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European Commission

MEMO

Brussels, 27 March 2014

ENP Package – Libya

Since the Revolution in 2011, Libya has made some progress on the path of democratic transition, as witnessed, among others, by the first ever free elections in July 2012. However, three years after the revolution, fundamental challenges remain. The absence of a political settlement and the deteriorating security environment are the most pressing concerns. The EU is a key partner supporting Libya in the transition process through a comprehensive programme focusing on support to public administration, migration, civil society, social services and security. The EU will continue to seek to re-launch negotiations for a comprehensive agreement with Libya which will normalise relations in a mutually beneficial legal framework

Political situation and latest developments in EU relationship with the country

The EU has accompanied the transition process from the very first moment, aiming to help to achieve a democratic, stable and prosperous Libya. More specifically this involves promoting “deep and sustainable democracy”, based on strong, transparent and accountable institutions and a vibrant civil society. In the area of stability and security it involves addressing the root causes of conflict, supporting State's security institutions, while tackling illicit trafficking. The EU is also promoting the integration of Libya within the region and the world at large.

The EU will continue to seek a comprehensive agreement with Libya (drawing on the Association Agreements concluded with neighbouring countries) in order to formalise and normalise relations in a mutually beneficial legal framework. This will create the basis for increased dialogue and cooperation on many areas of common interest

Three years after the 17 February 2011 revolution the situation in Libya is still unstable and volatile. The hope and enthusiasm with which Libyans participated in the June 2012 elections has since given way to a generalised sense of insecurity and increased disenchantment with the political process, which has remained in a stalemate since July 2012. Contrary to expectations at the time, the country is still in a transition phase. The transition calendar foreseen in the Constitutional Declaration of 2011 proved too ambitious and general elections, based on a new constitution, are now unlikely to happen before end 2014.

One of the main challenges for 2014 will be the drafting process for the new Constitution. Elections for the Constituent Drafting Assembly (CDA) took place on 20 February, the electoral process was followed by an EU Election Expert Mission. The EU High Representative Catherine Ashton commended the Libyan High National Electoral Commission for all efforts to conduct election and condemned the violent incidents in certain parts of the country, which deprived voters of their basic democratic rights. A referendum on the Constitution is foreseen later in the year.

Tribal and local skirmishes continue, politically instigated violence is a daily reality and clashes between military brigades outside of the control of the State are a frequent occurrence. The security situation has deteriorated and the political landscape is increasingly fragmented and polarised, especially after the adoption of the political isolation law early 2013.

The political and security vacuum is being exploited by actors of all sorts, including criminal groups. Central authorities are challenged by numerous competing power bases. Boycotts, intimidation and extortion have become recurrent means of exerting influence and pursuing agendas. Most state institutions are still weak despite support programmes for institutional capacity building. In addition, the political space for the executive, legislative and judicial institutions to develop policy, take and implement decisions is limited due to the lack of political settlement, the weakness of the state security institutions and the influence of (militant) non-state actors.

Federalists in the East announced the establishment of a government for Cyrenaica and have blocked oil exports since mid-2013. In March 2014 the UN Security Council adopted Resolution 2146 (2014) which authorises UN Member States to inspect on the high seas vessels that have been designated by the Sanctions Committee as illicitly exporting Libyan crude oil and to take commensurate measures to ensure the return of this oil to Libya The forced closure of export terminals has reduced output from 1.5 million barrels per day (bpd) to 250.000 bpd, thereby severely affecting Libya fiscal situation.

Over the past three years, due to porous borders and the lack of effective security institutions, Libya has become the main transit country in the Mediterranean for economic migrants, refugees and asylum seekers (mainly from Africa and more recently also from the Middle East) en route to Europe. The "Lampedusa" tragedy in October was a strong reminder of the plight of these migrants and the need for a comprehensive migration policy and -management strategy.

Despite dedicated efforts of key ministers, Human Rights remain a concern, especially the situation of detainees and refugees, migrants and IDPs, minorities and women. Many of Libya's human rights problems largely stem from the absence of an asylum space, weak state authority, the prevalence of non-state actors (militias), the lack of institutional capacities and continuing gaps in relevant legislation.

The core problem impeding post conflict stability and security is the absence of a comprehensive political settlement. Therefore, the most immediate challenge is arriving at a consensual agreement on a political settlement that sets the transition process back on track and resolves core issues, such as the functioning of the State, the role and separation of powers between the executive and legislative, national reconciliation and transitional justice, and the distribution of national resources and wealth.

In the field of security, the priorities remain (i) ensuring law and order through professional law enforcement agents, (ii) establishing a national security architecture, (iii) establishment of state security institutions and forces, including political engagement with the ex-fighters (iv) border control and management, (v) arms control (arms and ammunitions decommission), (vi) countering terrorism, human trafficking, smuggling and organized crime.

The EU is active in all of the above fields through a variety of cooperation programmes and projects. In the field of security and border control, with the establishment of the EU Border Assistance Mission (EUBAM), the EU is consolidating its presence as the main international actor on integrated border management. EUBAM has started delivering on training and advisory activities and has developed good relations with the Libyan authorities.

The EU will continue the discussions aiming at Libya’s full participation in regional cooperation. Libya's decision to join the Union for the Mediterranean as an observer is an important step in this context.

Economic and social issues

The economy of Libya depends primarily upon revenues from the petroleum sector, which represents 90 % of state revenues and accounts for more than 70% of the country's GDP. Libya has the highest GNI per capita in Africa ( 9,491).

Libya recorded favourable growth rates with an estimated 10.6% growth of GDP in 2010. This was interrupted by the 2011 conflict, which resulted in contraction of the economy by 62 % in 2011. Throughout 2012 the economy rebounded by 104% and oil production went back to pre-revolution levels. However, the second semester of 2013 has been marked by a disruption in oil production and oil exports caused by worker's strikes and/or blockades of oil terminals. As a result Libya recorded negative growth for 2013 and a budget deficit.

The lack of security has a negative impact on business climate. In its "Doing Business 2014" report published in November 2013 the World Bank ranks Libya 187 (out of 189 economies worldwide).

With the security situation featuring so prominently on the agenda, thus far little attention has been paid to the diversification of the economy and job creation. Libya is amongst the least diversified economies in the world with around 80% of employment generated in the public sector, creating a patronage system for distribution of economic opportunities.

Health and education services are slowly recovering, providing basic services in most areas in the country. Enhancing the quality of these services and ensuring their inclusiveness are among the challenges.

Corruption was always a major concern in Libya under the previous regime (Libya ranked 146 out of 178 on the Transparency International Index in 2010). The Libyan authorities have indicated their commitment to enhancing transparency in all sectors.

Trade-related issues

The EU is the main trading partner with Libya accounting for 70% of its total trade which amounted to approximately € 35.5 billion in 2010. This is not expected to have changed after the events in 2011.

Some agriculture and fisheries products are exported to neighbouring countries, especially Tunisia and Egypt.

The regulatory framework for the oil/gas sector remains rather opaque and was in the past often surrounded by accusations of corruption. Trade in non-hydrocarbon related goods is almost non-existent but offers interesting growth potential.

The investment rules in Libya do not provide for 100% ownership by foreign companies. There is considerable unease about these provisions with EUMS companies.

EU Cooperation

Over the last three years the EU has delivered substantial financial and technical assistance to support the Libyan people in their transition towards democracy. During the 2011 conflict, the EU provided immediate humanitarian actions through the European Commission Humanitarian Office (€80.5 million) to address urgent needs and to support the stabilisation priorities of the authorities. Since the end of the conflict, this was followed by a comprehensive development package of projects with a longer-term perspective. EUs total programme in Libya now stands at €130 million focusing on public administration, security, democratic transition, support to civil society organisations, health, vocational training and education as well as migration.

Security. This is clearly a key issue, affecting the lives of Libyan citizens and impacting on economic development. The main EU programmes in this sector include:

i. “EUBAM Libya” (€30 million for 2013). This civilian mission, launched under the Common Security and Defence Policy, responds to an invitation by Libya and is part of a broader EU strategy to uphold the Libyan post-conflict reconstruction. The strategic objective of EUBAM Libya is to support the Libyan authorities to develop capacity for enhancing the security of their land, sea and air borders in the short term, and to develop a broader Integrated Border Management (IBM) strategy in the long term.

ii. “Security and Justice support programme” (€ 10 million). The programme promotes rule of law in Libya through strengthening democracy, good governance and civilian culture in the security and justice sectors. In particular, it focuses on justice and police reform providing expertise and mentoring as well as training capacity.

iii. Other programmes are building the Libyan Authorities’ capacity to identify security threats, investigate criminal and terrorist activities, clear explosive remnants of war and unexploded ordnances, exercise effective national control over their conventional weapons and ammunition, tackle irregular migration and illicit trafficking by strengthening their maritime border surveillance systems.

iv. Other initiatives implemented by civil society organisations are promoting conflict mediation and reconciliation in the Libyan communities.

Migration: The EU is implementing six programmes for a total of €30 million to support the government in dealing with migration flows and assistance to the migrants (e.g. legal framework and sector policies, humanitarian assistance in retention centres, support to vulnerable groups, voluntary return programmes).

Economic recovery is promoted by Technical Vocational Education and Training (TVET). The TVET programme (€ 6.5 million) seeks to improve the quality of the training on offer as well as its relevance to the demands of the labour market. In addition, reintegration of unemployed could help support integration of former fighters.

The programme "Better quality education and increased inclusiveness for all children" (€2.4 million) is supporting access to quality education for all children, including children with special needs, children affected by the conflict and in particular the internally displaced children.

Health, the EU has always considered the health sector in Libya as a priority for assistance. The Libya Health Systems Strengthening (LHSS) Programme (€8.5 million) aims at strengthening strategic planning, financing and management of health service delivery and human resources through targeted reforms.

Public Administration: With a total budget of €4.5 million, the programme is designed to support Libyan institutions (e.g. GNC, government, High National Electoral Commission) with capacity building activities.

Protection of vulnerable groups (€ 2.4 million) by developing effective protection systems for minorities, people with disabilities, internally displaced people and migrants, and strengthening the capacity of national and local authorities and non-state actors to meet their particular needs.

Civil society organisations were not allowed to play a role under the old regime. This has now drastically changed; the new Libyan Authorities consider civil society as an important element of the democratic transition process and actively promote civil society actors. Libyan civil society actors eagerly used this opportunity to get organised and participate in the transition process. The EU has embarked on a significant and comprehensive series of programmes for a total amount of €26 million supporting both the development of the institutional dimension of the civil society sector and capacity building of civil society organisations.

The "European Instrument for Democracy and Human Rights" has funded activities in the areas of democratisation, women's rights, media training, support to torture victims, national reconciliation and capacity-building related to the elections.

In 2013 the European Union announced a €25 million package financed from the European Neighbourhood and Partnership Instrument (ENPI) for “Support to Libya for Economic Integration, Diversification and Sustainable Employment” (€10 million), “Protection of vulnerable people in Libya” (€5 million) and a new initiative on migration to "Support a rights-based migration management and asylum system in Libya" (€10 million). These programmes start their activities in 2014.

In 2013, Libya was awarded an additional € 5 million allocation under the SPRING Programme. This will support the elections in 2014 and help the media sector to accompany the elections and the constitutional process with quality coverage.

FACTS AND FIGURES

    October 2007: Council decision to start the process of negotiating a Framework Agreement with Libya

    November 2008: Launch of negotiations (ten negotiation rounds took place)

    June 2010: Signing of Memorandum of Understanding for providing EUR 60 million of financial assistance to Libya for the 2011-2013 period. A revised version was signed with the transitional government on 31 August 2012.

    26 February 2011: the UN Security Council adopted resolution 1970 (2011) imposing travel bans, asset freezes on Gaddafi and members of his close entourage. End of negotiation process on Framework Agreement.

    17 March 2011: the UN Security Council adopted the Resolution 1973 (2011) which authorised the use of force against Libyan forces loyal to Col Gaddafi in order to protect Libyan civilians

    22 May 2011: Visit HR/VP Catherine Ashton to Benghazi. Official opening of the EU Benghazi Office

    21 -24 August 2011: Liberation of Tripoli, opening of EU Tripoli Office

    23 October 2011: Day of Liberation

    12 November 2011: Visit HR/VP Catherine Ashton to Tripoli. Official opening of the EU Delegation to Libya

    7 July 2012: Elections for the General National Congress

    9 August 2012: Transfer of power from the National Transitional Council to the Libyan General National Congress and dissolution of the former. Appointment of Mohamed Yousef el-Magarief as President of the GNC and Libya’s de facto head of state.

    November 2012: Government takes office with Ali Zeidan as Prime Minister

    26 June 2013: Following the resignation of Yousef el-Magarief, Nouri Abu Sahmain became the new President of the GNC

    Current GDP: US$ 77.7 billion (2012, IMF estimates) o. w. about 70% from hydrocarbons

    GDP per capita: US$ 11.800 (2012, IMF estimates)

    Total exports: US$ 46.1 billion, o. w. hydrocarbon US$ 44.6 billion (2012, IMF estimate)

    Total imports: US$ 29.9 billion (2012, IMF estimate)

    Unemployment: 21% (2009) public sector employs over 1 million people, 50% of work force

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/enp/index_en.htm

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

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


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