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ENP Package – Belarus

European Commission - MEMO/14/222   27/03/2014

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European Commission

MEMO

Brussels, 27 March 2014

ENP Package – Belarus

The EU remains committed to a policy of critical engagement towards Belarus. This includes cooperation through the multilateral track of the Eastern Partnership and technical dialogues on specific topics of common interest, as well as support to civil society and to the Belarusian population at large. At the same time, against the background of the EU’s serious concerns about the lack of progress as regards the human rights situation in Belarus, the Council approved the prolongation (for one year) of the restrictive measures against those responsible for serious violations of human rights, the repression of civil society and democratic opposition, or whose activities otherwise seriously undermine democracy or the rule of law in Belarus, and those who are benefiting from or supporting the regime. The European Dialogue for Modernisation with Belarusian society provides a forum for the free exchange of ideas for a modern Belarus. This Dialogue is now further supported by a new two-year project.

Political situation and latest developments in EU relationship with Belarus

Throughout 2013, the EU consistently reiterated its commitment to the policy of critical engagement with Belarus, including through dialogue and participation in the Eastern Partnership (EaP). The EU recalled that the development of bilateral relations under the Eastern Partnership was conditional on progress towards respect by Belarus for the principles of democracy, the rule of law and human rights. The EU reiterated its willingness to assist Belarus to meet its obligations in this regard.

The general repressive policies continued in 2013 by the intimidation of representatives from civil society, petty harassment, dismissing people from their jobs (e.g. active members of independent trade unions), not allowing certain citizens to travel abroad, fining activists or sentencing them from short to medium periods in jail (for some of these activists, several times during the year).

Throughout 2013, the EU at numerous occasions expressed its grave concern regarding the lack of respect for human rights, the rule of law and democratic principles. The EU Delegation and EU member states have continuously in contacts with interlocutors in the Belarusian administration raised the importance of immediately releasing and rehabilitating political prisoners, as well as EU concerns regarding cases of harassment of human rights defenders, civil society and opposition activists, or further restrictive legislation.

Political prisoners are still being held in Belarusian prisons. Four political prisoners were released from prison in 2013 after having served their full terms (Parfenkow, Sevyarinets, Dashkevich and Frantskevich).

Some new politically motivated cases (Haydukow, Lazar, Yeromenko, Pastnau, Parfenkow) have been recorded in 2013; the EU delegation and EU Heads of Missions follow the situation closely.

In May-June, the Spokesperson of the HR/VP made specific statements regretting the issuing of three new death sentences in Belarus. In October, the Head of the EU Delegation in Belarus carried out a demarche with the Ministry for Foreign Affairs on the death penalty. Belarus remains the only country in Europe that still applies capital punishment. Out of the three death penalties that were pronounced in 2013, two have been upheld by the Supreme Court. For the first time since 2003, a death sentence has been annulled by the Supreme Court and the case was sent back for a new trial. In agreement with the EU Heads of Mission in Minsk, the EU Delegation issued a statement welcoming this decision. However, the conclusion of the new trial was to maintain the death sentence.

The spokespersons of HR/VP Ashton and Commissioner Füle made a supportive statement in June related to the adoption by the UN Human Rights Council of a resolution (23/15) on the Situation of human rights in Belarus. The statement welcomed the extension of the mandate of the UN Special Rapporteur on Belarus Haraszti for another year and urged the Belarusian authorities to fully cooperate with him. Nonetheless, the Belarusian authorities still do not recognise Haraszti's mandate and refused his entry to Belarus.

In November, the EU Delegation communicated on EU's Human Rights strategy on its website, and stressed the particular importance for the overall human rights situation in this country, including the situation of the civil society, democratisation, elections, freedom of the media, freedom of expression, freedom of association and assembly, as well as the continued existence of the death penalty and political prisoners, and the use of torture. The protection of LGBT rights is amongst the mentioned areas too; freedom of belief and religion figure also amongst EU actions.

In September, the European Parliament approved recommendations on the EU's Policy towards Belarus. The text of the recommendation was based on a report on Belarus drafted by an MEP Paleckis, following his visit to Minsk in May.

Following the annual review, in October, the Council extended the EU restrictive measures against Belarus (until 31 October 2014). The annual review updated the list of those targeted with a travel ban and asset freeze within the EU. 232 persons and 25 entities remain subject to EU sanctions, as not all political prisoners have been released, no released prisoner has been rehabilitated, and the respect for human rights, the rule of law and democratic principles has not improved.

Local elections took place on 23 March 2014. In November 2013, the regime has taken further steps (namely amendments to the electoral code in the atmosphere of secrecy) to restrict the democratic space and limiting the chances of the political opposition, thus strengthening the atmosphere of control and pressure against alternative political thoughts. During the latest OSCE/ODIHR visit to Minsk in October it was stated that practically none of their recommendations following the previous parliamentary elections in 2012 were followed.

In June 2011, the Commission offered Belarus to start negotiations on visa facilitation and readmission agreements to the benefit of the population at large. In November, at the Eastern Partnership Summit in Vilnius, Foreign Minister Makey has indicated that Belarus now agreed to enter into negotiations on visa facilitation and readmission agreements, which has been welcomed by the EU; the negotiations were launched in January 2014. In the meantime, EU member states unilaterally continued to make optimal use of the existing flexibilities offered by the Visa Code, in particular the possibilities to waive and reduce visa fees for certain categories of Belarusian citizens or in individual cases.

There has been a positive trend in Belarus’ cooperation with the international community on some specific issues, namely the death penalty and the higher education. Two seminars were organised in Minsk on these issues in the first half of 2013. They gathered Government officials, international actors (EU, member states, Council of Europe) and civil society. They allowed frank and deep exchange of views and widened slightly the enabling space for interested actors. Belarus is also seeking accession to several CoE conventions.

EU Cooperation

EU assistance to Belarus remained limited in scope and focused directly and indirectly on supporting the needs of the population and democratisation.

Given the complex political situation of the country, the bilateral allocations funded under the European Neighbourhood and Partnership Instrument (ENPI) aimed at supporting cooperation in sectors of mutual interest and those benefitting most directly the citizens (border management, regional development, environment, energy efficiency, green economy, food safety, etc.), putting emphasis on civil society participation and at the same time maintaining technical level contacts with the Belarusian administration, in particular at local level.

These bilateral projects have an impact on citizens at large who benefit from improvements in key sectors such as environment, energy efficiency, food security, etc. For example, under the Energy Efficiency Programme (€ 5million) the EU is funding small pilot projects in schools to renovate the heating, lighting and ventilation systems. This improves the quality of life for children and leads to considerable budget savings. Another example is the EU Environment programme (€ 5 million) which is addressing bio-diversity (including eco-tourism), water management and waste management issues. It works directly with local authorities and utility companies, providing public services benefitting the people. These programmes have a wide outreach across the country and very strong reliance on regional and municipal activities, which helps to bring the EU message to the regions.

The total envelopes allocated for Belarus for bilateral cooperation amount to 28.5 MEUR for the period 2012-2013. Belarus also participates in some regional projects, mainly in the area of Environment, Education and Cross Border Cooperation.

Bilateral assistance to Belarus is complemented by thematic and regional programmes in the following fields - also in support of the needs of the population: education (Tempus, Erasmus Mundus), the eradication of landmines, waste governance, air quality, nuclear safety - Chernobyl, and TAIEX. Furthermore, special additional financial measures were allocated for support to civil society.

Sectoral dialogues on economic, energy, environment and customs issues are at different stages of advancement.

The EU remains committed to a policy of critical engagement towards Belarus. This includes political support to the civil society and the opposition, human rights organisations, as well as to political prisoners and their relatives. In the same vein, despite huge difficulties, the EU has been engaged in communicating more extensively on its assistance programmes and projects. EU public diplomacy is also developing, with EU and its Delegations in Minsk increased appearances in media, participation in conferences, lectures, projects, such as EU film festival, human rights film festival, where the focus is put on EU values and critical engagement.

The multilateral track of the Eastern Partnership has been extensively used to engage Belarus in closer cooperation with the EU. Belarus actively participated in EaP ministerial and informal meetings as well as in four thematic platforms together with the other five Eastern Partnership countries, which allowed the exchange of information, best practices and lessons learned between the 6 countries as well as with the EU Member States.

Belarus has been actively engaged in several regional activities under the platforms, including Integrated Border Management (IBM). The country's border services are currently developing an Integrated Border Management Strategy with the support of an EU assistance project, which takes into account the EU standards. The Belarusian State Border Committee and State Customs Committee also participate regularly in the bi-annual IBM Flagship Initiative Panel Meetings, chaired by EEAS.

In addition, Belarus participated in most meetings and activities in the framework of the EaP (Foreign ministers meeting in Brussels in July 2013, the first Justice and Home Affairs Ministerial meeting in Luxembourg in October 2013, Transport Ministerial meeting in Luxembourg in October, Ministerial Conference on Culture in Tbilisi in June, Informal EaP dialogue on education in Tbilisi in February and in Yerevan in September).

The Belarusian Minister of Foreign Affairs participated in the EP Summit in Vilnius on 28-29 November and the Minister of Economy participated in the Business forum organised as a side event of the Summit.

Civil Society: role and EU support

Since 2011, the EU has strengthened its engagement with civil society and the public at large.

The Belarus Eastern Partnership (EaP) Civil Society Forum (CSF) National Platform (NP) was established in November 2009. More than 60 Civil Society Organizations (CSO) are currently part of the Belarus NP, which is also present at the Dialogue for Modernisation.

In December 2012, the European Commission launched a project directed towards EaP CSF national platforms. The overall objective of the project is to strengthen and promote the civil society organisations' role in reforms and democratic changes taking place in the EaP partner countries, through increased participation and monitoring in the fulfilment of EaP objectives.

The support to Civil Society has increased significantly since the start of 2011, reaching the total of 19 MEUR in for 2011-2013 (out of which 7.9 MEUR in 2013). This includes, inter alia, projects aiming at guaranteeing freedom of thought, conscience and religion in Belarus, improving women and child protection and rights, supporting initiatives of various civic groups, increasing capacity of civil society organisations and human rights defenders, social inclusion and empowerment of disadvantaged people, integrating former prisoners in the society. Additional funds have been provided via scholarships, languages courses and support to the European Humanities University.

In addition to financial support, the European Commission has put in place the 'Clearing House Initiative', implemented by the NGO 'Office for Democratic Belarus', for networking, interaction and dissemination of best practices with the civil society. The project has facilitated four networking meetings of projects implementers in Brussels. It has also carried out extensive regional training sessions in Belarus on how to apply for EU grants, as well as individual coaching for small NGOs with limited capacity.

The EU has throughout 2013 strengthened its substantial dialogue with the civil society. The European Dialogue on Modernisation (DoM) with Belarusian society, launched by Commissioner Füle in 2012, continued its activities in 2013. The DoM consists of an exchange of views and ideas between representatives of the Belarusian civil society, as well as the EU and its member states. Discussions revolve around possible reforms for the modernisation of Belarus, such as for example in the justice and the economic sectors, and on the related potential development of relations with the EU, as well as possible EU support in this regard. The agenda is set by the representatives of Belarusian society, in consideration of the needs of the Belarusian citizens.

Within the framework of the European Dialogue on Modernisation, the Belarusian participants' have expressed a clear wish that Belarusian authorities would engage in the discussions and events of the Dialogue thus making a valuable and constructive contribution to the normalisation of EU-Belarus relations, as well as charting a course of reform and modernisation for the benefit of the Belarusian people. The EU shares this view. This is why consultations between the EEAS and the Belarusian Ministry of Foreign Affairs took place in 2013 in order to launch an 'interim phase' during which possibilities of improved dialogue could be sought. In parallel, the EU supports the running of the current Dialogue on Modernisation via a 2-year project with a budget of 0.5 MEUR.

Economic issues

After an impressive macroeconomic adjustment achieved during 2011 and the first half of 2012, Belarus' macroeconomic performance has deteriorated significantly. GDP growth slowed down to only 0.9% in 2013, down from 1.5% in 2012, as a result of weak external demand and a decline in competitiveness caused by rapid wage growth. In addition, trade disputes with Russia had a negative effect on chemical and potash exports, both of which serve as an important foreign exchange revenue for the country. These factors, together with tight monetary policies required to keep inflation on a declining path, resulted in further weakening of economic activity.

In 2013 inflation continued a downward trend reaching 18.3% at the end of the year. However, inflationary pressures still persist. They arise mostly from inconsistent economic policies, in particular the stimulation of wages and credit. This prompted the central bank to adopted a more restrictive monetary policy and suspend key-policy rate cuts from mid-year.

Following a remarkable improvement of the current account, which swung from a deficit of 13.8% in 2010 to a surplus in the first half of 2012, a significant deterioration ensued bringing the deficit back to the 2011 crisis level. Current account pressures continued in 2013 resulting in a deficit of 4.6% of GDP in the first half of 2013.

In addition to a quickly widening current account deficit, gross external financing needs were aggravated by the peak of external debt repayments in the period 2013-2015. This has put significant pressure on the balance of payments and it came at a time of limited financing options - inability of the authorities to agree on a new IMF programme and unfavourable conditions on external capital markets. External debt amounted to 54% of GDP in June 2013 while almost 40% were short-term liabilities. The authorities are relying on domestic borrowing from the banking sector, which is crowding out private financing. The government also envisaged significant privatisation receipts in 2014, which should be treated with caution since in the past actual privatisation receipts have often come well below targeted levels.

The fiscal position remained stable despite pressures on the revenue side coming from lower-than-expected economic growth and the sharp export contraction. The authorities partially offset revenue underperformance by streamlining expenditures and expect the deficit to reach 0.8% of GDP in 2013. The government debt is at a relatively moderate level (below 40% of GDP) but its currency and maturity structure is unfavourable, which makes the country vulnerable to possible disruptions in export revenues and debt re-financing sources.

Progress with structural reforms in 2013 was very limited. Privatisation has come to a stop despite commitments under the bail-out loan with the Eurasian Economic Community's Anti-crisis Fund. The much-needed restructuring of state-owned enterprises advanced at an unsatisfactory pace. On the positive side, there has been some progress with price liberalisation. The authorities have also stepped up their pursuit of WTO accession, a move partly driven by Russia’s recent entry into the organisation.

The EU has been conducting a regular Macroeconomic Dialogue at technical level with Belarus since 2011. The Dialogue has allowed for frank discussions of the key macroeconomic policies and structural reform challenges. During its third meeting of the Economic Dialogue, in October 2013, the EU underlined the need for macroeconomic adjustment measures to underpin competitiveness and address the new worsening of the balance of payments situation. In particular, wage growth and direct lending should be brought to a halt. It also encouraged the authorities to make bolder progress with structural reforms with the aim of establishing a fully-fledged market economy. It noted that although the recently announced Joint Action Plan (a plan adopted by the Government and the National Bank announced in October and supported by the Presidential administration) contains a number of positive elements, those are mostly isolated measures which do not form a strategic vision on structural reforms. The Plan simply tries to amend the current economic system to make it more efficient and dynamic rather than adopt a market economy model. This message was also conveyed at the meeting of the World Bank-led Structural Reform Group both by the EU and by the participating international financial institutions, notably the IMF, which stated that the Joint Action Plan provided an insufficient basis on which to build an IMF-supported programme.

Trade-related issues

The EU continues to be the second largest trade partner of Belarus with almost 30% share in the country's overall trade. Russia is Belarus' most important trading partner and absorbs almost half of Belarus' international trade.

The world economic crisis of 2008-2009 had an impact on the trade performance of Belarus too, but an upward trend could be noticed again over the past years. In 2012, bilateral trade flows increased by 7.5% compared to 2011 and amounted to 12.430 billion EUR.

Belarus' exports to the EU are dominated by mineral fuels. Other product categories - such as chemicals, agricultural products, machinery and textiles - all form a much lower share. The EU exports mainly machinery, transport equipment and chemicals to Belarus.

Apart from political conditions, WTO accession is a precondition for any enhancement of EU – Belarus trade relations. Belarus applied for WTO membership in 1993 but progress in its accession negotiations has been limited and political commitment appears insufficient. The last Meeting of the Working Party was held in May 2005. Informal Consultations took place in May 2013. The next Working Party meeting might be scheduled once all relevant technical inputs have been received from Minsk.

At present, Belarus is integrating into a Customs Union with Russia and Kazakhstan and building a Single Economic Space with these partners.

In 2013, Belarus remained suspended from the EU Generalised System of Preferences (GSP) preferential trade regime (Council Regulation 1933/2006 of 21 December 2006 temporarily withdrawing access to the GSP from the Republic of Belarus entered into force on the 21 June 2007). This Regulation was adopted by the EU Member States on the grounds of serious and systematic violations of core standards of the International Labour Organisation in Belarus. According to the World Bank classification, Belarus is an ‘upper-middle income’ country, thus not qualifying to benefit from preferential treatment under the GSP as of 1 January 2014.

The EU has introduced an Outward Processing Trade regime for Belarus. This regime provides for additional import quota amounts for textiles and clothing manufacturers within the European Union so they can produce garments in Belarus that will return to the EU after processing.

EU–Belarus – BACKGROUND

FACTS AND FIGURES

1995: Signing of the Partnership and Cooperation Agreement (ratification by EU Member States suspended since 1997).

1999-2000: Disappearances of several major figures of the opposition in Belarus.

2006: The European Commission presented a non-paper on “What the EU could bring to Belarus".

April 2006: The Council decided to adopt restrictive measures against President Lukashenka and officials personally responsible for the violations of international electoral standards.

October 2008: The Council decided to suspend the restrictive measures against Belarus to encourage dialogue and the adoption of positive measures to strengthen democracy and respect for human rights.

November 2009: The Council welcomed increased high-level EU-Belarus political dialogue, the establishment of an EU-Belarus Human Rights Dialogue, the intensified technical cooperation and the active participation of Belarus in the multilateral track of the Eastern Partnership, as ways of building mutual understanding and creating opportunities to address issues of concern.

January 2011: Against the background of the violations of electoral standards in December 2010 Presidential election and the subsequent crackdown on civil society and the political opposition, the Council reactivated the EU's restrictive measures against Belarus. They were further strengthened during 2011 (a ban on arms' exports to Belarus was also imposed), then in 2012. Further Council conclusions were adopted in June 2011 and March 2012. In October 2013, the Council extended the EU restrictive measures until 31 October 2014. The list of those targeted with a travel ban and asset freeze within the EU is under constant review and counts currently 232 names and 25 companies.

June 2011: The Commission proposed to Belarus to launch negotiations on Visa Facilitation and Readmission Agreements. In January 2014, Belarus answered positively to the proposal.

March 2012: Launching of the European Dialogue on Modernisation (DoM) with Belarusian society.

January 2014: Launch of the EU-Belarus negotiations on Visa Facilitation and Readmission agreements.

For further information:

Press release: Neighbourhood at the crossroads – tacking stock of a year of challenges (IP/14/315), 27 March 2014

For the Joint Communication check the EEAS website at http://eeas.europa.eu/enp/index_en.htm

Website of Commissioner for Enlargement and European Neighbourhood Policy, Štefan Füle: http://ec.europa.eu/commission_2010-2014/fule/index_en.htm

Website of High Representative and Vice President of the European Commission, Catherine Ashton: http://ec.europa.eu/commission_2010-2014/ashton/index_en.htm

European Commission: European Neighbourhood Policy

http://ec.europa.eu/world/enp/index_en.htm

http://www.enpi-info.eu

http://eeas.europa.eu/eastern/index_en.htm

http://eeas.europa.eu/belarus/index_en.htm

http://eeas.europa.eu/delegations/belarus/index_en.htm


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