COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.12.1996 
COM(96) 601 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
on European Union cooperation with the 
Central European Initiative (CEI) 

Commission report to the Council 
on European Union cooperation with the 
Central European Initiative (CEI) 
Summary 
The Commission is presenting this report in response to a request by the Florence 
European Council. The Commission seeks to promote regional cooperation among 
partner countries, notably, in the present context among those forming part of the Central 
European Initiative. By fostering good-neighbourly relations, encouraging political 
stability, strengthening human rights and democracy, inter alia in the social field, and 
boosting economic and trade cooperation, the Commission wishes not only to forge 
closer ties between the European Union and the CEI but also to encourage closer 
relations among those countries. 
Support from existing Community programmes such as PHARE, TACIS and 
INTERREG could be envisaged to complement projects presented and financed in the 
CEI context. There are a number of fields of particular interest, including activities to 
strengthen democracy and stability, boost economic development and free trade, underpin 
the development of the trans-European networks and the protection of the environment, 
foster closer links between economic operators, in particular SMEs and their 
representative professional bodies, guarantee individual and collective rights in the social 
field, enable cooperation to take place on justice and home affairs and extend cross-
border cooperation, especially between local and regional institutions in the various 
countries. 
INTRODUCTION 
1. In accordance with the conclusions of the Florence European Council, the 
Commission is presenting a report on appropriate initiatives to take with a view to 
stepping up cooperation with the Central European Initiative (CEI). In keeping with the 
spirit of the conclusions of the Essen European Council, the objective of this exercise is 
to pinpoint areas of common interest between the EU and the CEI to put forward an 
initial overall analysis of the possible fields of cooperation and to identify the means 
available to foster practical forms of cooperation. 
2. The Commission considers that it will be useful to encourage regional 
cooperation schemes in this part of Europe as it sees them as a way of bolstering stability 
between the countries concerned. Through its Baltic initiative drawn up for the summit of 
Heads of Government of the Council of Baltic Sea States held in Visby in May 1996, the 
Commission has already proposed measures to strengthen cooperation in this northern 
part of Europe. The Commission believes that the Black Sea constitutes, in the south of 
the continent, another strategic area of major importance for the EU and would like to 
see increased regional cooperation between the Black Sea states. 
3. The advantages from the creation of such organizations and from the decisions 
taken and projects adopted under these regional cooperation instruments should be the 
main yardstick for gauging the usefulness of any additional action by the EU. The 
Commission's intends to assess these groupings in terms of the geographical and 
economic homogeneity of the area concerned, the political support for such cooperation, 
both within the region and within the EU, and existing or potential achievements. The 
active involvement of the countries concerned in this machinery, inter alia through 
financing, is a key factor in demonstrating their commitment to it. 
4. The Central European Initiative brings together 16 countries (see map). Some of 
them belong to the European Union (Austria and Italy), some have signed Europe 
Agreements and are applicants for accession (Bulgaria, Czech Republic, Hungary, 
Poland, Romania, Slovakia and Slovenia) while others either have contractual ties with 
the European Community through varying arrangements (Albania: the trade and 
cooperation agreement of 1992, the Former Yugoslav Republic of Macedonia: 
cooperation agreement initialled in June this year, Belarus, Moldavia, Ukraine: 
partnership and cooperation agreements) or have no agreement at all with the European 
Community (Bosnia and Herzegovina, Croatia). The European Community thus has 
multifarious contractual relations with the CEI countries. The Central European 
countries receive assistance under the PHARE programme while countries belonging to 
the Commonwealth of Independent States are eligible for TACIS assistance. Some of the 
countries formerly part of Yugoslavia receive special funding. 
The Central European Initiative is a broad-based regional cooperation instrument 
covering the political, cultural and economic fields. Its activities embrace a variety of 
sectors (see annex). In the consultation structures, political and institutional aspects are 
intertwined with issues of a more economic and operational nature. The European Bank 
for Reconstruction and Development (EBRD) provides a secretariat for the projects. So 
in the space of a few years the CEI has created a complex regional cooperation structure 
and put in place arrangements to implement practical operations on the basis of serious 
proposals in fields such as agriculture, fisheries, forestry, trade, tourism, social and 
community services, construction, energy, extractive industries, finance, industry, 
telecommunications, transport and storage. 
5. The European Community has no permanent institutional relations with the 
Central European Initiative. The Commission is invited to take part in meetings that deal 
with a Community area of competence. A number of regional cooperation projects 
supported by the Community budget have a purpose akin to those drawn up by CEI 
working groups. 
6. Each year the Central European Initiative holds a summit of heads of 
government. At the last summit, which took place under the Austrian presidency at 
Graz on 8-9 November 1996, the heads of government authorised the troika of the 
Central European Initiative to establish contacts as appropriate with the Federal 
Republic of Yugoslavia with a view to participating in the Initiative, as one of the 
successor States of the Socialist Federal Republic of Yugoslavia. The Commission 
welcomes this decision which strengthens stability in the region and corresponds with 
the regional approach that the Union is developing based on specific conditions. 
7. The Commission considers the CEI a useful framework to: 
- foster good-neighbourly relations, 
- encourage political stability, 
- strengthen human rights and democracy, in the social field among others, 
- boost economic and trade co-operation. 
GUIDING PRINCIPLES FOR ACTION 
8. The Central European Initiative encompasses a large number of countries spread 
over a sizeable area of the European continent with around 200 million inhabitants. As 
the CEI cannot involve the whole population in each project it is not necessary for all 
member countries to be involved in each type of activity. These sub-regional measures 
should, however, be approved by the CEI through its customary decision-making 
machinery. The Commission favours cross-border co-operation schemes and wants 
special attention to be paid to projects submitted by operators on the ground. 
9. In the geographical area covered by the Central European Initiative, the 
Community budget is already supporting regional projects through the structural funds, 
multidisciplinary and multi-country funds under the PHARE and TACIS programmes. 
Co-operation between the European Community and the CEI can therefore be built up 
using existing means and instruments. The development of this co-operation should not 
affect Community actions and initiatives which are already underway in the area and 
should avoid the duplication of effort. 
10. With a view to ensuring that the projects put forward are of the highest calibre, 
any Community funding should supplement the project promoters' own resources. The 
CEI's operational secretariat (provided by the EBRD) can play an important role in 
putting together the financial arrangements and ensuring the sustainability of the projects. 
FIELDS OF ACTIVITY 
11. Certain fields seem to be especially interesting, in particular those concerning 
activities designed to: 
bolster democracy and stability in the region, 
foster economic development and free trade, 
underpin the development of the trans-European networks, 
promote links between economic operators, in particular SMEs and their 
representative professional bodies, 
guarantee individual and collective rights in the social field and the rights of 
consumers, 
ease cooperation in the field of justice and home affairs, 
extend cross-border cooperation, in particular between local and regional 
institutions in the different countries. 
12. Support for democracy and stability in the region and the protection of human 
rights are essential facets of Community action and the EU's objective should be to 
strengthen them in this region. Protection of minorities, their economic and social 
integration, the development of civil society through support for NGOs and their regional 
and sub-regional groupings, the establishment of direct contact between public and 
private institutions and dialogue between different levels of the administration in several 
countries are examples of the kind of policy guidelines the Union could promote. 
13. The Commission believes that more trade between the countries of the region will 
foster economic integration and benefit each individual country, the region as a whole 
and the European Union itself. Trade between Central European countries in transition 
fell at an annual average rate of over 20% between 1990 and 1993. This trend now seems 
to have been reversed, also with the countries of the Commonwealth of Independent 
States, and there are signs of a resumption of trade relations between countries of the 
region. Trade has been expanding at over 30% per annum since 1994 in the case of some 
CEI countries. The positive effects of the economic transition under way in those 
countries are starting to make themselves felt with renewed growth in several CEI 
member countries and the resultant upsurge in foreign trade. 
14. The trans-European networks are developing in Central Europe. They require 
close cooperation between different partners and are a key factor in strengthening 
regional cooperation and fostering the development of the related infrastructure. Given 
the scale of funding needed to implement projects forming part of the networks, an input 
from the international financial institutions (IFI) and the private sector is necessary. The 
Central European Initiative is an important consultation instrument for promoting projects 
that make up those networks with the support of other partners, first and foremost the 
IFIs. Protection of the environment is a priority both for the EU and CEI. The regional 
dimension of these activities is important, as it promotes cross-border cooperation on 
schemes of common interest. 
15. If growth is to be sustained in the long term it needs to be nurtured by concerted 
action on the part of the authorities - via their economic policy - and by the private 
sector. A dynamic economy requires, in particular, a sound and active small-business 
sector. If SMEs are to create jobs and add value they need a stable economic and legal 
environment plus the support of the administration and their own representative 
professional bodies. The Commission favours the enactment of economic legislation that 
is consistent from one CEI country to the next, thus making it easy for businesses to set 
up and expand and cooperate with each other, affording SMEs access to a banking 
system geared to their needs, encouraging the dissemination of economic, legal and 
commercial information and developing commercial links, cross-border partnerships and 
SME representation. . 
16. The CEI countries are at different stages of economic and social development. By 
availing themselves of cooperation schemes designed to strengthen the role of law and 
social protection they could exchange experience thereby promoting democratization and 
cohesion in their different societies. 
17. Justice and home affairs is an area in which States tend to be reluctant to 
cooperate among each other as they concern areas of national jurisdiction. The relevant 
experience acquired by the European Union could, however, be useful for the Central 
European Initiative countries and promote the emergence of regional cooperation. The 
Commission believes that the exchange of information and experience on border control, 
drugs trafficking and organized crime is effective and will keep a watchful eye on 
developments in this field which will be taken into account in framing cooperation 
programmes for these countries and in the context of the structured dialogue. 
18. Regional cooperation should not be the sole preserve of the central authorities of 
the participating countries but should involve all decision-making levels within each 
State. The benefits of such cooperation will be enhanced if regional and local 
administrations are closely involved in drawing up projects. Special attention should be 
paid to cross-border cooperation with a view to fostering closer relations between 
communities separated by frontiers and contacts between individuals in the same region. 
By easing trade and contacts, by making frontiers easier to cross, by making rules and 
procedures more transparent and by helping to extend cross-border infrastructure, the 
Central European Initiative will promote sub-regional cooperation involving different 
players in the areas concerned. The Commission believes that Community action can 
only be effective if the CEI can involve the largest possible number of players in its 
machinery and in its projects. 
INSTRUMENTS 
19. Community financing comes chiefly from the PHARE and TACIS programmes, 
in particular the horizontal, cross-border and multi-country programmes. Over and above 
the funds earmarked for each country under PHARE, TACIS and "Cooperation with 
former Yugoslavia", the countries eligible for these programmes can thus benefit from 
significant resources which can be complemented by funding from sectoral Community 
programmes such as SYNERGY. 
As two EU Member States are members of the Central European Initiative, the structural 
funds, notably the INTERREG programme, cofinance cross-frontier programmes with 
PHARE. They could participate in transnational cooperation programmes, for instance 
under the new INTERREG IIC initiative on regional planning. These operations would 
be instrumental in supporting cooperation schemes between CEI regions as part of an 
overall plan that the CEI could draw up. The new PHARE programme, CREDO, will 
finance cross-border projects put forward by Central European countries in regions 
bordering on another Central European country or a member of the Commonwealth of 
Independent States. The European Community thus has instruments capable of supporting 
the various projects drawn up by the CEI. 
CONCLUSIONS 
20. The Commission seeks to promote regional co-operation as a means to strengthen 
security and stability and to promote economic growth and development. Good 
neighbourly relations form an essential part of the wider process of European integration. 
The Commission is ready to support projects developed in the framework of the Central 
European Initiative through complementary action under the EU's own financial 
instruments, notably PHARE, TACIS and INTERREG. The development of such co­
operation will provide an opportunity for economic operators in all member states, if 
they so wish, to participate fully in the co-operation projects undertaken through 
Community programmes and instruments in the framework of the envisaged action. It is 
up to the countries participating in the CEI to take the lead by developing concrete forms 
of co-operation, which could benefit from complementary support by the European 
Union. By acting together, the CEI and the EU can avoid the duplication of effort and 
achieve real added value, which should contribute to the overall transition process in the 
region. 
Annex 
The Central European Initiative in a nutshell 
Constituent instrument Prime Minister's decision, Vienna, 17 and 
18 July 1992 
Main bodies 
Participating states 
Additional remarks Committees at the level of Prime Ministers (summits) 
or ministers (in particular foreign ministers) and at 
technical levels (including national project 
coordinators); a permanent secretariat for the projects 
is provided by the EBRD. Working groups meet 
regularly in a number of fields (agriculture, culture, 
civil defence, energy, the environment, information 
and the media, migration, minorities, small 
businesses, rehabilitation of Bosnia and Herzegovina, 
science and technology, statistics, 
telecommunications, tourism and transport). Some 
working groups may be divided into sub-groups 
(project or sectoral groups). 
Albania, Former Yugoslav Republic of Macedonia, 
Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, 
Hungary, Moldova (admitted in November 1996), 
Poland, the Czech Republic, Romania, Slovakia, 
Slovenia, Ukraine; from the EU: Austria and Italy, 
with the German State of Bavaria taking part in the 
working groups' activities as an observer. 
Italy actively supported the setting up of the 
"Quadragonale" in November 1989 with Hungary, 
Austria and Yugoslavia. Extended on several 
occasions, and in the wake of the war in former 
Yugoslavia, the "Quadragonale" gave birth to the 
Central European Initiative in 1992. Austria has been 
in the chair in 1996. The Commission is regularly 
invited to meetings. 
Following recent meetings, the system of working 
groups should be gradually altered to take the form of 
project-oriented sessions. The Central European 
Initiative should assign its label to concrete projects 
embracing at least three participating countries. These 
reforms should help maintain only those minimum 
structures necessary to achieve the objextives and 
ensure continued flexibility in the working methods of 
this regional cooperation forum. 


ISSN 0254-1475 
COM(96) 601 final 
DOCUMENTS 
EN 11 
Catalogue number : CB-CO-96-595-EN-C 
ISBN 92-78-11693-9 
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