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•6 *** 
•rV COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 03.04.1996 
COM(96) 149 final 
COMMUNICATION FROM THE COMMISSION TO THE 
EUROPEAN PARLIAMENT AND THE COUNCIL 
CONCERNING THE EURO-MEDITERRANEAN PARTNERSHIP IN THE 
ENERGY SECTOR 

COMMUNICATION FROM THE COMMISSION TO THE 
EUROPEAN PARLIAMENT AND THE COUNCIL 
CONCERNING THE EURO-MEDITERRANEAN PARTNERSHIP IN THE 
ENERGY SECTOR 
1. GENERAL BACKGROUND 
1. The Euro-Mediterranean Conference in Barcelona on 27 and 28 November 1995 
marked the start of a new partnership to establish a haven of peace and stability 
and an economic area based on free trade and closer economic and financial 
cooperation. The political, economic and social principles which will guide 
relations between the European Union and its Mediterranean partners are set out 
in the Barcelona Declaration adopted at the Conference.(1) 
In this general context, the objectives set for this economic and financial 
partnership were: 
to accelerate the pace of sustainable socio-economic development; 
to improve the living conditions of the populations, increase the 
employment level and reduce the development gap in the Mediterranean 
region; 
to encourage regional cooperation and integration. 
2. The pivotal role played by the energy sector was acknowledged. It was therefore 
decided to strengthen cooperation and intensify the dialogue in the field of energy 
policies and to help to create the appropriate framework conditions for 
investments and the activities of energy companies. 
This general framework must meet the mutual interests of all the parties The 
cooperation in the energy field must, therefore, fit into this framework although, 
in itself, it meets these mutual interests in that, by contributing to the 
Community's security of supply and to meeting the Mediterranean partners' socio­
economic development needs, it is in the interest of the entire region; in 
particular, it encourages investment in measures to manage energy consumption 
and production and contributes to sustainable development since energy has a 
decisive influence on the fundamental parameters for economic and social 
cohesion, namely economic activity, the environment and the standard of living. 
But these mutual interests in the energy field extend beyond the strictly 
Mediterranean region. In particular, this region is an important transit route for 
energy products and, as such, also contributes to the Community's security of 
in Algeria, Cypms, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Palestinian Authority, Syria, 
Tunisia and Turkey. 
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supply. Consequently, the political, economic and social stability of this region 
is also essential to safeguard this transit route. 
One consequence of this strategic function is that cooperation with the 
Mediterranean countries in the energy field will not be possible without also 
taking account of the interests of the regions beyond and of the cooperation with 
these regions which could be affected or, in any event, concerned by the 
cooperation with the Mediterranean countries. These include the Gulf countries 
and the Black Sea and Caspian Sea countries. As the Community is heavily 
committed to a policy of cooperation with the countries and organizations in these 
regions, it will have to ensure balanced development of this cooperation and keep 
each of the parties satisfactorily informed. 
Parallel to the Barcelona Conference, a Euro-Mediterranean Civil Forum was also 
held. This event demonstrated, once again, the close link between energy issues 
and their impact on economic and social development in the countries concerned. 
This same commitment on the part of the civil sector to the Euro-Mediterranean 
partnership was expressed at the Conference on the importance of energy for 
social development, held in Madrid on 22-23 February 1996 by the International 
Federation of Trade Unions of Workers in the Chemical, Energy, Mining and 
Miscellaneous Industries, i.e. the Euro-Mediterranean trade unions. 
The efforts to develop a consistent policy on energy cooperation with the 
Mediterranean countries must also fit in with the energy policy established for the 
Community, as outlined in the Commission White Paper,(2) based on common 
objectives and mobilizing all the Community instruments: 
The Community's energy policy, based on integration of the energy 
markets and of the infrastructure for transporting energy products, must 
provide consumers with greater security of supply in the Community, by 
stepping up the cooperation with the supplier countries, and at the same 
time support energy companies in the Union in their strategy on 
investment and transfer of technologies in the countries in the region. 
The measures taken to implement the energy policy must mobilize all the 
Community instruments, particularly those for economic cooperation, 
research and development policy and the financial instruments for general 
or regional purposes. 
(2) Communication of 14 December 1995 from the Commission on an energy policy for the European 
Union (COM(95) 682). 
2. THE ENERGY CONTEXT 
6. The distinctive features of the energy context in the region are its substantial 
energy resources, in the form of the oil and gas fields closest to the Community 
market apart from the North Sea resources, plus the potential increase in energy 
consumption, which poses both economic and environmental challenges.(3) 
(i) Energy potential in the region 
7. The region's reserves are amongst the largest in the world, but it has not been 
possible to harness them fully, principally due to the economic and political 
context in the producing countries in the region. Euro-Mediterranean cooperation 
in the energy sector is designed to create the conditions to remedy this. 
Crude oil reserves in the region were estimated at 6 030 million tonnes in 
1993; Algeria, Egypt, Syria and Tunisia are the Euro-Mediterranean 
partners concerned; Libya alone holds 50% of the reserves. 
The proven natural gas reserves are of the same order of magnitude at 
5 650 billion m3 (5 085 million toe). They are located in the same regions 
as the oil reserves. Algeria is the leading natural gas producer with 64% 
of the reserves, followed by Libya, Egypt, Syria and Tunisia. 
According to some experts, the undiscovered reserves could total over 
3. 300 million tonnes of oil and condensates and 3 400 billion m3 of natural gas. 
A big effort could therefore be made on oil and gas prospecting. 
8. The existing infrastructure has the capacity for annual exports of 162 million 
tonnes of oil and 37 billion m3 of natural gas. A substantial proportion of 
Algeria's natural gas exports to the European Community take the form of LNG. 
The principal destination is the European Union market, which takes 
92 million tonnes of oil and oil products and 35 billion m3 of natural gas. 
The Mediterranean oil producers supply approximately a quarter of the 
European Union's requirements. As the oil pipelines are developed, they 
will also become an important transit route. 
As for natural gas, the European Community imports 10% of its 
requirements from the Mediterranean partners, principally Algeria, which 
also supplies almost all the LNG imported into the Community. Despite 
the gas transmission infrastructure developed within the Community, the 
Community will become more dependent on outside gas supplies as 
consumption grows. Consequently, with the development of link-ups 
(3) Taken partly from the Commission staff working papes entitled "European Energy to 2020: A 
Scenario Approach", December 1995 (SEC(95)2283), 
within the Community, production from the Mediterranean countries must 
improve security of supply within the Community. 
The wide disparities in energy resources between the Mediterranean partners 
should lead to link-ups for gas, oil and electricity transmission. 
9. The Cairo Conference in September 1995 estimated the investment needed in 
energy production, transmission and distribution infrastructure over the next 25 
years at ECU 192 300 million. This would be equivalent to 12% of the 
Mediterranean partners' GDP over the same period. 
The availability of fossil fuel resources in this region must not overshadow the 
potential offered by renewable energy sources. 
In the Southern and Eastern Mediterranean countries renewable energy sources 
account for 9.5% of the primary energy balance. Solar energy and wind power 
offer the greatest potential. Biomass also shows considerable potential, but it is 
difficult to estimate. 
(ii) Demand growth prospects 
10. Population growth prospects are high in the Mediterranean partners' societies, 
although they differ from one country to another: by 2020 the population is 
expected to grow from 200 million today to 340 million. This population will be 
concentrated principally in urban areas, leading to serious environmental 
problems: waste, air pollution, lack of drinking water, etc. In response, the 
countries primarily concerned should create 2.4 million jobs every year for the 
next 15 years, whereas at the moment they are creating just 1.7 million, without 
taking account of the increasing number of female workers entering the labour 
market. This demographic situation alone will affect consumption growth and, 
consequently, the environmental risks. 
11. (a) In most of the Mediterranean partners, per capita energy consumption is 
extremely low (0.9 toe compared with 3.0 in the Northern Mediterranean 
Community Member States). Levels such as this are incompatible with the 
economic development which the Euro-Mediterranean partnership wishes 
to promote. On current trends, demand for energy, particularly for 
transport and electricity generation, could rise from 155 million toe in 
1992 to around 458 million toe by 2020. This could imply strong growth 
in oil production in order to finance economic development. 
Demand for electricity could rise by 5% per year over the same period 
(compared with just 1% in the Community) to 920 TWh by 2020 
compared with 194 TWh today. However, allowing for the population 
growth, per capita consumption is likely to remain relatively low (2650 
kWh) compared with the current level in the Community (6000 kWh). 
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12. (b) This growing energy consumption immediately gives cause for concern 
about the environmental risks which, in the Mediterranean region, include 
the added risk of pollution of a virtually landlocked sea which, above all, 
is shared by all the countries in this partnership. 
In a "business as usual" scenario C02 emissions in the Community 
are expected to rise from 3150 million tonnes in 1990 to 3721 
million tonnes in 2020, i.e. by around 18%.(4) In the Mediterranean 
partners, they could triple from 287 million tonnes in 1990 to 929 
million tonnes in 2020. 
As a transit route for energy products, particularly for tankers, with 
big cities and industrial complexes developing along its coasts, the 
Mediterranean region is particularly exposed to the risk of pollution 
caused by the transport and use of energy products. Every year oil 
tankers spill 650 000 tonnes of oil into the Mediterranean Sea. The 
rivers too are highly contaminated and the principal deltas are 
fragile. 
The Mediterranean partners suffer the biggest water shortages in 
the world: 60% of their renewable aquifers are overexploited and 
on course to run dry in the medium term. Besides drastic 
environmental measures to protect fresh water, energy is the only 
answer to the need for desalination of sea water. 
The growing consumption cannot be satisfied by fossil fuels alone. 
In the Mediterranean countries renewable energy sources will also 
contribute to solving this problem and, more generally, the 
environmental protection problems created by energy production 
and consumption. 
3. ACTION PROGRAMME 
13. Given the strategic importance of the energy sector and the pivotal function of 
cooperation in this field, the Barcelona Conference was preceded by a series of 
preparatory events to mobilize the Community institutions, industry and 
Mediterranean partners: 
At the Council meeting on energy on 1 June 1995, the Presidency asked 
the Commission to "assign appropriate financial resources to the objectives 
identified, within the framework of the financial resources to be allocated 
W C02 emissions are covered by the Convention on Climate Change, which was ratified in December 
1993. An international protocol is being prepared with a view to further reductions beyond the year 
2000. The Community in turn has adopted a strategy to stabilize emissions at 1990 levels by 2000 
by the European Community to its framework programme for partnership 
with the countries of the Southern and Eastern Mediterranean." 
At a meeting in Athens on 6 and 7 July 1995, the European Commission 
and the Mediterranean partners concluded that it was necessary to define 
a Euro-Mediterranean action plan in the energy sector and to establish a 
forum to monitor it. 
At their meeting with the Economic and Social Committee of the 
European Communities on 19 October 1995, the representatives of the 
Southern and Eastern Mediterranean states recommended that the energy 
sector should be one of the specific fields for Euro-Mediterranean 
cooperation. 
At a meeting in Madrid on 20 November 1995, the energy ministers from 
Spain, France and Italy and representatives of the Mediterranean partners, 
of certain European Union Member States and of the European 
Commission declared that in order to promote energy projects, appropriate 
instruments should be introduced. The introduction of a specific chapter 
on energy in the MEDA Programme would demonstrate the importance 
which Europe attaches to the energy sector in the Mediterranean region. 
14. In this context, the SYNERGY programme has allowed a start to be made on pilot 
cooperation projects over the last three years. Some of these lay the foundation 
for the general action to be taken on energy in the Euro-Mediterranean 
partnership: 
The action plan on energy and the urban environment in the Mediterranean 
region which emerged from the Athens Conference in November 1993 
established cooperation with Southern Mediterranean cities on energy 
management and environmental protection. 
The Palestinian Energy Centre set up on 28 December 1993 by decision 
of President Arafat has been receiving financial support and technical 
assistance since then under the SYNERGY programme. The Palestinian 
Energy Centre assists the Palestinian Authority on energy and 
environmental issues, particularly on drafting a legal framework, planning, 
coordination and monitoring of projects. 
The Tunis Conference in March 1995 brought together representatives of 
the non-European Union Mediterranean countries to evaluate the energy 
situation in the region and suggest subjects and priorities for regional 
cooperation. 
The Cairo Conference held in September 1995, in conjunction with the 
World Bank and the Mediterranean Energy Observatory, raised the 
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problem of funding energy projects in the region and proposed greater 
mobilization of savings to this end. 
15. The JOULE-THERMIE programme has also allowed closer industrial cooperation 
with the Mediterranean partners, in most cases with local support: the Madrid 
(1995) and Athens (1996) Conferences on renewable energy sources in this region, 
funded by the THERMIE programme, made recommendations on faster 
dissemination of renewable energy sources. 
3.1 Fields of cooperation 
16. The economic partnership objectives set by the Barcelona Declaration adopted at 
the Conference provide for participation in: 
assisting with the economic transition (establishment of a free trade area, 
encouragement of the private sector and of private investment by Europe 
and upgrading of economic infrastructure); 
helping to achieve a better socio-economic balance (by improving social 
services, promoting harmonious, integrated rural development and 
environmental protection); 
supporting regional and transfrontier cooperation. 
17. These three objectives call for closer cooperation in the following fields: 
(i) On energy policy, with a view in particular: 
to establish a regional forum for developing consistent energy 
policies. To this end, more regular meetings must be organized 
between institutions and experts from the European Union and the 
Mediterranean partners, within a more structured framework; 
to develop energy planning tools based on the highly 
complementary nature of the Northern and Southern Mediterranean 
markets and supply networks; 
to increase trade in energy products. An appropriate legal 
framework should be devised to encourage and promote regional 
and transregional trade; 
to provide greater security for private investment in energy 
resources and networks to create a climate conducive to removing 
the obstacles to investment, in order to stimulate private investment 
and to modernize and restructure the industry and the existing 
infrastructure and to promote renewable energy sources under 
satisfactory economic conditions; 
jointly to combat the greenhouse effect and climate change by 
stabilizing emissions at regional level. 
18. (ii) On infrastructure and networks, with a view, in particular, to developing 
and linking up the energy networks in the various regions around the 
Mediterranean. 
The action being taken by the Community on major gas and electricity 
transmission infrastructure, after identifying projects of common interest, 
must in turn make investments in the Mediterranean partners more secure, 
from the economic point of view. Not only do gas supplies depend on the 
availability of transmission networks in these countries, but also the 
efficiency of the electricity grids in the Mediterranean region depends on 
good interconnection and, in the long term, the establishment of a network 
around the Mediterranean allowing good use of generating capacity. 
19. Once such link-ups have been recognized as in the Community's common 
interest, they can be eligible for the Community funding provided for by 
the Regulation on financial aid in the field of trans-European networks, 
particularly in the form of joint funding for feasibility studies on energy 
projects.(5) Based on the decision expected from Parliament and the 
Council on the Community guidelines on trans-European energy networks, 
the Commission will propose to the Council that the 12 partners 
participating in the Barcelona Conference recognize these projects as in 
their mutual interest, within the framework of the partnership agreements. 
In general, it is important to coordinate the Euro-Mediterranean activities 
and the assistance instruments already established by the TACIS 
programme for the Central Asian countries. 
The Community has identified a series of trans-European energy network 
projects which it considers to be of common interest/6* 
20. Several of the projects of common interest identified concern the 
Mediterranean region and are designed to establish or upgrade the 
electricity and gas interconnections between the European Union and the 
Mediterranean partners, namely: 
electricity networks: Spain-Morocco; Greece-Turkey; 
(5) Council Regulation (EC) No 2236/95 of 18 September 1995 (OJ No L 228, 23.9.1995). 
(6) Council common position of 29 June 1995 and European Parliament opinion of 26 October 1995 
at second reading on the proposal for a European Parliament and Council Decision laying down 
a series of guidelines on trans-European energy networks (COM(93)685). 
8 
gas networks: Algeria-Spain-Portugal-Francc; 
Algeria-Tunisia-Italy. 
Depending on energy demand trends in the Union and its Mediterranean 
partners and on the pace of development and location of natural gas and 
electricity production, other projects concerning the Mediterranean region 
could be ready within the next few years(7): 
electricity networks: Italy-Tunisia; Morocco-Algeria-Tunisia; 
Turkey-Syria; 
gas networks: upgrading of existing gas pipelines; 
gas pipeline from the Libyan gasfields; 
gas transmission pipeline from Central 
Asia/Iran via Turkey. 
21. The Mediterranean countries have also started a number of projects which 
will improve gas and electricity supplies: 
electricity networks: Morocco-Algeria-Tunisia-Libya; Libya-
Egypt; Egypt-Jordan; Jordan-Syria-Turkey; 
Egypt-Israel -Palesti ni an Authority-Jordan. 
gas networks: Morocco, Algeria, Egypt-neighbouring 
countries. 
The networks connecting the Member States and the partner countries will 
have to satisfy the existing Community standards on environmental impact 
assessments. A similar approach is also recommended for projects 
confined to the partner countries alone. 
22. (iii) On industrial cooperation and RTD with a view, in particular, to 
promoting RTD and investment with the aid of partnerships on renewable 
energy sources and energy efficiency, water treatment and management, 
oil prospecting, production, refining and distribution, and electricity 
generation, transmission and distribution: 
the funding required to develop electricity capacity is one of the 
most important aspects of cooperation between the two regions, 
particularly in view of the need for technology transfers, notably 
(7) Iran and Libya do not benefit from any Community financing neither can be eligible under the 
MEDA programme. 
for environmentally sustainable use of coal and to reinforce 
production and transmission infrastructure; 
closer cooperation on energy RTD is one of the key areas for 
scientific and technical cooperation with the Mediterranean 
countries and, hence, is being examined carefully by the 
Monitoring Committee set up to reinforce the Mediterranean 
partnership policy in the research field. At its meeting on research 
on 25 March 1996 the Council stressed the importance of this 
policy and, in this context, of the role of the Monitoring 
Committee. Energy RTD can be undertaken under existing 
programmes such as JOULE-THERMIE (non-nuclear energy) and 
INCO (cooperation with non-member countries). The THERMIE 
programme, in particular, provides a means of disseminating 
technologies, on the initiative of bodies or industries in the 
Member States or associated States; 
cooperation in the field of standardization should facilitate 
investment in link-ups and, as in the Community, in renewable 
energy sources. In 1990, with the support of the European 
Community, the European Committee for Standardization (CEN) 
established a unit with the dual role of supplying third countries 
with the information which they need on European standardization 
and providing support on standardization to the countries which 
wish it. Tunisia, Malta and Israel have already availed themselves 
of the services of this unit. At the same time as encouraging 
standardization work on energy efficiency and renewable sources 
to implement the White Paper on energy policy, the Commission 
will examine ways of extending the unit's activities to these two 
fields as well. 
3.2 Security of investment 
23. Given the microeconomic and macroeconomic constraints on undertakings and on 
the Southern and Eastern Mediterranean States, increasingly the funding 
requirements will have to be covered by calling on private investment. This 
presupposes projects profitable enough to attract local or international private 
investors on the one hand and a general framework providing sufficient protection 
against the risks on the other. 
24. Energy-related investments are often strategic and determine economic and social 
development, particularly if they are intended to meet local requirements. It is 
therefore necessary to create a favourable environment in order to promote such 
investment by starting or continuing reforms of the Mediterranean partners' energy 
industries. This should improve operation of the markets and provide the 
possibility to generate investment capacity in the long term. However, most of 
these countries find it difficult to satisfy this trend and numerous disparities 
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remain between them. This calls for a specific approach, drawing on various 
instruments and different from those followed in other parts of the world. 
25. The major obstacles militating against funding energy projects in this region are 
generally considered to be: 
the absence of a sufficiently detailed institutional framework; 
the political risks; 
the exchange rate risks; 
the difficulty of drawing on local savings; 
the complexity of organizing projects. 
26. Today's arrangements on technical cooperation, exchanges of know-how and 
supply agreements between the leading undertakings from the Mediterranean 
partners raise numerous difficulties for operating in a climate of true cooperation 
and joint investment. Uniform regulatory and contractual conditions must 
therefore be defined to encourage investments by foreign firms. The 
Mediterranean partners must not only open up their markets but also adopt rules 
which are as uniform as possible so that undertakings do not have to adapt to 
different regulatory frameworks in each country. 
(i) European Energy Charter 
27. Association of Mediterranean countries with the Treaty on the European Energy 
Charter is mentioned in the work programme adopted at the Barcelona Conference 
as one of the means of creating appropriate conditions for investment in and 
activities by energy companies. 
The objective of the Charter Treaty is to promote access to resources, trade and 
investment in the energy sector. It contributes to security of production and 
supply and pays particular attention to environmental protection, notably in the 
form of the Protocol on energy efficiency. 
For private investors, the Treaty offers a stable, non-discriminatory legal 
framework removing the obstacles to investment, facilitating negotiations and 
opening up new prospects. Certainty that the signatory countries will honour their 
commitments to foreign investors is provided in the form of acceptance of 
international arbitration in the event of any dispute. This will make the energy 
industries more competitive in attracting investment. 
28. Consequently, the Charter would provide a satisfactory response to any investment 
risks. However, the Commission considers that certain precautions must be taken 
before proposing that the Mediterranean partners which have not yet signed the 
Treaty do so:(8) 
(K) Cyprus, Malta and Turkey are the Mediterranean partners which have signed the Charter Treaty 
the Charter Treaty was designed for a specifically pan-European situation, 
tailored to the eastern European countries' economies in transition and to 
the role played by most Central and Eastern European countries as transit 
routes for gas and oil on its way to the consumer countries. However, 
most of the Mediterranean partners are not yet in the situation of energy 
interdependence found in Europe; 
transit of energy products was one of the key issues dealt with carefully 
during the negotiations on the Charter Treaty and is one of the 
fundamental components of the Treaty. But in the Mediterranean region 
this transit role is limited by the underdevelopment of the networks; 
the Treaty was negotiated in response to the lack of a framework for 
cooperation and of rules on trade and establishment; the Association 
Agreements which the Community is concluding in the 
Euro-Mediterranean region will answer this concern; moreover, some of 
the Mediterranean partners are participating in the World Trade 
Organization/9* Under these circumstances, their accession to the Charter 
Treaty would make little difference to the existing legal environment. 
29. Despite this, it nevertheless seems less efficient to add more frameworks for 
cooperation, all the more so bearing in mind that some of the Mediterranean 
partners have signed the Charter Treaty. However, enlargement of the Charter 
Conference would be sure to affect the efficiency of this body, which started 
operation this year. For this reason, the Community should opt instead for a 
gradual approach using the flexibility allowed by the Treaty to start with observer 
status and then progress to associated membership and, finally, full membership. 
Observer status makes it possible, for example, to keep oil and natural gas 
exporting countries fully informed of the content of the agreements 
negotiated between the signatories on the subjects of importance to them. 
Non-signatories can also participate actively in the meetings of the 
Conference and its subsidiary bodies as non-voting observers, on payment 
of a contribution. 
Associated member status allows the countries and international 
organizations concerned to participate and implement certain provisions of 
the Treaty, after negotiating with the Charter Conference the extent and 
degree to which they wish to participate. As with observer status, the 
Treaty contains no provisions which explicitly place an obligation on the 
associated countries to sign the Charter. The content of the Association 
(9) Algeria, Morocco and Tunisia have been invited to sit in as observers on all the work of the 
Conference. 
Cyprus, Israel, Malta, Morocco, Tunisia and Turkey. 
12 
Agreement should be defined during the negotiations and approved 
unanimously by the Conference. 
By contrast, signature of the Charter is a prerequisite before accession to 
the Treaty. The conditions for accession must be approved unanimously. 
30 The Commission should therefore support consultations with the Mediterranean 
partners on their eventual participation in the work of the Charter Conference if 
they are not yet members thereof This move should be prepared with all 
concerned, primarily with the members of the Charter Conference. 
In due course, the experience built up with implementation of the Charter and of 
the associated Treaty and the analyses by the Mediterranean countries of the 
characteristics of the Charter and of the means used in it to attain the objectives 
could prompt these countries to join as associated members or full members, 
depending on their individual interests. 
The Mediterranean partners' attitude on accession to the Treaty depends, primarily, 
on their choice. They will not be able to make this until they know the benefits 
which the Charter can bring them. Together with the Charter Secretariat, the 
Commission will organize a briefing session for the Mediterranean partners and 
industrial circles concerned. 
(ii) Analysis of potential options to facilitate investment 
31. Clearly, establishment of a stable legal environment encouraging market forces 
must be a priority in order to encourage investment growth. However, certain 
partners' economic and political situation offers no prospect of rapid, substantial 
progress on this point in the short term. 
The Commission will study the options already available or which should be 
developed to facilitate investment in the Mediterranean partners. This study will 
include an assessment of the risks and uncertainties which limit investment at the 
moment, the financing methods available and ways of providing better cover for 
investment risks. It should identify the best means of safeguarding this type of 
investment specifically in the energy sector while meeting the objectives of the 
Euro-Mediterranean cooperation. 
3.3 Organization of the cooperation 
32. The Euro-Mediterranean cooperation must be organized securely and efficiently 
so that common interests can be taken into account. The foundation must be laid 
for transfers of experience and know-how and dialogue between the Community 
and the Mediterranean partners on issues concerning energy policy and strategy, 
energy prices, training, project binding, the institutional framework and 
management of the action plans, and environmental protection. 
i3 
Two instruments will be set up to organize and monitor the cooperation: the 
Euro-Mediterranean Energy Forum and financial resources. 
(i) Euro-Mediterranean Energy Forum 
33. At their meeting in Athens on 6 and 7 July 1995 the participants accepted the 
principle of setting up a Forum for Euro-Mediterranean energy cooperation. This 
would have two principal objectives: 
to structure the cooperation between the European Community and the 
Mediterranean partners by promoting inter-administration networks on the 
one hand and data interchange and dialogue with the industry on the other, 
taking due account of the interrelation between energy and the 
environment with a view to sustainable development; 
to develop the transparent mechanisms necessary for the projects 
envisaged. 
34. Establishment of such a Forum is warranted by the fact that the framework 
created by the Barcelona Conference does not provide with a structure specifically 
for energy-related issues (transfer of know-how, exchanges of information, better 
use of oil, gas and coal, development of energy networks, improvements in energy 
efficiency, promotion of renewable energy sources and environmental protection). 
Without calling into question the general cooperation arrangements made by the 
Barcelona Conference or the bilateral agreements, the administrations concerned 
must be given a means of meeting and developing joint strategies or cooperation 
projects under the responsibility of the Ministerial Conference. 
(a) Composition and operation of the Forum 
35. The Forum is a body for political dialogue with the energy authorities at 
ministerial and/or administration level from the various partners in the Euro-
Mediterranean cooperation. Its efficiency will depend on its membership, 
consisting of representatives of the participating States who will then be 
responsible, in turn, for implementing the cooperation measures in their own 
countries and promoting projects of common interest between them. 
The Forum must operate in accordance with the guidelines issued by the 
Euro-Mediterranean Ministerial Conference. The Ministerial Conference provided 
for by the Barcelona Conference for monitoring Euro-Mediterranean cooperation 
must coordinate the activities of the Forum with the other bodies set up for 
cooperation at Euro-Mediterranean level and its powers must fit in with those 
conferred on the Euro-Mediterranean Monitoring Committee for RTD. 
36. The Commission is willing to provide every possible assistance for effective 
operation of this Forum. However, it considers that in any partnership all the 
partners must take their share of the responsibility and, accordingly, will make 
14 
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arrangements with its partners for them to participate in the Forum on acceptable 
terms. 
37. Since the energy cooperation must involve circles outside the Forum, whether 
financial institutions, undertakings or trade unions, the Forum's rules of procedure 
will have to allow these outside partners to voice their views. The Commission 
in turn will support all appropriate initiatives to facilitate collaboration by industry 
and the trade unions from the north and south of the Mediterranean in the Forum's 
work. 
(b) Tasks of the Forum 
38. The Forum's first task will be to provide all parties concerned with a permanent 
framework for dialogue and exchanges of information. In this respect, it will have 
an important role to play in ensuring better mutual understanding. 
But the Forum must also add a regional cooperation dimension to project 
development by introducing a "Euro-Mediterranean interest" label for projects 
contributing to this cooperation. The Forum could award this label on the basis 
of criteria yet to be decided. These would give priority to projects submitted 
jointly by at least two countries. Such a label would allow easier access to 
Community funding for these projects, while complying with the financial and the 
selection regulations. 
Finally, the Forum will have to draw up and publish a five-year action plan. This 
action plan will be approved by every member of the Forum. Every two years 
the Forum will draw up and publish an appraisal of implementation of the action 
plan over the two previous years. 
(ii) Financial resources 
39. Euro-Mediterranean cooperation in the energy sector must fit in with the existing 
financing arrangements. However, in order to make better use of the limited 
resources available, the Community needs to develop a flexible political and 
economic cooperation strategy in an attempt to make the Community's interests 
compatible with the interests of its Mediterranean partners. 
It is therefore essential to find appropriate financial mechanisms to attain the 
energy objectives of the partnership and to contribute towards attaining its general 
objectives. 
(a) Financial and technical support measures (MEDÂ) 
40. On several occasions during the preparatory process for the Euro-Mediterranean 
partnership, it was proposed that financial resources should be made available: 
15 
at the Council meeting on energy on 1 June 1995 the Presidency asked the 
Commission to "assign appropriate financial resources to the objectives 
identified, within the framework of the financial resources to be allocated 
by the European Community to its framework programme for partnership 
with the countries of the Southern and Eastern Mediterranean"; 
at a meeting in Madrid on 20 November 1995, the Energy Ministers from 
Spain, France and Italy and representatives of the Mediterranean partners, 
of the European Union Member States and of the European Commission 
declared that in order to promote energy projects, appropriate instruments 
should be introduced. The introduction of a specific chapter on energy in 
MEDA would demonstrate the importance which Europe attaches to the 
energy sector in the Mediterranean region. 
MEDA is designed to support the Mediterranean partners' efforts to improve their 
social and economic structures and to soften the potential social and 
environmental impact of economic development. 
41. In accordance with the objectives and procedures for MEDA, the Commission will 
facilitate measures to coordinate and deal with energy projects. In consultation 
with the Mediterranean partners, it will lay down the specific objectives of 
cooperation in this field and define the project selection criteria. It will take 
account of the Forum's role in defining the broad lines of action, while 
maintaining the specific procedures laid down in the MEDA Regulation. 
Consequently, the justification for such an approach in MEDA will depend on 
demonstrating the importance of these countries for the European Union from the 
energy point of view and the energy challenges created by the population 
problems. 
42. Without calling into question the bilateral nature of a large part of MEDA, such 
an integrated approach would create the synergies needed between the various 
bilateral types of cooperation. In this way, MEDA will develop energy measures 
going beyond simply attaining the energy policy objectives described in point 3.1 
and also contributing to other more general objectives such as environmental 
protection, political stability, social integration, peace and prosperity. 
(b) Fourth framework RTD programme 
43. The participants at the Barcelona Conference wished to promote research and 
development and tackle the problem of the widening gap in scientific 
performance, taking account of the principle of mutual benefit. To this end, the 
cooperation will focus particularly on: 
stepping up the Mediterranean countries' own research capacity and 
helping to train scientific and technical staff by increasing participation in 
joint research projects; 
16 
participation by qualified research institutes and higher education 
establishments in the European and Mediterranean countries in joint 
research projects based on the creation of scientific networks on clearly 
defined subjects. 
44. Against this background, it must be added that a large number of the specific 
programmes under the Community's fourth framework research and technological 
development programme, particularly the programmes on the environment and 
technology, health and society, renewable resources, urban development, 
information technologies and communications technologies, allow scientific and 
technological research institutions from the Mediterranean partners to participate 
on a case by case basis, without any financial contribution from the specific 
programmes concerned. 
45. The twelve Mediterranean partners can participate in the specific programme on 
non-nuclear energy and in the INCO programme, within the limits laid down by 
the programmes. 
research bodies from these countries can be associated with the projects 
submitted by European undertakings in the JOULE programme, without 
any financial contribution from the programme. This programme is thus 
an instrument for implementing projects of Euro-Mediterranean interest, 
such as the INTERSUMED project bringing together energy companies 
from throughout the Mediterranean region to integrate renewable energy 
sources in the electricity system (joint JOULE-INCO project); 
under the THERMIE programme, dissemination schemes, measures to 
promote small firms and concerted action can accompany projects on new 
energy technologies to demonstrate their industrial viability at the 
technological feasibility stage (excluding all commercial considerations). 
These activities could be carried out in these countries without them being 
entitled to participate; 
joint scientific and technical research projects and support measures on the 
use of renewable energy sources, particularly sustainable management of 
natural resources, can be funded by the INCO-DC program m e.(10) This has 
earmarked ECU 3 million to non-nuclear energy, of which 
ECU 1.34 million will be for funding non-Union countries under the 
JOULE programme; 
research on the energy and technology prospects in the Mediterranean 
region, particularly analyses of the economic, financial and environmental 
impact of energy choices, can also be undertaken in these programmes 
(10) Part of the INCO programme intended for the developing countries. 
17 
(c) SYNERGY programme 
46. The SYNERGY programme must provide a means of putting the various 
cooperation activities in a consistent framework, by helping the countries 
concerned to define a comprehensive energy policy. In the process, the 
programme must support the preparatory stages for defining projects for 
submission for MEDA funding and encourage the partners to start activities. The 
SYNERGY programme could also provide support for operation of the Forum in 
addition to the support from MEDA. The division of labour between the two 
programmes must yet be decided. 
47. SYNERGY has already funded training, planning and assistance activities with the 
Mediterranean partners and has been allocated ECU 9 million for 1996, of which 
one third should go towards funding activities with the Mediterranean partners 
If the Council were to adopt the SYNERGY programme, cooperation with these 
countries will be able to continue on a multi-annual basis, involving all the 
Member States in the activities. 
4. CONCLUSIONS 
48. On the basis of the areas of cooperation in the energy field emerging from the 
Barcelona Conference, the lines along which the Commission intends to work are: 
establishment of a Euro-Mediterranean Energy Forum allowing joint 
management of the energy cooperation, by establishing a framework for 
meetings and exchanges of information between the partners; 
initiation of consultations with the Mediterranean partners on their 
eventual participation in the work of the European Energy Charter 
Conference, if they are not already members; 
study on the options available or which should be developed to facilitate 
investment. The Commission will submit a report containing the 
appropriate proposals to the European Parliament and the Council in one 
year; 
cooperation with the countries concerned, under the partnership 
agreements, on the implementation of projects of common interest in the 
field of trans-European networks, taking account of the measures to 
combat climate change; 
facilitation of measures to coordinate and deal with energy projects, in 
accordance with the objectives and procedures for MEDA. 
18 

ISSN 0254-1475 
COM(96) 149 final 
DOCUMENTS 
EN 12 11 
Catalogue number : CB-CO-96-165-EN-C 
ISBN 92-78-02590-9 
Office for Official Publications of the European Communities 
L-2985 Luxembourg