs.

I want to reiterate that this phased evolution of the Stability Pact into a regionally owned framework should not be interpreted as the international community withdrawing its support or leaving the region on its own. On the contrary, many of our international partners have assured us that they will stay engaged, but want to see the countries of the region gradually taking more ownership of the process – politically, financially and also personnel-wise.

The agreed timelines for the implementation of these decisions are tight – by early 2008 the Stability Pact is to phase out and the new RCC to take over. The responsibility for implementation of this tight schedule is a shared one between the countries of the region, the international donor community and the Stability Pact Secretariat.

From the side of South Eastern Europe, it is in particular the SEECP – which considers itself the voice of the region – and Croatia as its current Chairmanship, which needs to take a leading role in this process. While I am glad to say that we have made progress on some fronts, full engagement from all sides will be required to make this transition a reality in the coming months.

The discussions in the recent months about the financing of the future Regional Co-operation Council and in particular the decision on the contribution required from the countries of the region make me hopeful that we will be able to achieve our ambitious aim. The pragmatism shown in these discussions by the South East European parties and the resulting commitment to contribute 1 Million Euro to the future running costs of the Secretariat are a very positive sign. I would like to use this opportunity to now call on the European Commission and other donors to live up to their commitments and agree on adequate co-funding from the international side as agreed in Belgrade. We will need a structured dialogue to settle this issue by early spring next year. What is required is not just financial support, but also the expertise of our international partners who have been supporting this process over past seven years.

We have also made good progress in further defining the portfolio of the RCC based on the five priority areas for long-term regional co-operation agreed on in Belgrade: Economic and Social Development, Infrastructure, Justice and Home Affairs, Security co-operation, Building Human Capital; as well as Parliamentary Co-operation as an overarching theme.

We have had substantial discussions on many of the individual task forces and initiatives in the Working Table sessions yesterday and in front of you is the 'Report on Regional Ownership and Streamlining of Stability Pact Task Forces and Initiatives'. Since these decisions are in particular a task for the countries of the region, the preparatory discussions in the last two months have largely held with them. But through are our meetings yesterday and today we are opening up these discussions again to all Stability Pact partners. The report in front of you provides an overview of the individual strategies and brings them together with the objective of ensuring that the Regional Co-operation Council will be able to rely on a set of sustainable regional co-operation processes that address the priority areas for regional co-operation as identified by the Belgrade Regional Table.

The RCC can provide the political framework for these focused thematic processes as well as a forum to ensure continued donor involvement. However it must be able to rely on processes that are self sufficient from a day-to-day management point of view.    One will also have to carefully assess the exact relationship the different task forces and regional centres should have with the RCC - and this might also change over time. Some will require a closer relationship and more support, others will only need occasional ad-hoc political support. I look forward to the debate here today on this issue, because we need to come to concrete decisions on this issue by spring next year.

But let me stress again, all task forces need to be far more self-sufficient – regional ownership and leadership is not only required on the level of the RCC, but also in each and every task forces and initiative, which is considered to be of lasting importance and thus to be continued in the framework of the RCC.

The report in front of you is based on extensive discussions with the task forces and the countries of the region, but it is of course only a proposal from our side. It will require decisions from the countries of the region – and also the donors – during the implementation phase in the course of 2007. This process will require strong political leadership by the countries of the region in priority setting and implementation, as well as the defining the exact role of the RCC itself and in relation to the different areas.

While we can see good progress in implementing our joint decisions of May this year, please allow me to also outline what steps are still required and that need your urgent attention in the upcoming period.

The next months will – in particular – require decisions on the side of the SEECP, which needs to define its relationship with the RCC. The Regional Table has taken decisions on the future of the Pact and has suggested that the newly established RCC should have a close relationship with the SEECP. But the ultimate decision on this – of course – lies with the SEECP itself, since this will essentially require an amendment of its Charter. The countries of the region also need to start coming to an agreement on the location of the Secretariat and an eventual Liaison Office in Brussels as well as personnel questions such as candidates for the post of the Secretary General.

In addition, a detailed mandate and legal basis for the RCC needs to be defined. This is important to allow the RCC to be established on firm legal grounds and the necessary financial means to be made available in an appropriate manner – we are all accountable to our taxpayers and must have the structures in place to prove that the funds are spent correctly.

Decisions on all these issues have to be taken in the months running up to the back-to-back meetings of the SEECP Summit and the Regional Table in May/June next year. The SEECP Summit and the Regional Table will be decision time.

In conclusion, I think it is in all our interests to ensure the sustainability of the co-operation processes initiated within the Pact and thus safeguard its legacy for South East Europe. There are two pre-conditions for this to be successful: enhanced regional ownership and continued international support in the transition phase. This is the outline for our discussions today:   We need to have a Regional Co-operation Council which allows for continued international involvement and support while enhancing regional ownership and we must take the necessary decisions to make this a reality in a transparent fashion. We can make proposals on how this can be achieved in the future, but the responsibility lies with the South East European Governments and it is you who must take the decisions.