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Štefan Füle

European Commissioner for Enlargement and Neighbourhood Policy

Address to the “For’UM” meeting

Figures and graphics available in PDF and WORD PROCESSED

Union for the Mediterranean “For’UM” meeting

Marseille, 27 May 2010

Excellencies, ladies and gentlemen,

It is a great pleasure for me to attend this “For’UM”. I want to express my congratulations to the French and Egyptian co-Presidencies for organising this event and focusing it on questions that lie at the very core of what we are trying to achieve within the Union for the Mediterranean: projects.

The Union for the Mediterranean is an attempt to tap the vast and still partly unexploited human and economic potential of our region. It is about renewable energy, de-pollution, better transport, increased trade, stronger regional education centres, and many other endeavours that can create the growth and, more importantly, the jobs that our region needs. The key to our shared stability and prosperity lies precisely in this attempt to champion innovation in all its forms, for the greater benefit of the 500 million people living in this region. When my friend Ahmed Masa’deh was offered the position of Secretary-General for the Union for the Mediterranean, we discussed this very issue and we came to the same conclusion on what the Mediterranean region needs to move forward: projects.

Of course we do not live and work in a political vacuum. The situation in the Middle East, the recently started proximity talks, the postponement to November of our Heads of State Summit all remind us of the importance, indeed the central character, of politics in the Mediterranean. Meanwhile, what is essential is that concrete work continues. The Secretariat is now established and preparing its work programme. Work accelerates in all areas. In short: Euro-Mediterranean co-operation goes on. When our Heads of State gather for the Summit in November, our partnership, in practical, political and institutional terms, will be even stronger and ready to offer real support for the region against the background of hopeful political progress. When we turn back towards our work in a few years’ time and we look at this period, it will be clear what has made the difference: projects.

This is why I consider that our work here today is of utmost importance — and why I am encouraged to see so many representatives of the business community, international financial institutions, States, companies and others here in Marseille today. Project financing is surrounded with complex and often difficult questions and constraints. Initial reflections of over a year ago gave rise to numerous initiatives that, in turn, helped develop those ideas and point the way towards the implementation of projects. Allow me, then, to add my bit to this general reflection with what I see as important contributions to today’s discussions as far as the European Union is concerned.

First of all, our financial framework: as you know the EU “financial perspectives” (as we call them) are set for seven-year periods and cover the entirety of the budget of the Union: not only our external action but also internal policies. The present financial perspective was agreed by Member States in 2006, well before the birth of the UfM, and it sets our spending framework until the end of 2013.

Naturally, while we cannot change the financial perspective, the Commission recalibrated its regional Mediterranean programmes, both bilateral and regional, to be in line with the priorities set by Paris and then here in Marseille in 2008. We spent €94 million on regional projects last year alone and we have financing decisions worth another €92 million this year. Among others, these decisions address UfM priority issues like the better management of the water sector (€22 million) and transport (€10 million). We have also ensured financing for other priority areas identified in Paris: €4.4 million for civil protection, spent on the EU Programme for the Prevention, Preparedness and Response to Man-Made and Natural Disasters in the Euro-Mediterranean region (PPRD); €5 million in preparatory work and studies for the Mediterranean Solar Plan; €1 million for the Euro-Mediterranean University in Slovenia; another €9 million on the project "Invest-in-Med" to support business development. Looking back from the early days of the Euro-Mediterranean process in 1995, the Commission has spent a total of €1.66 billion on regional projects dedicated to the Mediterranean over the last fifteen years.

Second, our instruments. We have tried our best to be innovative in terms of the financing instruments we use. In a situation of budgetary and programming constraints, it is absolutely crucial to avail ourselves of all the instruments and new tools at our disposal. One tool that has proven of particular worth is the Neighbourhood Investment Facility (NIF), for at least three reasons:

  • first, the amounts involved: the triggering and multiplying effects of grants put in circulation by the EC and Member States allow the mobilisation of considerable financing from European bilateral and multilateral financial institutions such as the EIB, the ADF and KfW: in just less than two years of activity, the NIF has aided investment in infrastructures in the Mediterranean region in the order of 5.5 billion Euros.

  • second, the targeting: the large majority of these projects are numbered among UfM priorities, especially the Mediterranean Solar Plan, with the financing of solar centres and other renewable energies, as well as the Horizon 2020 initiative with the financing of sewage projects and the treatment of waste water.

  • third, the flexibility: the NIF also allows the possibility of financing, in association with loans from European Financial Institutions, through a large variety of interventions: investments, technical assistance, studies, risk-capital operations, guarantees, etc. This is one of the innovative characteristics of the instrument, namely the advantage gained through its wide flexibility.

Let me cite another example which the Commission and the European Investment Bank have made available in order to help achieve the priorities of the UfM : the Mediterranean Facility for Investment and Partnership, probably better known by its French acronym – FEMIP. The budgetary support of the Commission to FEMIP aims at helping SMEs avail of either technical assistance or risk-capital finance.

However, having said all the above, and even with all our efforts and instruments, the resources that can be mobilised by grants and loans by European public actors – the Member States, the European Commission, financial development institutions - cannot alone meet the considerable financial demands of the region. According to EIB estimations over the next ten years we are looking at €100 billion for the energy sector ; €110 billion for urban renewal (water, transport, sewage); €20 billion for infrastructure (motorways, ports) and €20 billion for support of enterprise development.

It is, therefore, necessary to attract the interest of private sector actors (be they the banks or investors in general) and to create the minimal indispensable conditions for their participation in this great scheme. In a time of economic crisis, on which I don’t have to elaborate any further, we urgently need them with us. In my view it is not merely a question of return on investments, but rather it is necessary to undertake more profound work on the security of investments, to clarify the legal framework and to work on insurance mechanisms for investments. It will also be useful to explore how to introduce local savings in the financial circuits in order to enhance the capacity of actors from the South in this effort.

I think that, in the above, there are real opportunities for the Secretariat to grasp which will be beneficial to all. Apart from its principal role in the validation and visibility of projects, the Secretariat brings a genuine added value in its own right, and the Commission is ready to support it in its endeavours. Of course the Secretariat will need broad support by all UfM partners to succeed and I believe we should all be ready to provide them with good ideas. For instance, the “Conseil de coopération économique” is presently working for the Commission on identifying possible bankable projects for the Mediterranean, some of which could eventually become contributions to the work of the Secretariat as possible UfM projects.

There remains, evidently, the question of the financial framework after 2013. Discussions on the financial perspectives for 2014-2020 are starting and, for the EU and its Member states, this period is the moment to define strategies and priorities. It is the moment for the Union to establish and reinforce these priorities in its role as global actor and to define its strategy for each of the regions of the world.

It is obvious that we have a particular interest in the neighbourhood region, and the UfM is the articulation of that interest in the South. It will be the Member States who will oversee that debate at the end of the day, and it is within this framework that the Mediterranean should be included as a priority.

Ladies and gentlemen,

I would like to finish my intervention by emphasising once more the role the Secretariat can play in this effort of mobilisation and imagination for the benefit of UfM investments.

In effect, the work programme that will be elaborated by the Secretariat should bring us speedily to a proposition including suggestions for projects to be validated. In order for this work to have a wider resonance, it should be accompanied by a significant visibility effort which can then also be of benefit to the identified investments. I know that our Secretary General, Ambassador Masa’deh, is fully aware of this heavy responsibility and will employ all possible efforts towards building a mechanism that will facilitate the legal and financial engineering of UfM projects. His success and the success of the Secretariat are of paramount importance to all of us. I hope he knows he can count on the Commission’s full support, both financial and political, as well as on my personal commitment to his task.

Je vous remercie de votre attention.

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