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EU's support to partners in transition links values with economic and social progress

European Commission - SPEECH/14/374   14/05/2014

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European Commission

[Check Against Delivery]

Štefan Füle

European Commissioner for Enlargement and European Neighbourhood Policy

EU's support to partners in transition links values with economic and social progress

EBRD Annual meeting in Warsaw, Poland

Brussels, 14 May 2014

Mr President, Prime Ministers, Excellencies, Ladies and Gentlemen,

I am delighted to have the opportunity to share with you today my views and personal experience of supporting the European Union's partnership countries to achieve their ambitious goals of becoming free, open and prosperous States. And it is an honour to do it in this company.

Allow me to start with three remarks:

First, the values upon which the European Union is founded - freedom, democracy, the rule of law and respect for human rights - are inextricably linked to the economic and social progress the European Union has achieved since its creation. When the outside world looks at the European Union, what stands out in their eyes are its values, its prosperity, its high standards of social services and the wide range of opportunities for all.

Second, transition has never been simple. It demands painful political and economic reforms, based on an inclusive process of dialogue, to achieve an open, free and transparent society and market, with effective government institutions and regulatory frameworks, upheld by the law and the State, the same rules for all, without privileges.

Third, during the time of the current Commission, we have developed and strengthened our European enlargement and neighbourhood policies, providing clear frameworks for countries to transform. We have forged genuine partnerships, making deep efforts to help modernise countries which spare no effort in democratisation and moving towards social and economic progress.

The attractiveness of the model and values the European Union stands for, combined with the strengthening of our policies and instruments, has deepened our ties with the neighbouring countries, while challenges remain to be addressed in the years ahead.

Let me now give some concrete examples, starting with the area of European Union enlargement, how we have been using this most powerful tool to support transition in the accession countries.

Last February, at EBRD in London I had the pleasure of launching the new approach to economic governance, enabling governments to strengthen coordination of economic reforms. Together with International Financial Institutions, we will also provide enhanced policy and financial support, making the Western Balkans region more attractive for public and private investors and contributing to an improved economic situation.

The investment needs in the region are substantial. I was therefore delighted with last November's agreement between European and International Financial Institutions to intensify their cooperation on key infrastructure investments in the six Western Balkan countries including priority transport and energy projects. This will be done through the Western Balkans Investment Framework to make sure that resources flow through a single pipeline. And we count on the EBRD to be one of the driving forces in this process.

You are well aware that we have reinforced our approach to rule of law in the area of enlargement which is also a precondition for economic development. And this year, we will provide a new focus on the importance of public administration, thereby completing the framework for a well-functioning modern state. These are three new pillars for new and positive enlargement story. Three pillars to move enlargement process from ticking the boxes to track record of implementation. Three pillars of credibility.

We have seen some very positive developments in the enlargement area in the recent years. Croatia became a member in 2013. Montenegro and Serbia are taking important steps in the negotiations. The negotiations for a Stabilisation and Association agreement with Kosovo were finalised on 2 May, the text is now discussed by Member States. We have recommended the candidate status for Albania and the Member States will take the decision in June, on the basis of the Commission report.

However, Enlargement has not been without challenges. But let me underline in this context that the ultimate wish to move forward on crucial reform issues cannot come from the European Union, but from the governments themselves.

Ladies and gentlemen,

I would like to turn now to our European Neighbourhood Policy, reviewed in 2011, to address new and more demanding challenges in both South and East.

Let me start with the East by saying a few words about Ukraine. The European Union is committed to Ukraine's unity, sovereignty, independence and territorial integrity. We will not accept annexation of Crimea and we deplore those who instigate and support instability in the East of the country. The European Union has a firm commitment to providing strong political and financial backing to Ukraine:

• On 21 March we signed the political chapters of the Association Agreement and we have recently adopted a set of unilateral trade measures that open the European Union's market to Ukrainian goods immediately;

• We created a Support Group to help Ukraine to implement so called “European agenda for reform” encompassing political and economic reforms agreed with Ukraine;

• The European Union has made additional 1 billion euros of Macro-Financial Assistance available in a new programme;

• A State-Building Contract was been signed yesterday, with an initial disbursement of 250 million euros scheduled to take place shortly; and

• Energy dependency on Russia has been reduced by means to reverse gas flows from Slovakia to Ukraine, in addition to flaws from Poland and Hungary. In this context, prime minister Tusk let me appreciate your recent constructive and important contribution to the debate on energy security in the EU.

In parallel, Ukraine will receive financial support for its stabilisation and reform in the coming years, with at least 11 billion euros (~15, 2 billion US dollars) from the EU, EBRD and EIB, in addition to the 17 billion US dollars from the IMF and the World Bank.

The EBRD stands out in this respect, thanks to its dynamic and substantial support for developing the financial system and private sector.

We can see deep transitions successfully underway in Moldova and Georgia. Both countries will get even closer to the European Union when they sign the Association Agreement, including Deep and Comprehensive Free Trade Area, before the end of June. Moldovan citizens can, since April, travel visa-free to the European Union. Investment conferences to stimulate private sector investment are planned for both countries, and existing financial support packages will be further strengthened.

Our political commitment to the three partners with the AA/DCFTAs is stronger than ever - just this week and next the Governments of Ukraine, Moldova and Georgia are visiting Brussels to meet with the European Commission to further build on our respective agendas. Those are the first non EU Member States to ever to participate in this executive to executive dialogue with the Commission.

Ladies and gentlemen,

Let me finally say some words about our southern neighbourhood: the European Union has made considerable efforts to respond to the Arab revolutions and our Neighbourhood Policy remains the centrepiece of our relations with these countries.

Following the EU's adoption of a Partnership for democracy and shared prosperity with the Southern Mediterranean in 2011, we have increased financial assistance for those partners demonstrating greater commitment to reforms, and offered greater trade and mobility opportunities based on more for more principles.

Significant investments have also been made by the IFIs in the Southern Neighbourhood, and I welcome the EBRD's greater engagement in the region.

In Tunisia, the democratic transition has moved forward thanks to inclusive dialogue. To make Tunisia a success story we need greater support to tackle the current economic challenges. In Morocco reforms have also progressed; the country has embarked in negotiations of an economic integration agreement with the EU, which will require significant investments. Both countries have signed mobility partnerships.

However, progress on reform has remained uneven. In Egypt, for example, transition has been slower, indeed much slower. In Libya, the political instability is delaying the economic recovery, in a country which however offers substantial investment opportunities. And then there is the continuing horror in Syria.

Ladies and Gentlemen,

To conclude, the last five years have shown that the European Union remains an attractive model and important partner for its neighbourhood. It has established a credible framework for its cooperation with these countries, more coherent, where our values and our interests are not divided but closely linked.

Let me underline in this context the importance of the role of International Financing Institutions, in particular the EBRD, which has helped to assist countries in transition into free, open and stable societies across Europe. I would like to thank you for delivering effective and concrete support at this crucial moment in Europe. Dear Mr Dear Mr President I agree with your call, let's reenergize transition! Let's do it together! We have a solid basis to put this commitment in practice. During the last couple of years we have strategically aligned our operations in the neighbourhood – including blending mechanism – we have changed the perspectives. The EU does not only act anymore on the demanding side and EBRD only as an executing agency but it is rather a partnership where you have an increasing say in our shaping of neighbourhood policies.

Strong cooperation between all international actors will continue to be key to addressing challenges and I can ensure you that the European Commission is committed to continue this successful cooperation.

Thank you for your attention.


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