REPORT on Trade and Economic relations with Western Balkans

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

EXPLANATORY STATEMENT

OPINION of the Committee on Foreign Affairs (6.11.2008)

OPINION of the Committee on Regional Development (6.11.2008)

RESULT OF FINAL VOTE IN COMMITTEE

9.12.2008 - (2008/2149(INI))

Committee on International Trade
Rapporteur: Bastiaan Belder

Procedure : 2008/2149(INI)

Document stages in plenary

Document selected :

A6-0489/2008

Texts tabled :

A6-0489/2008

Debates :

Votes :

PV 13/01/2009 - 6.5
Explanations of votes
Explanations of votes

Texts adopted :

P6_TA(2009)0005

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
EXPLANATORY STATEMENT
OPINION of the Committee on Foreign Affairs
OPINION of the Committee on Regional Development
RESULT OF FINAL VOTE IN COMMITTEE

on Trade and Economic relations with Western Balkans

(2008/2149(INI))

The European Parliament,

– having regard to the Council Regulation (EC) No 1946/2005 of 14 November 2005 amending Regulation (EC) No 2007/2000 introducing exceptional trade measures for countries and territories participating in or linked to the European Union’s Stabilisation and Association process[1],

– having regard to the Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA)[2],

– having regard to the Presidency Conclusions of the Thessaloniki European Council of 19-20 June 2003, at which the promise was made to all Western Balkan states that they would join the European Union,

– having regard to the European Council decision of 16 December 2005 to grant the Former Yugoslav Republic of Macedonia the status of candidate country for EU membership and the Presidency Conclusions of the European Councils of 15-16 June 2006, of 14-15 December 2006 and of 19-20 June 2008,

– having regard to the decision adopted by the European Council on 3 October 2005 to open accession negotiations with Croatia,

– having regard to the Communication from the Commission of 5 March 2008 on ‘Western Balkans: Enhancing the European perspective’ (COM(2008)0127),

– having regard to Resolution 1244 of the United Nations Security Council of 10 June 1999,

– having regard to its resolution of 29 March 2007 on the future of Kosovo and the role of the EU[3],

– having regard to its legislative resolution of 12 October 2006 on the proposal for a Council decision on providing exceptional Community financial assistance to Kosovo[4],

– having regard to its resolution of 23 April 2008 on the 2007 Progress Report on the Former Yugoslav Republic of Macedonia[5],

– having regard to its resolution of 10 April 2008 on Croatia’s 2007 progress report[6],

– having regard to its recommendation to the Council of 15 March 2007 on Bosnia-Herzegovina[7],

– having regard to its recommendation to the Council of 25 October 2007 on relations between the European Union and Serbia[8],

– having regard to its legislative resolution of 6 September 2006 on the proposal for a Council and Commission decision concerning the conclusion of the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Albania, of the other part[9],

– having regard to its legislative resolution of 13 December 2007 on the proposal for a Council and Commission decision on the conclusion of the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Montenegro, of the other part[10],

– having regard to the Communication from the Commission of 31 January 2007 on the Extension of the major trans-European transport axes to the neighbouring countries - Guidelines for transport in Europe and neighbouring regions (COM(2007)0032),

– having regard to the Communication from the Commission of 5 March 2008 concerning the progress of exploratory talks regarding cooperation in the field of transport with the neighbouring countries (COM(2008)0125),

– having regard to the Treaty establishing the EU-South Eastern Europe Energy Community which was signed in Athens on 25 October 2005,

– having regard to the Communication from the Commission of 6 November 2007 on the Enlargement Strategy and Main Challenges 2007-2008 (COM(2007)0663),

– having regard to its resolutions of 16 March 2006 on the Commission’s 2005 enlargement strategy paper[11] and of 13 December 2006 on the Commission’s Communication on the Enlargement Strategy and Main Challenges 2006-2007[12],

– having regard to all other previous resolutions on the countries of the Western Balkans,

– having regard to Rule 45 of its Rules of Procedure,

– having regard to the report of the Committee on International Trade and the opinions of the Committee on Foreign Affairs and the Committee on Regional Development (A6‑0489/2008),

A. whereas the Thessaloniki European Council clearly formulated ‘the European perspective' of the Western Balkan states and indicated that the Stabilisation and Association Process would constitute the overall framework for European relations with the Western Balkan countries,

B. whereas Croatia is currently engaged in accession negotiations with the European Union and the Former Yugoslav Republic of Macedonia obtained candidate status in 2005,

C. whereas EU trade concessions and EU financial assistance have played a central role in the Western Balkans’ Stabilisation and Association Process,

D. whereas Croatia is well on the way to full membership of the European Union, with prospects of concluding the negotiations in 2009, has continued to meet the Copenhagen political and economic criteria and has been recognised as having a functioning market economy, which could serve as a positive example to the other countries in the region,

E. whereas on 17 February 2008 the Kosovo Assembly adopted a resolution which declared Kosovo to be independent; whereas the Council agreed on 18 February that Member States would decide, in accordance with national practice and international law, on their relations with Kosovo; whereas overall EU assistance to Kosovo is estimated at over EUR 1 000 000 000 for the period 2007-2010 covering support to Kosovo’s political and economic development and financing the EU contribution to the international presence in Kosovo,

F. whereas economic prosperity and full integration into the EU internal market and world trade system are essential for long-term stability and for sustainable economic and social growth in the whole Western Balkan region,

G. whereas sensitively phased-in market opening in the Western Balkan countries, including a country-by-country approach, fostering mainly the establishment of a regional market, is expected to contribute significantly to the process of political and economic stabilisation in the region,

H. whereas increased economic cooperation in the Western Balkan region also offers positive prospects for growth for the economies of the South-Eastern EU Member States and will foster their deeper integration into the single market,

I. whereas the Central European Free Trade Agreement (CEFTA) consolidated 32 bilateral free trade agreements in the Southern European Region into a single comprehensive regional free trade agreement that enhances the existing level of liberalisation in the region through a single network of equitable, transparent and predictable rules,

J. whereas the economic growth of the Western Balkans varies significantly, ranging in 2006 from 3% in the Former Yugoslav Republic of Macedonia to 10,3% for Montenegro; whereas the unemployment rates vary, in 2007 ranging from high unemployment rates such as in Kosovo (40%) down to lower rates such as in Montenegro (11,9%),

K. whereas the economies of the Western Balkans are highly dependent on foreign trade and whereas total imports and exports account for a substantial share of their GDP; whereas 61% of the region’s trade flows are to the European Union, though they account for only 2 % of the EU’s foreign trade,

L. whereas transport infrastructure and facilitation is crucial for economic development, social cohesion and integration,

M. whereas stronger support to the Western Balkans’ small and medium-sized enterprises (SMEs) is needed to guarantee sustainable economic growth, job creation and exports,

N. whereas the service sector, especially tourism, is playing an important role in the economies of the Western Balkan countries,

O. whereas small markets like those which exist in some Western Balkan countries are particularly prone to cartels, restrictive practices or the abuse of market power which may have a strong impact on regional economic growth, the unemployment rate and social development,

P. whereas the economies of the Western Balkans are very heterogeneous and have different characteristics, for example Albania, Croatia and Montenegro differ from the other Western Balkan economies in so far as the tourism sector is crucial for them,

Q. whereas all countries of the Western Balkans have concluded Stabilisation and Association Agreements (SAAs) with the EU,

General considerations

1. Welcomes the progress made in the Stabilisation and Association Process and, in particular, the recent signing of the SAAs with Bosnia and Herzegovina and with Serbia; calls on the Member States to conclude the ratification process for all the SAAs as soon as possible; welcomes the progress made in the implementation of the Interim Agreements and calls on the Western Balkan countries to continue their efforts in this field; stresses the importance of further enhancing the multilateral dimension of the Stabilisation and Association Process with a view to fully resuming regional cooperation in all fields;

2. Reiterates ‘the European perspective’ of the countries of the Western Balkans which was clearly formulated during the Thessaloniki European Council; points out, however, that the future accession of the Western Balkan countries to the European Union is strictly conditional on the fulfilment of all the conditions and requirements set by the European Union, including the Copenhagen membership criteria and the successful fulfilment of the Stabilisation and Association Process, which includes regional cooperation, good neighbourly relations and full cooperation with the International Criminal Tribunal for the former Yugoslavia;

3. Stresses that a serious prospect of EU membership for the Western Balkan states can act as a catalyst to encourage their population and governments to move away from regressive nationalism, sectarian violence and towards a future of integration with the rest of Europe; moreover, it will improve the relatively weak image of the Western Balkans within the European Union due to the recent wars and political controversies of the last decades, which will in turn stimulate EU companies to increase their business in the region;

4. Encourages the European Union to continuously demonstrate its engagement with the Western Balkans, especially in this politically delicate period; urges the Council and the Commission to realise that it is not in the advantage of both the European Union and the Western Balkans to create a ‘black hole’ in Kosovo; asks the EU Institutions, therefore, to be actively engaged in order to avoid tensions;

5. Considers that it is essential for the overall approach adopted towards the Western Balkans to take account of differences between the countries of the region as regards their respective levels of economic development and compliance with the EU acquis and World Trade Organisation (WTO) rules; stresses, therefore, the importance of a strictly individual path towards EU membership for each of the Western Balkan countries, based inter alia on their individual fulfilment of the Copenhagen criteria as well as the conditions and requirements set by the European Union;

6. Welcomes the visa facilitation and readmission agreements which entered into force in January 2008 and the dialogue on roadmaps for gradual liberalisation of the visa regime for the countries of the Western Balkans; considers that there is a real need to improve and establish well-functioning customs regimes in order to facilitate trade flows and ensure closer economic, scientific, technological and trade cooperation; welcomes the Commission's decision to offer an increasing number of scholarships for students from the Western Balkans under the Erasmus Mundus programme;

WTO and CEFTA

7. Calls on the Commission and the Council to implement all appropriate measures to encourage deeper integration of the Western Balkans into the world trade and economic system, in particular through WTO accession for the countries in the region which are not yet members; takes note with favour that Albania, Croatia and the Former Yugoslav Republic of Macedonia are already members of the WTO; underlines that the liberalisation of trade must go hand in hand with reducing poverty and unemployment rates, promoting economic and social rights and respecting the environment;

8. Underlines the stimulus of regional cooperation and good neighbourly relations for the economic growth in the area and the essential role that the CEFTA plays in this process; stresses that CEFTA may also play an important role in the further integration of the region into the EU by strengthening economic and trade relations between the EU and the Western Balkans; considers, therefore, that CEFTA contributes significantly to the preparation of the Western Balkan countries’ accession to the European Union;

9. Calls on the Western Balkan governments to further explore the possibility of greater trade liberalisation measures in areas, which have hitherto been exempted, and to establish mechanisms to combat systematically any infringements of international intellectual and industrial property rights; calls also on these governments to align themselves with the community acquis and take action to end any practices and measures amounting to non-tariff trade barriers;

European assistance and Western Balkans’ ownership of the reform process

10. Supports the Western Balkan countries’ efforts for reform and regional cooperation through their IPA; underlines the fact that the countries of the Western Balkans are the only ‘owners’ of their reform process; urges the Western Balkan countries to take responsibility for formulating a sufficient number of ambitious projects in order to be able to use the available European funds without being too passive and dependent on European initiatives;

11. Emphasises the role of the regions in economic and social development and for this reason, the importance of the IPA for assisting the Western Balkan countries in the process of democratisation, of economic and social change and of alignment with European standards and for bringing these countries closer to the structures of the European Union;

12. Calls on the Commission and the Member States to endow the IPA with the additional financial resources needed to develop projects tailored to real needs and to provide effective and focused assistance at local and regional levels; emphasises the importance of people-to-people projects, which can be particularly effective in making local people aware of the added value delivered by the European Union;

13. Welcomes the fact that one of the priorities of the IPA is to contribute to developing institutional and administrative capacities in the Western Balkans, at both the national and the regional level; urges the Commission to reinforce this type of activity in order to stimulate the development of governance and to prepare these countries and regions for the proper take-up of the structural funds and to promote their adaptation to EU standards with a view to their possible future accession; calls on the Commission to guarantee a high level of transparency in connection with the development of institutions and to take suitable measures to prevent corruption;

14. Calls on the Council and the Commission to supply the states in the region with economic and administrative technical assistance by duly qualified persons, in cooperation with the international and regional organisations dealing with Western Balkan economic issues, in order to strengthen local public structures, establish a more efficient and diversified economic base and improve the penetration of local products into foreign markets, and into the European Union in particular;

15. Suggests that Member States offer the Western Balkan countries so-called government-to-government programmes which give these countries specific assistance, training and coaching in their national departments on areas that are explicitly requested by the authorities of the Western Balkan states; underlines that these programmes can play an important role in implementing the EU acquis in the region while they offer the Western Balkan states the possibility to specify the exact forms of assistance they need;

16. Calls on the Commission to duly submit in good time for approval to the Parliament any new proposals aiming to provide exceptional budgetary assistance to the Western Balkan countries; stresses that further financial assistance to the Western Balkans (and notably to Kosovo) should be conditional on the establishment, with the support of international financial institutions, of a comprehensive and realistic long-term economic development plan;

17. Takes the view that the local and regional authorities play a decisive role in bringing about sustainable economic development and in reinforcing civil society by giving specific shape to the national and community priorities through projects creating partnerships with players in the public and private spheres;

18. Stresses the importance of cross-border and international cooperation in developing joint projects and establishing lasting links both among the regions of the Western Balkans and between the latter and regions in the Member States; stresses also that the benefits of such cooperation are not just economic in nature, but also have a political and human dimension, fostering a closer relationship between peoples and between governments and guaranteeing long-term stability and prosperity in the region;

19. Encourages EU regions to take the initiative in implementing cross-border projects with the Western Balkan region in order to establish close and long-term cooperation at regional level, and in promoting exchanges of experience and good practice in the framework of the European regional cooperation networks; takes the view that cooperation in the region can be fostered by strengthening the Regional Cooperation Council;

Economic policies, energy, transport and environment

20. Urges the countries in the region, acting in close co-operation with the Commission and other relevant international financial institutions, to maintain and expand their gains in macroeconomic stability, which is a pre-condition for lasting economic growth, through sound fiscal and monetary policies; further urges the countries to accelerate the pace of structural reforms, especially in the areas of tax policy and customs and administration, by promoting the principles of transparency and accountability and supporting sound management in the public sector;

21. Stresses the need to grant more support to the region’s private sector development and infrastructure investment through, inter alia, intensified cooperation with the European Investment Bank, as well as the European Bank for Reconstruction and Development and other International Financial Institutions;

22. Considers it essential for the economic development of the region to create a favourable investment climate and calls on the Commission and Western Balkan states to work towards intensifying economic reforms by developing strategic development plans to implement investment projects of significance to the region as a whole;

23. Commends the Western Balkans governments on the progress that they have so far made in the economic area, while maintaining macroeconomic stability; welcomes the implementation by governments of tax policies and fiscal discipline policies that have resulted in increased state budget revenues;

24. Stresses the importance of pursuing the development of energy cooperation in the region, especially with the development of renewable energy resources, establishing open, reliable and competitive markets and improving the general conditions for the expansion of the energy infrastructure in the region including the enhanced interconnection capacities between the neighbouring EU Member States and partner countries; emphasises the important role played by the Energy Community towards this goal;

25. Considers that the development of the port of Rijeka in Croatia is an extremely important project for the European Union; believes it to be in the interest of the European Union that this development should proceed as soon as possible;

26. Stresses that environmental protection is an important element of sustainable development in the Western Balkan region; considers it imperative that the Commission and the Western Balkan governments promote sound environmental policies and strategies in line with EU environmental legislation;

27. Considers it important that the Western Balkan states apply the common European maritime policy principles and guidelines, and stresses the need for efficient and environmentally friendly use of the Danube River, in compliance with EU legislation, as an important transport corridor and a source of valuable resources; supports in this respect the regional initiatives underway and organisations (and in particular the International Commission for the Protection of the Danube River – ICPDR) working towards environmental protection, better use of inland waterway transport capacity and a higher level of disaster prevention for the Danube river;

28. Recalls that it is necessary to increase agricultural trade with Croatia too, so that when Croatia accedes it can align itself as smoothly as possible with the common agricultural policy;

29. Acknowledges the specific geography of the region and its strategic situation, which make the area the natural transit point for trade in goods, in particular primary energy products (crude oil and natural gas), between Europe and Asia; welcomes the launch of major sub-regional transport projects such as the ‘South-Eastern axis’ which will facilitate the inclusion in real terms of the Western Balkans countries in the wider energy pipeline network linking the EU with Turkey and the countries of the Caucasus; calls on the Commission and the Western Balkan countries to make sufficient financial resources available for infrastructure modernisation, with particular reference to the logistics sector, and to carry out the necessary reforms to make the sector more competitive and dynamic;

30. Emphasises that in retail trade the administrative obstacles which prevent the emergence of more competitive food traders must be removed, as the ineffectiveness of the food trade hampers the attempts by European producers to reach the market;

31. Stresses the need to give more support to the development of SMEs on the basis of the European Charter for Small Enterprises, which has been endorsed by all Western Balkan countries; calls on the Commission and the Member States to ensure access for SMEs to EU Structural Funds and to provide better financing for SME-related projects; calls on the Commission to set up an institutional framework to enhance cooperation between the Community and the private sector in the countries of the Western Balkans which will ensure the appropriate use of Community funds;

32. Stresses the need to expand the scope of cooperation in the field of education and science between the European Union and the Western Balkan countries which will create the conditions for stable economic development and growth in the region, thus encouraging integration of the Western Balkans into the common economic area, the common area on research and education, as well as their participation in the labour market in accordance with EU rules and requirements;

33. Given that the international financial crisis has reached Europe and may have an indirect effect on trade and foreign investment in the Western Balkans, calls on the Commission to monitor developments and, if necessary, to adopt adequate measures in order to guarantee the smooth continuation of the Stabilisation and Association Process, which is an important factor for stability in the region and in the best interests of the EU itself;

Financial services, customs, fight against organised crime and corruption

34. Considers it essential for the economic development of the countries in the region that they substantially reform their banking and insurance systems, establish an efficient micro-credit system and improve the regulation and supervision of banking activities, thus laying the ground for a gradual opening of their financial markets;

35. Calls for the states in the region which suffer from corruption in the civil service to take all appropriate measures to combat it and to ensure that their customs services operate in a better, more transparent way, in line with the standards laid down by the EU and the World Customs Organisation;

36. Stresses the need to increase customs checks and make them more stringent, in order to combat smuggling, counterfeiting and piracy of goods, such practices, apart from the loss of revenue they entail, present considerable dangers to the health of the inhabitants of both the EU and the Western Balkan countries;

37. Welcomes the improved business climate and the measures for reducing the legal and administrative barriers to business start-ups; expresses its concern, however, over the existence of cartels and the abuse of market power by so-called ‘tycoons’ in some of the Western Balkan countries and by undertakings in a dominant market position; urges the governments of the Western Balkan countries to intensify their fight against corruption and to develop an adequate competition policy which must also encompass state undertakings;

38. Invites Western Balkan countries to develop employment and fiscal policies so as to address problems of unemployment, relatively high wages and the large size of the informal economy;

39. Stresses that fair and transparent regional cross-border competition for public procurement is an important building block of a truly integrated regional market; calls on the Western Balkan countries to assess the potential of public procurement for the stabilisation of sustainable economic development and to multiply their efforts towards a more integrated and better functioning regional public contract system applying the principle of non- discrimination between domestic and regional suppliers;

o o

40. Instructs its President to forward this resolution to the Council and Commission and to the parliaments and governments of the Member States and of the countries concerned.

[1] OJ L 312, 29.11.2005, p. 1.
[2] OJ L 210, 31.7.2006, p. 82.
[3] OJ C 27 E, 31.1.2008, p. 207.
[4] OJ C 308 E, 16.12.2006, p. 141.
[5] Texts adopted, P6_TA(2008)0172.
[6] Texts adopted, P6_TA(2008)0120.
[7] OJ C 301 E, 13.12.2007, p. 224.
[8] OJ C 263 E, 16.10.2008, p. 626.
[9] OJ C 305 E, 14.12.2006, p.141.
[10] Texts adopted, P6_TA(2007)0617.
[11] OJ C 291 E, 30.11.2006, p. 402.
[12] OJ C 317 E, 23.12.2006, p. 480.

Introduction

Before the wars of the 1990s, Yugoslavia was viewed by many as a possible candidate for accession to the European Community. Now, ten years after the Yugoslavian wars, the European frame of reference has undergone fundamental change. Only Slovenia, the richest and most highly developed republic, was able to take advantage of enlargement to become an EU Member States in 2004 and a member of the eurozone in 2007. For the other former Yugoslav republics, the wars not only brought about great losses of human life, but also a serious recession in terms of the economy and infrastructure, which was linked to both war activities and a serious lack of infrastructure investment and maintenance.

The situation in Albania is comparable from an economic point of view, given that the underdeveloped state of the country combined with the disastrous economic choices of the communist government have led to situation where, at the end of the Enver Hoxha regime, Albania was left as a country in need of total reconstruction.

The EU played a pioneering role in the process of political and economic recovery in the countries of the former Yugoslavia. In the Greek city of Thessaloniki in 2003, the Council clearly formulated the European vision of the countries of the Western Balkans. Croatia and FYROM are official candidates for EU accession, and the status of the other countries of the Western Balkans as potential candidates for accession is recognised.

The EU has assumed an enormous responsibility vis-à-vis the Western Balkans and as such the task that awaits it is already a difficult one. And it is further complicated by the fact that the region is not yet fully in balance. There are still focuses of tension and latent conflict which could, if no proper solution is found, damage the peace process in the Balkan countries and damage, delay or even put paid for the time being to their chances of accession to the European Union.

This report seeks to give an overview of economic and trade relations with the countries of the Western Balkans and to see how, using the economic and financial instruments that the EU has at its disposal, the stabilisation of the region, improved development for its countries and a higher standard of living for their populations can be promoted, with an eye to their accession to the EU.

The task of the EU

The EU has an essential role to fulfil in the recovery of the Western Balkans. The process of stabilisation and association continues to be the political background against which relations between the EU and the Western Balkans take place. In this context, the stabilisation and association agreements, trade preferences and technical and financial support continue to be the three pillars on the basis of which the EU hopes to stabilise the region and to bind the Balkan countries more closely into its own legal and economic system.

The level of development and the extent to which the acquis communautaire has been adopted is not equal in all the countries of the region, so that, rather than one single strategy, specific, ‘tailor-made’ approaches are called for.

Finally, it should be noted that the progress of accession negotiations (or the opening thereof in the case of the potential candidate countries) with the countries of the Western Balkans must be dependent upon total compliance with the Copenhagen criteria and unconditional respect for the principles of democracy and human rights.

Membership of the WTO

An essential precondition for the development of the Western Balkan countries is their membership of the WTO. Croatia, Albania and FYROM are already WTO members, while Bosnia-Herzegovina, Serbia and Montenegro have achieved observer status and have started membership negotiations.

WTO membership is necessary in order to integrate these countries in the world trade system and to put them in a position where they can take advantage of the opportunities that globalisation offers in terms of economic development and direct foreign investment.

Your rapporteur takes the view that the Commission must continue to support the efforts of these countries in negotiations with the WTO and to offer them appropriate technical aid and diplomatic support.

The Central European Free Trade Agreement (CEFTA)

The CEFTA, to which all the Western Balkan countries are parties, has undergone a regeneration and forms an important milestone on the path towards the creation of a regional internal market.

Although the EU has become the main trading partner of all the countries of the Western Balkans, extensive regional cooperation continues to be an essential priority in economic and commercial terms, from both the economic and the political points of view.

In this connection, your rapporteur, who welcomes the EU’s external support for the establishment of the CEFTA, considers it desirable for the Commission to press for the creation of a genuine regional economic community that functions well and falls as far as possible within Community law.

The stabilisation and association agreements

The stabilisation and association agreements are, as already pointed out, the cornerstones of our relations with the countries of the Western Balkans. The most recent stabilisation and association agreements were signed in 2007 with Montenegro and in early 2008 with Serbia and Bosnia-Herzegovina. Not all the stabilisation and association agreements have come into force, but the Commission has used interim agreements to ensure the accelerated entry into force of the trade provisions of the abovementioned agreements.

These stabilisation and association agreements form an essential component in the trajectory of the countries of the Western Balkans towards the European Union. Your rapporteur stresses, however, that not all of these may end in an unconditional ‘leap forward’ that is based on the aforementioned Copenhagen criteria.

The new strategic role of the Western Balkans

For too long the Balkans have been a distant outpost of Europe, which has led to a serious development gap and to the introduction of a system of logistics, energy and transport that fails to meet the needs of the region and is damaging to the economic development of the whole region, and maybe even of the whole European Union.

In this connection your rapporteur takes the view, while acknowledging that considerable progress has been made in modernising the region’s infrastructure, that even more emphasis must be laid on complete integration of the Western Balkans into the EU’s economic order, accompanied by total compliance with European competition rules.

Development of the regional transport system in the Western Balkans would not only provide better conditions for regional economic development, but also make it possible to link the whole of south-east Europe and Turkey more effectively and cheaply to the markets of central and western Europe.

The development of the Balkan region cannot, however, be seen as certain if, alongside the major transport connections such as motorways, railways, ports and airports, a system of effective, well-maintained secondary road connections is not developed.

Energy is an important issue for the countries of the Western Balkans. None of the countries, after all, has large energy reserves, making them dependent on third countries for energy supply. The best solution is for the Western Balkans’ energy issues to be placed in the context of a developing European energy policy. This means that the countries of the Western Balkans do not import their oil and gas solely from Russia, but that they also play a role in the European aim of achieving greater diversity of suppliers by importing energy from the Caucasus and Central Asia.

Economic and government reform in the countries of the Western Balkans

One of the scourges that continue to cause a great deal of damage in the Balkans is the relatively weak position of governments. Although national governments and the EU are making great efforts, a great deal must still be done to put in place efficient, modern systems of government. In this connection your rapporteur suggests the establishment of ‘government-to-government’ programmes by the EU Member States, so that the Western Balkan countries receive support and assistance that are tailored to their needs at departmental level.

First and foremost, the tax system needs to be reformed, the customs departments of the individual Western Balkan countries strengthened, and corruption and organised crime in general effectively combated. Your rapporteur is convinced that economic growth in the Balkan countries and their formation of closer links to the EU will otherwise be significantly delayed by these handicaps. It is also desirable for the banking and insurance systems to be overhauled, thus ensuring better management of the economy, easier access to credit for local businesses and effective combating of money laundering.

Industry, agriculture and services policy

The economic growth of the countries of the Western Balkans is currently still fairly strong and offers hope for the future. At macro-economic level, however, there are still many problems that require answers. The serious trade deficit (for example with the EU), inadequate, obsolescent industry, the inordinate fragmentation of the economy, in which SMEs and, often, micro-businesses predominate, and an unemployment rate that in some cases lies at around 50% of the workforce are all factors that can undermine the economic growth of the region’s countries and hence their development towards accession to the EU.

Your rapporteur takes the view, however, that these objectives can be achieved with full respect for the environment and the Community and international social legislation that protects labour, with at the same time equal access to the employment market and higher education being guaranteed for all ethnic minorities.

Some concluding remarks

The political integration of the Western Balkans into the EU can only take place as a result of better, more intensive regional and international economic cooperation. Accession by the Western Balkans will happen all the more quickly if their component countries can demonstrate that have an efficient system of government and a sound, dynamic economy. In this process the Union must show genuine commitment to the Western Balkans. Part of the economic problems in the area is, after all, related to the region’s bad image. This image will be significantly improved if the Union indicates its genuine intention of fulfilling its pledge to enable these countries to accede to the EU on schedule.

The EU has set aside almost EUR 8 billion in support for the 2007-2010 period, but without appropriate cooperation and without creating a sense that everyone is working together towards a common goal, the hoped-for results will not be achieved. It is therefore desirable that the countries of the Western Balkans should feel responsible for their own reform process. This responsibility must translate into the formulation of sufficiently good projects to allow the available EU funds to be used to optimum effect. The EU and the other regional actors must in their turn make efforts to find a definitive solution to the disputes with which the region is still faced, in which process equal treatment and equal development chances must be guaranteed for all the population groups in the Western Balkans.

for the Committee on International Trade

on trade and economic relations with the Western Balkans
(2008/2149(INI))

Rapporteur: Kristian Vigenin

SUGGESTIONS

The Committee on Foreign Affairs calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Welcomes the progress made in the Stabilisation and Association Process and, in particular, the recent signing of the Stabilisation and Association Agreements with Bosnia and Herzegovina and with Serbia; calls on the Member States to conclude the ratification process for all the SAAs as soon as possible; welcomes the progress made in the implementation of the Interim Agreements and calls on the Western Balkan countries to continue their efforts in this field; stresses the importance of further enhancing the multilateral dimension of the Stabilisation and Association Process with a view to fully resuming regional cooperation in all fields;

2. Recalls the Presidency Conclusions of the Thessaloniki European Council of 19-20 June 2003, at which a promise was given to all Western Balkan states that they would join the European Union, as well as the Salzburg EU/Western Balkans Declaration of 11 March 2006, which reaffirmed the importance of good neighbourly relations and the need to preserve peace and enhance stability and security in the Western Balkans;

3. Stresses the importance of easy access for the citizens of Western Balkan countries to the European Union, which should be facilitated by an appropriate visa regime; welcomes, in this context, the visa facilitation and readmission agreements which entered into force on 1 January 2008;emphasises, however, that citizens of those countries continue to face problems in obtaining visas for EU countries; calls on the Commission to make every effort to proceed with dialogue with the countries of the region and the implementation of the road maps with the objective of establishing a visa-free regime as soon as those countries fulfil the necessary criteria;

4. Points out the need for greater regional integration and enhanced intra-regional cooperation, especially in the areas of human capital, telecommunications and power; encourages Western Balkan states to intensify their trade and economic relations with a view to establishing a regional labour market; stresses the vital role that regional organisations, and in particular the Regional Cooperation Council, and regional cooperation initiatives, in particular the Central European Free Trade Agreement (CEFTA), can play in facilitating economic and trade cooperation in the region; calls on the Commission to continue to support their activities; underlines the need to enhance bilateral and regional cooperation in the region in order to ensure self-sustaining progress; takes the view that the development and strengthening of the regional markets can help to prepare the Western Balkans countries better by counterbalancing the effects of the opening of their markets to the European one;

5. Stresses the existing infrastructure and road safety deficits and the pressing need to upgrade trade routes in the region;

6. Calls on the Commission to provide further institutional support to Western Balkan countries, particularly with regard to quality certification and export facilitation, whilst calling on the Western Balkan states once again to improve their institutional capabilities;

7. Calls on all authorities within the region to continue to make the necessary efforts to create a business-friendly environment which increases transparency in business administration and tax law while respecting all rules aimed at promoting sustainable development, and to attach particular importance to encouraging private-sector development, strengthening small and medium-sized undertakings and increasing innovative capacity by establishing links between business and tertiary education; emphasises in that respect the need to step up the fight against corruption at all levels and to improve the rule of law;

8. Is worried about the skills gap and poor social cohesion in the Western Balkan region; highlights the fact that stability and sustainable economic growth must be achieved by addressing both economic and social reforms as well as establishing high standards for environmental protection;

9. Points out the importance of the environmental dimension in the economic life of the Western Balkan countries; stresses that the declarations of environmental intent need to be backed up by practical measures and effective structures; urges the Western Balkan governments to develop renewable energy sources, improve waste management policy implementation and further build up environmentally sustainable tourism in order to preserve this exceptionally beautiful natural and architectural heritage;

10. Notes that the region has seen an increase in investment from international players, particularly in the fields of energy, tourism and natural resources; stresses the beneficial influence of foreign investment, and particularly foreign direct investment, on the economies of countries in that region; underlines, however, that such investment should be fully transparent, with the same rules for all investors, and that it should not be linked to any political pressure from the governments of the investing entities;

11. Given that the international financial crisis has reached Europe and may have an indirect effect on trade and foreign investment in the Western Balkans, calls on the Commission to monitor developments and, if necessary, to adopt adequate measures in order to guarantee the smooth continuation of the Stabilisation and Association Process, which is an important factor for stability in the region and in the best interests of the EU itself;

12. Welcomes the inclusion of the Western Balkan countries in the Erasmus Mundus and Tempus programmes; calls on those countries to establish the national agencies necessary in order to take part in the Lifelong Learning Programmes (LLL), namely Comenius, Erasmus and Leonardo da Vinci; calls on the Commission to use the IPA funds to waive the full fee paid by the Western Balkan states to participate in the LLL Programmes, as is already the case with Erasmus Mundus and Tempus; calls for increased cooperation and improved possibilities for cross-border exchanges for students, teachers and researchers from the Western Balkan states and the EU in order to familiarise the people and institutions of the Western Balkan states with the EU agenda and to strengthen educational skills; points out, however, the massive rate of brain drain among young people in Western Balkans and stresses the need to encourage return migration;

13. Invites Western Balkan countries to develop employment and fiscal policies so as to address problems of unemployment, relatively high wages and the large size of the informal economy;

14. Points out that there are significant differences in the EU’s economic and trade relations with the individual countries of the Western Balkans; calls, therefore, in the light of the experience gained with the enlargement process thus far, for the requisite conclusions to be drawn and for the various components of the IPA instrument to be made more flexible, to be tailored more closely to actual needs and to focus more specifically on the sustainable development of the regions concerned.

RESULT OF FINAL VOTE IN COMMITTEE

for the Committee on International Trade

on trade and economic relations with the Western Balkans
(2008/2149(INI))

Rapporteur: Ramona Nicole Mănescu

SUGGESTIONS

The Committee on Regional Development calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Emphasises the role of the regions in economic and social development and for this reason, the importance of the Instrument for Pre-accession Assistance (IPA) for assisting the Western Balkan countries in the process of democratisation, of economic and social change and of alignment with European standards and for bringing these countries closer to the structures of the European Union;

2 Points out that there are significant differences in the EU’s economic and trade relations with the individual countries of the Western Balkans; calls, therefore, in the light of the experience gained with the enlargement process thus far, for the requisite conclusions to be drawn and for the various components of the IPA to be made more flexible, to be tailored more closely to actual needs and to focus more specifically on the sustainable development of the regions concerned;

3. Calls for support to be given, as a matter of priority, to national development plans which take account of the economic development of both urban centres and rural areas; in that connection, emphasises the particular importance of providing support for corresponding training, further training and in-service training programmes;

4. Calls on the Commission and the Member States to endow the IPA with the additional financial resources needed to develop projects tailored to real needs and to provide effective and focused assistance at local and regional levels; emphasises the importance of people-to-people projects, which can be particularly effective in making local people aware of the added value delivered by the European Union;

5. Takes the view that the local and regional authorities play a decisive role in bringing about sustainable economic development and in reinforcing civil society by giving specific shape to the national and community priorities through projects creating partnerships with players in the public and private spheres;

6. Welcomes the fact that one of the priorities of the IPA is to contribute to developing institutional and administrative capacities in the Western Balkans, at both the national and the regional level; urges the Commission to reinforce this type of activity in order to stimulate the development of governance and to prepare these countries and regions for the proper take-up of the structural funds and to promote their adaptation to European standards with a view to their possible future accession; calls on the Commission to guarantee a high level of transparency in connection with the development of institutions and to take suitable measures to prevent corruption;

7. Stresses the importance of cross-border and international cooperation for developing joint projects and establishing lasting links both among the regions of the Western Balkans and between the latter and regions in the EU Member States; stresses also that the benefits of such cooperation are not just economic in nature, but also have a political and human dimension, fostering a closer relationship between peoples and between governments and guaranteeing long-term stability and prosperity in the region;

8. Encourages EU regions to take the initiative in implementing cross-border projects with the Western Balkan region in order to establish close and long-term cooperation at regional level, and in promoting exchanges of experience and good practice in the framework of the European regional cooperation networks; takes the view that cooperation in the region can be fostered by strengthening the Regional Cooperation Council (RCC);

9. Stresses the need to take account of the development of economic and trade cooperation in the specific area of the Danube with a view to contributing to the exploitation of the potential of this area, the point at which the European Union and the Western Balkans region meet.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

Result of final vote

+:

–:

0:

Members present for the final vote

Vittorio Agnoletto, Roberta Alma Anastase, André Brie, Philip Claeys, Véronique De Keyser, Giorgos Dimitrakopoulos, Michael Gahler, Georgios Georgiou, Jana Hybášková, Jelko Kacin, Metin Kazak, Maria Eleni Koppa, Joost Lagendijk, Vytautas Landsbergis, Johannes Lebech, Francisco José Millán Mon, Philippe Morillon, Pasqualina Napoletano, Annemie Neyts-Uyttebroeck, Baroness Nicholson of Winterbourne, Janusz Onyszkiewicz, Ria Oomen-Ruijten, Ioan Mircea Paşcu, João de Deus Pinheiro, Hubert Pirker, Samuli Pohjamo, Bernd Posselt, Libor Rouček, Christian Rovsing, Flaviu Călin Rus, Jacek Saryusz-Wolski, Inese Vaidere, Geoffrey Van Orden, Marcello Vernola, Kristian Vigenin, Andrzej Wielowieyski, Jan Marinus Wiersma, Zbigniew Zaleski, Josef Zieleniec

Substitute(s) present for the final vote

Árpád Duka-Zólyomi, Kinga Gál, Milan Horáček, Marie Anne Isler Béguin, Tunne Kelam, Miloš Koterec, Nickolay Mladenov, Inger Segelström, Jean Spautz

Substitute(s) under Rule 178(2) present for the final vote

Wolfgang Bulfon, Rosa Miguélez Ramos

Legal notice - Privacy policy