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FACT SHEET - EUROPEAN UNION'S CONTRIBUTION TO THE BALKANS
European Union Press Release August 12, 1999

No. 54/99
August 12, 1999

Since the end of the Kosovo crisis, announcements about assistance to Kosovo and the region and about organizations involved with the Balkans have been multifold and confusing. This Fact Sheet is an attempt to describe the European Union’s contribution to restoring peace, stability and prosperity to the region. We will update this Fact Sheet as new developments occur. The facts will show that the European Union is the major contributor to the international effort.

At the First Donor Conference for Kosovo held on July 28 in Brussels and sponsored by the European Commission and the World Bank, $2.1 billion was pledged, of which $1.1 billion was from the European Union and its member states. (See Annex 1).

The conference concentrated on raising funds which would be sufficient for urgent humanitarian financing needs, winterization of housing, restarting the economy and local civil administration and public services in 1999.

• The largest part of the EU pledge was Humanitarian Aid from the European Community Humanitarian Office (ECHO) and EU Member States=$876 million. Most of the pledge has been mobilized and considerable amounts have already been disbursed.

• Reconstruction & Development was second with $247 million pledged by the European Union and its member states, of which $48 million has been already committed. In addition $500 million per year will be made available by the EU for the years 2000-2002. A complete needs assessment is ongoing and will be finished in the fall to be followed by a second donor conference.

• The European Commission has established a Task Force headed by Director Marc Franco) which went directly to the field to determine reconstruction needs. The Task Force will be replaced by the European Agency for Reconstruction (Director – not yet appointed) which will be set up to handle the disbursement of funds for reconstruction.

Special Representative of the Secretary General (SRSG) Bernard Kouchner (France)
Principal Deputy to the Special Representative Jock Covey (United States)

The four functions of UNMIK and their Deputy Special Representatives are:

 
• Interim Civil Administration: Dominique Vian (France)
• Humanitarian Affairs: Dennis McNamara (New Zealand)
• Institution Building: Daan Everts (Netherlands)
• Reconstruction: Joly Dixon (United Kingdom)

The EU has contributed $15.7 million for the initial needs of UNMIK.
 

The activities described above need to be seen against the background of the overall EU support to stabilize the Balkan region as a whole. Details of our efforts follow:

• The Stability Pact for South-Eastern Europe, an EU-initiative, was approved by the European Council in June in Cologne. It provides a framework, wider than the EU, in which all can contribute to lasting peace and stability, democracy, economic prosperity and reinforcing security in the region. The Council invited other countries and organizations to participate and the Pact was formally launched at a Summit in Sarajevo on July 30.

Participating: European Union (EU member states and European Commission), Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Hungary, Romania, Ukraine, Moldova, Russian Federation, Slovenia, Former Yugoslav Republic of Macedonia (FYROM), Turkey, United States, Canada, and Japan. Also representatives of the United Nations, Council of Europe, NATO, and international financial institutions

The Special Coordinator is Bodo Hombach (Germany) and Donald Kursch is the Deputy Special Coordinator (United States). They will coordinate a Regional Round Table and 3 working tables on:

1. Democratization and Human Rights
2. Economic Reconstruction, Development and Cooperation
3. Security Issues.

• Macroeconomic Support for the region

Earlier this year the European Union gave macro-economic assistance to Albania ($20 million and Bosnia-Herzegovina ($60 million). The European Commission has now proposed over $400 million for Bulgaria, FYROM and Romania. In both cases the aim is to prevent balance of payments problems in the countries from the economic effects of the Kosovo crisis.

• A High Level Steering Group at ministerial level comprising of the European Commission and the WB, IMF, EIB, EBRD, the EU Presidency and G-7 Finance Ministers) provides strategic direction and coordination for international economic support to the region.

The EU is committed to accepting as full members all European countries which meet the democratic and economic criteria set out by the European Council in June 1993. The Union has been working vigorously since 1989 to help the countries of Central and Eastern Europe (CEE) make the transition to fully functioning democracies and market economies. Europe Agreements were signed with ten countries in the early 1990s covering trade, aid and political cooperation, as a platform for eventual EU membership.

Negotiations for full EU membership opened in March, 1998 with five CEE countries (the Czech Republic, Estonia, Hungary, Poland, and Slovenia) and Cyprus. Accession Partnershipswere signed with the other five CEE applicants (Bulgaria, Estonia, Latvia, Romania, and Slovakia) at the same time, to step up cooperation in preparation for EU membership.

The overall state of readiness of each country for full membership negotiations is reviewed annually.

Turkey and Malta have also formally applied for EU membership. The EU applies the same criteria in determining their readiness for full membership negotiations. Turkey already has an association and customs union agreement with the EU and Malta also has an association agreement.

Stabilization and Association for SEE countries

Acknowledging the special situation in South Eastern Europe, the EU is now stepping up efforts to help the SEE countries to stabilize, reform their political and economic institutions, and prepare for eventual EU membership. Countries eligible for the new arrangements are Albania, Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia (under certain conditions), and the Former Yugoslav Republic of Macedonia.

The Stabilization and Association Process for SEE countries is set out in a Commission Communication of May 26, 1999. It provides for:

• a new type of contractual relationship known as Stabilization and Association Agreements;
• the development of existing economic and trade relations with and within the region;
• the development and partial reorientation of economic and financial assistance;
• more aid for democratization, civil society, education, and institution-building;
• new opportunities for regional political dialogue and cooperation in justice and home affairs.

As a result of the arrangement, all the countries of South Eastern Europe, except Yugoslavia, will enjoy favorable contractual agreements with the EU.

Abbreviations:

EBRD = European Bank for Reconstruction and Development

ECHO = European Community Humanitarian Office

EIB = European Investment Bank

FEOGA = European Agricultural Guidance and Guarantee Fund

OBNOVA = Fund for the Reconstruction of the Former Yugoslavia

PHARE = Program of Community Aid for Central and East European Countries

^{1 The financial amounts recorded in this table are initial indications of financial support from donors, and some have been made subject to budgetary approvals and procedures. Moreover, some donors were not in a position to make such preliminary indications at this stage, and further financial support is expected to be forthcoming. The allocations to categories should also be considered indicative. Some donors can be expected to modify allocations between the categories once a reconstruction and recovery program setting out financing needs is available.
2 Includes Australia, Norway, Slovakia, Switzerland, and Turkey
3 Includes CE Social Development Fund, UNDP, UNICEF, and World Bank}

^{Of the total of Euro 2,091 million (USD 2,168 million) in financial indications announced, donors reported approximately Euro 459 million (USD 475 million) as either spent or firmly committed for delivery of goods and services in the first half of 1999.}

^{Humanitarian assistance includes amounts in support of Kosovo refugees and returnees, both in Kosovo as well as in neighboring countries prior to return. Transition to Civilian Administration includes amounts for the UN Trust Fund as well as amounts for direct support to civilian administration. Other Urgent Programs includes peace promotion, media, civil security, democracy, as well as reconstruction and development. It should be noted that it has been difficult to establish full consistency in recording of breakdowns for these categories across donors at this stage.}

^{Some numbers may not add up due to rounding.}

^{(1) As of end-April 1999, except for EIB and EBRD figures which include assistance from 1991 to 1998, and Member States' assistance which covers 1990-1997}

^{(2) Grant macro-financial assistance to Albania decided in 1992 and 1994 are included in Phare financing.}

^{(3) Out of the 60 million euros of balance of payment support, the 15 million euros grant programmed for 1999 will be financed by Obnova. The total amount under Phare+Obnova line has thus been reduced by 15 to avoid double-counting.}

^{(4) Other actions mainly include food aid to Albania provided by FEOGA (120 million euros) and demining and other actions in Bosnia (200 million euros).}

^{n.a. = not available}

^{(1) Indicative allocations.}

^{n.a. = not available}

^{European Union
Delegation of the European Commission to the United States
2300 M Street NW, Washington DC 20037
Telephone: (202) 862-9500
Fax: (202) 429-1766}

^{Copyright © European Union, 1995-1999. All Rights Reserved.}

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