European Commission proposes Stability and Association Agreements - Multilateral political dialogue -

26/05/1999 (Agence Europe) - Drawing conclusions concerning the impact that the Kosovo crisis will have on the stability of South East Europe and Europe as a whole, the European Commission will adopt, on Wednesday, with regard to the future development of relations between the EU and the countries of the region, a communication whose main aim is to send a clear political message to these countries, to let them know that they have a future and real prospects in Europe. In order to implement this commitment, the Commission proposes a strengthened regional approach for the countries of South East Europe, in the context of stabilisation of the region. The drafting of this communication was the result of lengthy preparatory work carried out under the authority of European Commissioner Hans van den Broek, work which has confirmed the validity of the Regional Approach, followed since 1996 by the EU in its relations with these countries, while stressing the need for increased flexibility in application of this appro

ach and new instruments. Such an instrument would be the conclusion of so-called "Stability and Association" Agreements, given that this new regional instrument for contractual relations with the region would be differentiated in order to take into account not only the specific situation of each country but also the existing acquis with each of them (cooperation agreements with Tirana and Skopje and the Transport Agreement with Skopje, autonomous trade preferences for the countries which emerged from former Yugoslavia; see below). In concrete terms, while the prospect of concluding new agreement would be open to all countries concerned, the Commission should:

(1) in coming days, report to the Council (a General Affairs Council is scheduled for 31 May) on: - the opening of negotiations for Stability and Association Agreements with the Former Yugoslav Republic of Macedonia, in conformity with theConclusions of the General Affairs Council of 26 April and the declaration adopted after "political dialogue" between the EU Troika and the FYROM prime minister and foreign minister, Mr Georgievski and Mr Dimitrov (see EUROPE of 29 April, pages 4 and 5); - the feasibility of the opening of such negotiations with Albania in the light, above all, of "political dialogue" between the Troika and Albanian Foreign Minister Mr Milo (see the same edition of EUROPE);

(2) recall that negotiations with a view to agreements with the EU may begin with Bosnia-Herzegovina, Croatia and the Federal Republic of Yugoslavia only when required conditions are met. But the Commission could begin to prepare technical reports on the feasibility of opening negotiations with Bosnia and Croatia;

(3) indicate that all this, at a later stage, will become part of the EU's future strategy that will underline that all countries will have the chance of increased rapprochement in the perspective of full integration in the European structures..

During its preparatory work, the Commission felt that relations with the Balkan countries should be developed at several levels:

1) Democratisation, Civil Society and institution-building. The primary objective will be to: - contribute to the stability of political structures of the countries concerned, which mainly means supporting free and fair elections and voter education, the development of parliamentary practice, legislative reform and independent media; - safeguard the rule of law with support to justice and the police, and also long term initiatives for civic education in schools and the affirmation of multicultural values; - ensure the effectiveness of public administration, mainly through anti-corruption programmes and training programmes; - ensure the viability of the Civil Society, mainly by establishing a regional network of foundations for democracy (which could be implemented quite rapidly, on the basis of draft proposals which already exist for Bosnia-Herzegovina, Kosovo, Albania and FYROM).

2) Trade. In the near future, the Commission will be presenting a formal proposal for the upgrading of the bilateral trade regime with Albania towards a preferential regime, and, also in the future, it plans to propose separate trade preferences for Bosnia and Herzegovina and Croatia.

3) Economic and financial assistance Financial assistance under the Regional Approach, taking all possible Community budget lines into account, exceeds EUR 700 million for the current year, but the Commission considers this clearly insufficient. In addition, it will make proposals aimed at allowing the flexible and non-bureaucratic use of EU aid instruments, and encouraging financing by the private sector. In particular, in its preparatory work, the Commission: - insisted on programmes for several countries at the same time(a certain percentage of aid, except humanitarian aid, including EIB loans, could be devoted to multinational or cross border cooperation - between States of the region, with the neighbouring states and with EU states); - considered that bilateral assistance could also comprise debt relief or cancellation for the countries of the region that have been particularly hard-hit by the Kosovo crisis.

4) Political dialogue. Apart from bilateral political dialogue, it will be a matter of developing dialogue at multilateral and regional level (excluding Belgrade for now). Such dialogue could: - take place at the level of senior officials or ministers; - comprise the adoption of political declarations; - result in the creation of mechanisms for technical discussions (as in the case of the Consultative Task Force for Bosnia).

5) Justice and home affairs. These issues should become an essential element of cooperation between the EU and the countries of the region, cooperation which should mainly cover: - the promotion of an independent judiciary and legal and law-enforcement system with effective policing (WEU could play a role on the basis of its experience in Albania); - the fight against organised crime, corruption, fraud and smuggling; - the participation of all countries in the programme to fight against drug trafficking for south East Europe; - strengthened border controls; - campaigns for the prevention of migratory flows into the EU (including through bilateral agreements on the re-entry of nationals).

The situation of each country concerned

6) The prospects for the different countries concerned should therefore be as follows:

7) Bosnia-Herzegovina should continue to benefit from autonomous trade preferences extended by the EU and Phare assistance related to the reconstruction and the building of institutions (while it will not fully benefit from "traditional" Phare resources until conditions are met). When required conditions are met, Bosnia-Herzegoovina will be eligible for opening negotiations with a view to a new agreement. 8) Croatia should also continue to benefit from autonomous trade preferences, although progress so far has not been sufficient to warrant the suspension of such assistance under Phare. But the EU has already provided assistance (mainly humanitarian and democratisation aid) and will continue to contribute above all for the economic regeneration of refugee return areas. Terms are the same for Bosnia regarding the conclusion of an agreement with the EU.

9) The FRY will be eligible for all instruments foreseen as soon as it has fulfilled the conditions, but, in the meantime, sanctions against Serbia will continue to be applied and it is not appropriate to discuss the country's eligibility for autonomous trade preferences and Phare assistance. The EU will continue to help Montenegro through other instruments. 10) Former Yugoslav Republic of Macedonia will continue to benefit from EU aid, including under Phare, and refugee returnaid will be extended once information required is available. In addition, its cooperation agreement and its transport agreement with the EU will continue to be implemented while, if the Council so decides, the Commission may make recommendations for the negotiation of a new type of agreement. 11) Albania will also continue to benefit from EU assistance, including under Phare. In addition, Albania benefits from budgetary assistance for the hosting of refugees, and the activity of the Customs Assistance Mission will be developed. Coopera

tion will be developed on the basis of the Agreement on Trade and Commercial and Economic Cooperation, and the Commission is willing to report, when the time comes, on the feasibility of opening negotiations with a view to an agreement of a new kind.