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Štefan Füle

European Commissioner for Enlargement and Neighbourhood Policy

Exchange of views on South Caucasus and Ukraine

Figures and graphics available in PDF and WORD PROCESSED

Committee on Foreign Affairs (AFET), European Parliament

Brussels, 28 April 2010

Mr. President, Honourable Members of the European Parliament,

It is a pleasure and honour for me to share with you my personal impressions from the recent trips that I made to the three South Caucasus countries and to Ukraine earlier this month.

Let me start with the South Caucasus. I am particularly keen to have this exchange with you after your own deliberation and adoption of the report on South Caucasus

There was a clear and loud message to Europe that I heard throughout my trip to Armenia, Georgia and Azerbaijan. Presidents, Prime Ministers, parliamentarians, opposition and civil society all confirmed that they wanted a closer, deeper and fuller relationship with the EU.

My message to my interlocutors in Yerevan, Tbilisi and Baku was that the EU is also prepared to step up a gear and to develop concrete areas where a strengthened relationship can make a real difference for people in the South Caucasus and in the EU.

With the Eastern Partnership launched in Prague last year, my ambition is to make sure that this framework can deliver on a number of fronts.

First of all, we aim to upgrade our contractual relations with our Eastern partners. With Ukraine – that I will come to later – we have already been negotiating an Association Agreement for a couple of years and negotiations with the Republic of Moldova were opened early in 2010 and are continuing at cruising speed.

Today, I am pleased to report that the negotiating directives for Association Agreements with the South Caucasus countries will be presented for formal adoption at the Foreign Affairs Council on May 10. This will pave the way for the EU side to prepare for the launch of negotiations. These Agreements will allow for close political association between each of the partners in the South Caucasus and the EU, building on common values and shared principles.

Closely linked to the Association Agreements, the EU’s offer to establish deep and comprehensive free trade areas is also an immensely important opportunity for those South Caucasus countries that have fulfilled the preconditions. Such agreements of economic integration will provide access to the EU market of 500 million consumers and will help increasing trade flows and investments.

The area of visas and facilitating the mobility of persons is a field where the partners in the South Caucasus are calling for more from the EU, feeling the pressure from citizens experiencing complicated and lengthy procedures. The visa facilitation and readmission agreements for Georgia have already successfully been negotiated. Georgians can soon benefit from lower fees and easier visa rules. Following the example of Georgia, Armenians and Azerbaijanis would similarly like to start discussions with the EU that will facilitate travelling for citizens.

It is clear that the demands are high from our partners in the South Caucasus. But so are also the EU’s requirements on these partner countries to make sure that their legislation is in place and their administrative capacities strong enough to turn political ambitions into actual delivery of results. My message to the leaders in Armenia, Azerbaijan and Georgia has been and will always be that the responsibility for the internal reform processes and the strengthening of democracy and rule of law lie firmly in the hands of the governments and politicians of those countries. The Commission will provide technical and financial assistance to help the partners meet their objectives notably through the new Comprehensive Institution Building programmes that we are designing together with our partners in the East.

Honourable Members,

The developments within the partner countries will also play a significant role regarding the speed and impact of reforms as well as the possibilities for a deeper and more comprehensive association and integration with the EU.

In Armenia I urged all political leaders to advance political reforms, to improve electoral standards and to speed up the process of addressing some of the political issues emanating from the post-presidential elections of March 2008 allowing for national reconciliation and thus unblocking the full potential of the society.

Regarding the domestic political situation in Georgia and in particular the upcoming local elections in May, I had the opportunity to listen to both government representatives and the opposition parties. I stressed to both sides the clear need for adhering to international electoral standards, the importance of real political pluralism, a vibrant civil society and an open media environment as essential factors to consolidate democracy.

In Azerbaijan, there was a shared ambition of political leaders to embark on a concrete dialogue on broadening the EU-Azerbaijan cooperation beyond the energy sector. While we agreed that the "locomotive" of the EU-Azerbaijan cooperation is indeed energy we exchanged views on ways to modernise Azerbaijan, to diversify the economy and to strengthen development in the provinces. In this context, I called for further democratisation efforts and highlighted the importance of respect for human rights and fundamental freedoms.

Honourable members,

Throughout my trip to the South Caucasus I felt the presence of regional tension and the effects of armed conflict which have so dramatically impacted on people’s lives. I appreciated in particular the possibilities to speak to internally displaced persons in Georgia and in Azerbaijan; and to learn at its headquarters about the challenging work of the EU Monitoring Mission in Georgia outside Tbilisi. I firmly believe that the personal accounts and stories of human tragedy have helped me to better understand the challenges facing the people of the South Caucasus. Conflicts have haunted the South Caucasus for a far too long time. In my meetings I conveyed that the EU’s overall goal for the region is a stable, secure and prosperous South Caucasus.

The Armenia-Turkey normalisation process is very important and, while I note the new development of last week, I am pleased that Armenia remains committed to pursue this process. On Nagorno-Karabakh, the EU will aim to step up its support to ongoing peace efforts. As for Georgia, it is clear that the existing Geneva talks - as the only forum where all partners sit together - must continue and lead to concrete results beyond incident prevention. The Georgian strategy with its principles of “engagement through cooperation” is a laudable initiative which the EU supports.

Let me now turn to Ukraine.

Last week I visited Kyiv. This involved a number of useful and constructive meetings with the President, Prime Minister, Foreign Minister, members of the opposition and with representatives from business and civil society. The visit built on that of the High Representative and me to Kyiv on the occasion of President Yanukovych’s inauguration in February, as well as President Yanukovych’s own visit to Brussels on 1st March.

I also made a particular point of meeting with the Speaker of the Verkhovna Rada and with the chair-persons of a number of Parliamentary Committees including Boris Tarasyuk, Chair of the Parliamentary Committee for European Integration and Co-Chair of the EU-Ukraine Parliamentary Co-operation Committee.

The visit was timely as it coincided both with the government's preparations of its reform programme which are to be finalized by June and the announcement of an agreement on gas and on the lease of the Russian Black Sea Fleet base in Sevastopol.

I presented to the Ukrainian side a list of key reforms which Ukraine needs urgently to develop together with possible incentives and responses from the EU. This list covers areas like political reforms, macro-financial stability, trade and business environment, mobility and energy. It has been developed together with several Commission services, following discussions at previous Foreign Affairs Councils.

This will serve as a concise tool to provide a political steer to the government's reform programme. It will help to maintain momentum in the reform process. It will also help to anchor Ukraine to the wider process of European integration, building on other agreed key documents such as the future Association Agreement and the related Association Agenda.

On the Association Agreement, a strong desire was expressed to sign the Agreement in 2010. I explained that more work was needed particularly on the deep and comprehensive free trade area by the Ukrainian side but underlined our strong commitment to completing negotiations as soon as possible.

On the issue of visa dialogue, I explained that the Commission was working towards a "road map approach" but further “homework” was needed on the Ukrainian side. On our side, constructive initial discussions have taken place with EU Foreign Ministers but these need to continue. We are hoping for further progress in the run up to the EU-Ukraine Summit in the autumn.

I also underlined the importance of inclusivity in implementing the process of European integration across the political divide and with civil society. Opposition leaders confirmed their commitment to supporting those reforms related to European Integration. I passed over copies of the reform list to leaders of the opposition and underlined the need to collaborate closely within the Parliament on the implementation of the reform agenda.

I have been informed about the new deal on gas with Russia and the extension of the lease of the Russian Black Sea Fleet base in Crimea. As those of you who have followed the Parliamentary debate in the Ukraine yesterday know, these are controversial issues with strong opposition domestically.

On the government side, I understand that the re-negotiation of the gas deal was essential to ensure Ukraine’s future economic stability. The new Agreement should make it possible for Ukraine to adopt a budget for 2010 and to re-launch negotiations with the IMF on the standby arrangement with Ukraine. However, opposition leaders criticized the new agreement on the Black Sea Base as giving away sovereignty.

I underlined that these decisions are sovereign matters for Ukraine. As regards gas, the agreement would be assessed by the EU ultimately against (a.) the need to ensure security of supply (b.) the principles of predictability and transparency and (c.) the need to ensure the rehabilitation and modernization of the gas transit system.

I take away from this mission a number of key thoughts. Firstly it is very early days for the new administration. The leadership has communicated strong signals concerning its commitment to the process of European integration and reform. We will know much more on this once it publishes its reform programme in June. The reform matrix, as well as other tools such as the Association Agenda, will allow us to judge the extent to which promises on reform are matched by actions. This will be one of my top priorities in the coming months.

Secondly, it is clear that the EU must be ready to engage with Ukraine if and when it does implement reforms. Again the list I mentioned before provides examples of possible responses to positive steps by the Ukrainian side. These range from further economic and financial assistance through to progress in the area of mobility and greater economic integration into the EU.

Thirdly, it is important that we engage not only with the government but also other key players, including the Ukrainian Parliament, members of the opposition, business and representatives of civil society in the process of European integration. European integration should be an inclusive process. I was encouraged by the commitment of the opposition to support reforms which take forward European integration.

In taking forward our work in the South Caucasus and Ukraine, and indeed throughout the European Neighbourhood, I believe the European Parliament, this Committee and the Parliamentary Cooperation Committee have a very valuable role to play. I am therefore grateful to have had the opportunity to brief you on these missions today.

In line with the practice of previous years, the Commission will continue to monitor developments in the neighbouring countries, through our annual reports on the implementation of the European Neighbourhood Policy. This year’s ENP reports will be a mix of praise as well as indications where further efforts are needed to fulfil the objectives of the Action Plans. I am looking forward to coming again to the European Parliament on 17 May, only a few days after the issuing of the ENP reports, to discuss developments with you.

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