*** * * * * * * *** COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 14.11.1997 
COM(97) 597 final 
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 
Regional co-operation in the Black Sea area: State of play, 
perspectives for EU action encouraging its further development 

Summary 
The Commission welcomes and supports increased regional co-operation among the 
Black Sea states and proposes to develop a new approach to regional co-operation 
around the Black Sea as part of a wider EU strategy for the region, taking into account 
both the common interests of the Black Sea states and EU interests in the region. The 
Commission suggests basing this approach on a mix of existing political, commercial 
and technical assistance instruments. The European Community should be prepared to 
support actions encouraging regional co-operation around the Black Sea -including at 
the sub-regional level -in particular in the fields of transport, energy and 
tel~communications networks, trade co-operation, ecologically sustainable 
development, and justice and home affairs. 
In assessing the usefulness of EC support for particular initiatives, the active 
involvement of the countries directly concerned, including through financing, should 
serve as a key criterion. Technical assistance will be provided through existing 
instruments -primarily Tacis, Phare, Meda and, where appropriate, Interreg -in 
accordance with their established procedures and on the basis of existing budget lines, 
while at the same time developing as much as possible "Black Sea synergies" among 
them. The development of such co-operation will provide an opportunity for economic 
actors in all Members States to participate fully in the agreed co-operation projects. 
In programming actions in the Black · Sea region,· the Commission's main interlocutors 
will be the Black Sea states concerned, both on a bilateral basis and in the framework 
of multi-country discussions. At the same time, BSEC -as the main regional co­
operation initiative of a general nature in the Black Sea area -can provide important 
support for this exercise. In view of the Commission's role in implementing assistance, 
it would be appropriate if the Commission, on behalf of the European Community; 
were invited to observe BSEC meetings. By encouraging regional co-operation in the 
Black Sea area, the European Union will contribute to enhancing security, stability and 
prosperity in this region which is of increasing strategic importance to the European 
Union. 
••✓, 
Regional co-operation in the Black Sea area: State of play, 
perspectives for EU action encouraging its further development 
Communication from the Commission to the Council , 
Introduction 
1. The Dublin European Council in December 1996 noted that the Commission 
would report regularly on the wide range of regional activities in Europe reaching from 
the Arctic to the Black Sea. Following earlier Commission communications on 
regional co-operation in the Baltic Sea region and in the framework of the Central 
European Initiative, the Commission has prepared the current report on regional co­
operation in the Black Sea area, which is presented alongside a general report on 
regional co-operation in Europe. 
2. The objectives of the present report are twofold: first, to describe a picture of 
the Black Sea region and its strategic importance for the European Union, drawing 
attention to the role regional co-operation can play in the region's development; 
secondly, to define priority objectives for regional co-operation in the Black Sea area 
that could usefully be promoted with EU support as well as to identify the instruments 
available to encourage such co-operation. 
3. The Commission welcomes and supports the development of regional co­
operation initiatives throughout Europe as a means to promote stability, security and 
prosperity. 
4. The Commission is keen to support those regional initiatives whose 
participants demonstrate a clear commitment to regional co-operation, notably through 
active involvement in, and the financing of, common projects. Such initiatives can also 
be assessed in terms of the political support for such co-operation, both within the 
region and within the EU, and in terms of their actual and potential achievements. The 
Commission believes, as stated in "Agenda 2000", that the importance of regional co­
operation will increase as the Union enlarges, as its development will promote the 
openness of the enlarged Union towards its neighbours, so that no dividing Jines are 
drawn on the European continent; it will also serve to meet the objective of 
participating non-EU countries which is to have ever closer relations with the Union. 
5: The Black Sea region, 1 which encompasses Greece, Bulgaria, Romania and 
Moldova in the West; Ukraine and Russia2 in the North; Georgia, Armenia and 
Azerbaijan in the East; and Turkey in the South constitutes an area of increasing 
strategic importance for the European Union, which will be further reinforced by 
enlargement. With a total population of 190 million3
, the region provides a potentially 
important market for EU goods. Furthermore, it is a vital transit route for energy 
resources to Europe. 
6. Increased regional co-operation among the Black Sea states makes an 
important contribution to efforts to bolster peace, security and political stability in this 
region; to consolidate and enhance the region's role as a vital trade link between 
Europe, Central Asia and the Middle East; and to develop its economic potential. The 
European Union's approach to closer co-operation among the Black Sea states takes 
into account the common interests of the Black Sea states and of the European Union 
in the region. It should be based on a mix of existing political. commercial and 
technical assistance instruments. 
7. Compared to other regional initiatives that have emerged throughout Europe 
since the early l 990s -notably Baltic Sea co-operation, Barents Euro-Arctic co­
operation, and the Central European Initiative -regional co-operation among the Black 
Sea states has been somewhat slow to take shape, but its impact is now increasing. 
Black Sea Economic Co-operation (BSEC) 
8. The main regional co-operation initiative of a general nature in the area is 
Black Sea Economic Co-operation (BSEC), launched in 1992. Members of this body 
include the Black Sea littoral states (Bulgaria, Georgia, Romania, Russia, Turkey and 
1 A map of the region is at Annex I. 
2 In the case of Russia, only the oblasts adjacent to the Black Sea (Rostov, Krasnodar and Stavropol) 
arc considered part of the Black Sea region. 
'This figure includes the population of the three oblasts of the Russian Federation adjacent to the 
Black Sca--i.c. Rostov. Krasnodar. and Stavropol. which jointly have a total population of 12 million 
inhabitants (figures of 1995)--, nol lhc population of the Russian Federation as a whole. 
2 
Ukraine), as well as Albania, Armenia, Azerbaijan, Greece and Moldova. Austria, 
Egypt, Israel, Italy, Poland, Slovakia and Tunisia hold observer status. 
9. BSEC's objectives are the promotion of economic co-operation to avoid 
conflict, to achieve the peaceful settlement of disputes in accordance with OSCE 
principles and to assist the participant states in integrating themselves into the 
European and world economy. The fields of co-operation include trade and 
investment; transport, communication and energy; tourism; environment; and science 
and research. 
I 0. BSEC does not constitute a regional organisation in the legal sense; it is not 
based on an agreement binding under international law. Decisions are taken by 
unanimity, under a rotating chairmanship, in BSEC's Assembly of Ministers of Foreign 
Affairs. Seventeen permanent sectoral working groups have been established to deal 
with a wide range of issues including transport, energy, tourism, the promotion and 
protection of investments, banking and finance, and the environment. B SEC has a 
small permanent International Secretariat in Istanbul. Affiliated bodies include the 
B SEC Council, representing the business communities of the participant states; the 
. International Black Sea Club consisting of representatives of Black Sea ports; and the 
Parliamentary Assembly of the Black Sea Economic Co-operation. Other BSEC 
related structures include .the Black Sea Trade and Development Bank in Thessaloniki, 
the Black Sea Regional Energy Centre in Sofia, and the Black Sea Study Centre in 
Athens. 
I 1. BSEC's concrete achievements have hitherto been rather modest. A number of 
common projects involving several BSEC participating states are being developed, 
mainly in the fields of transport, customs and border procedures, power systems, 
telecommunications, and the environment. A Black Sea Trade and Development Bank 
has been set up, yet is so far not operational. BSEC member states have expressed an 
interest in establishing a Black Sea Free Trade Area and are investigating the 
possibility. However, this does not appear to be a realistic objective, taking into 
account that Greece is a member of the EU, Turkey is engaged in a customs union 
with the EC, Bulgaria and Romania have association agreements with an eventual 
3 
orientation towards accession to the EU, and a number of other BSEC states have yet 
to complete the WTO accession process. As regards BSEC' s aspiration to play a role 
in the peaceful settlement of disputes in the region, the fact that BSEC brings together 
representatives of all Black Sea states can be considered an achievement in itself. 
However, results so far remain limited in this domain too. 
12. As BSEC is a relatively young organisation, established only five years ago, it 
is natural that it should require some time before its impact begins to be widely felt. 
13. BSEC will have to overcome a number of challenges before it becomes fully 
effective. First, the wide diversity -cultural, historical, political, as well as economic­
of BSEC participating states has made more difficult the task of defining and 
implementing common objectives. Secondly, only limited funds for BSEC projects are 
available from within the region as the economies of most of the participating states 
are in transition; so far, financial support has been provided largely by international 
donors. Thirdly, a number of BSEC members give greater priority to pursuing their 
foreign policy objectives in the region by other means. 
14. All countries in the region are members of the OSCE and several are involved 
in other regional initiatives. Bulgaria, Moldova, Romania and Ukraine are members of 
the Central European Initiative. Several Black Sea states are involved in the various 
initiatives focusing on stability and security in the Balkans, notably the Royaumont 
Initiative, the Southeast European Co-operative Initiative (SECI), and the Balkan 
Conference on Stability, Security and Co-operation in South-Eastern Europe. 
Moldova, Russia, Ukraine and the three Transcaucasian republics are members of the 
CIS. Azerbaijan and Turkey are members of the Economic Co-operation Organisation 
(ECO). Meetings sponsored by Georgia have taken place to consider the scope for 
regional co-operation among the three Transcaucasian states. A number of 
undertakings in particular concerning transport links have been signed by Azerbaijan, 
Georgia, Ukraine and Uzbekistan. 
4 
1. The Black Sea region's geopolitical identity and economic potential 
Geopolitical identity 
15. The Black Sea region's history is one of rich cultural diversity, as well as 
numerous political problems. The recent political and economic changes in the region 
have opened new opportunities for co-operation and the development of linkages, both 
within the region and with the outside world. This process can help strengthen the 
region's stability and foster its development. In recent months a number of positive 
developments have taken place in Black Sea interstate relations, including the signing 
of a Treaty of Friendship, Co-operation and Partnership as well as an Agreement on 
the Black Sea Fleet between Russia and Ukraine; the conclusion of a Basic Treaty 
between Ukraine and Romania, including an agreement in principle on the joint 
development of two new "Euroregions"4 in areas where their borders converge; and 
the setting up between Turkey and Greece of an informal framework for the discussion 
of outstanding issues in the Aegean Sea. The involvement of the countries concerned 
in regional co-operation initiatives can serve to consolidate these developments. 
16. Due to its geographical position at the junction between Europe and Asia, the 
Black Sea is by nature a transit area. As such, the region has long-standing links with 
both Europe and the Middle East, and is the most direct route linking Europe and 
Central Asia as well as the European NIS and Turkey. This is of particular importance 
given the huge natural resources, especially energy resources, of the Caspian Basin and 
Central Asia. On the negative side, the region has become a transit area for trafficking 
of drugs, weapons and fissile materials; as well as for illegal immigration. 
17. As a result of its geographical position, the Black Sea area is of strategic 
importance from a military point of view. The region is heavily militarised, with the 
armed forces of Russia, Turkey and Ukraine being the three largest in Europe. 5 Arms 
acquisitions in the region are considerable, both in "quantitative and qualitative terms; 
4 These arc cross-border co-operation arrangements between adjacent regions in neighbouring slates. 
The term "Eurorcgion" was coined to designate such arrangements within the European Union, and 
has subsequently been used also for similar cross-border arrangements involving adjacent regions in 
the countries of Central and Eastern Europe. 
5 Now under discussion in the negotiations to revise the CFE Treaty. 
5 

almost half of total trade; in the case ~f Bulgaria and Romania, the EU' s share is in the 
order of fifty to sixty percent. 
22. Trade links between the Black Sea states are relatively weak, with the 
exception of traditional links between Russia and the other New Independent States of 
the region, which are however declining: New trade relations are evolving, though 
they remain fairly small. For example, ,between 1994 and 1996, Turkey's imports from 
Russia more than doubled (from 879 MECU in 1994 to 1,835 MECU in··J996), while 
Turkey's exports to Ukraine increased threefold (from 63 MECU worth in 1994 to 
207 MECU in 1996). New trade flows are developing also between Turkey on the one 
hand, and Georgia, Azerbaijan and Bulgaria on the other hand. The facilitation of 
cross-border traffic and customs procedures will be a critical factor when it comes to 
increasing trade and encouraging investment and economic growth in the region. 
23. The countries of the region have expressed their intention to create a Black Sea 
Free Trade Area. This issue concerns the European Union directly, as Greece, being a 
member of the EU, and Turkey, an associated country bound to the EU's common 
commercial policy by a customs union, are precluded from participating on their own 
behalf in regional free trade agreements. At the same time, the European Union 
welcomes steps toward trade liberalisation as a matter of principle, to the extent that 
these are compatible with the multilateral trade regime and reflect existing agreements 
between the EU and the states concerned. The European Union considers that WTO 
accession of all Black Sea states would be an important and necessary first step 
towards trade liberalisation in the region, and is prepared to provide assistance to those 
Black Sea states not yet member of the WTO in preparing their accession. 8 
24. Foreign investment in the Black Sea area is increasing, though it is still 
relatively modest. In 1995 foreign direct investment into the countries of the region 
v-.,p,~ estimated at $4,874 million; it was $2,915 million in 1994 and $2,034 million in 
1993. The presence of natural resources, relatively well developed infrastructure links 
and, in many instances, a skilled labour force are conducive to attracting foreign 
8 Technical assistance in preparation of WTO accession is currently being provided to Russia, 
Ukraine, Moldova, Georgia and Armenia. 
7 
investment. But, many obstacles to foreign investment, legal as well as practical, 
remain. 
The Black Sea region and the European Union 
25. The Black Sea region has a direct link with the European Union through 
Greece. Furthermore, the European Communities and their Member States have 
signed bilateral agreements with other Black Sea states. Europe Agreements are in 
force with Bulgaria and Romania. Partnership and Co-operation Agreements (PC As) 
have been signed with Russia, Ukraine, Moldova and the three Transcaucasian 
republics. 9 A customs union between the EC and Turkey entered into force on 3 1 
December 1995, based on the 1963 Association Agreement. The Commission has 
recently presented a Communication on relations with Turkey, putting forward a 
number of proposals designed to take the relationship forward on the basis of the 
customs union. 10 
26. Enlargement will further increase the Black Sea region's significance to the 
European Union. The EU has a major interest in promoting political stability and 
economic prosperity in the Black Sea region and stimulating the development of links, 
both within the region and with the EU. 
2. A strategy to encourage Black Sea Co-operation 
Suggested priority objectives 
27. Co-operation in the region could usefully focus on: 
1. the promotion of political stability and dialogue, and the strengthening of 
human rights, democracy and the rule of law; 
9 As opposed to the Customs Union and Association agreements, the PCAs do not offer preferential 
conditions for trade; however, the agreements with Russia, Ukraine and Moldova foresee in the 
possibility of opening negotiations on a Free Trade Area. 
10 These include in particular the consolidation of the Customs Union, the promotion of industrial co­
operation and investment, participation in Community programmes, co-operation on human rights, 
and support to regional and cross-border co-operation. 
8 
2. transit through the region and the development of the region's transport, 
energy and telecommunications networks including connections to European 
networks; 
3. regional commercial co-operation and the creation of favourable conditions to 
attract EU and other foreign investment, including in the sector of small and 
medium enterprises, while ensuring the compatibility of any new arrangements 
with existing regimes; 
4. sustainable development, the protection of the region's environmental integrity 
and nuclear safety; 
5. the reduction of drug trafficking, smuggling and illegal immigration throughout 
the region. 
28. Regional co-operation is not the sole prerogative of the central authorities of 
the countries concerned, but could usefully involve other decision-making levels within 
participating states. The benefits of Black Sea co-operation would be enhanced by 
closely involving regional and local administrations in this process and by encouraging 
closer relations among communities separated by frontiers, including at the level of 
people-to-people contacts.11 
Instruments to support Black Sea co-operation 
29. There is a wide range of political, commercial and technical assistance 
instruments to support and to foster regional co-operation in the Black Sea area. As 
part of Community assistance to the countries of the region -which over the period 
1991-1996 amounted to a total of 2,589 MECU12 -the EC is already making a 
significant contribution to strengthening regional co-operation in the Black Sea area 
and stimulating the region's development. Such support is provided mainly through the 
Phare and Tacis programmes (national as well as multi-country programmes), 
11 The ongoing study on "Territorial Impact of Developments in the Black Sea Region on the 
European Union", commissioned by Directorate General XVI and expected to be finalised by mid 
1998, will provide important input in this context. 
12 This figure excludes Community assistance to Greece, which, as an EU member state, has access to 
the European Structural Funds. It includes Community assistance to the Russian Federation as a 
whole. 
9 
complemented by funding from Interreg and from sector-specific Community 
programmes. 
30. Over the period 1991-1996, an estimated 490 MECU in Community grants 
have been provided for activities aimed specifically at strengthening regional 
development and co-operation around the Black Sea. In the field of transport, a 
Community sponsored joint initiative involving all Black Sea countries has led the Pan­
European Transport Conference in Helsinki to endorse the development of the Black 
Sea region as a Pan-European Transport Area, developing a multi-modal and 
regionally integrated transport network. This will serve to link the Pan European 
Transport Corridors west of the Black Sea with those to the north, as well as with the 
Tacis funded TRACECA13 corridor through the Caucasus. In the domain of energy, 
the Black Sea states are co-operating in Phare and Tacis funded initiatives on the 
rehabilitation, modernisation and rationalisation of interstate oil and gas pipelines, in 
particular the so-called INOGATE14 programme, as well as in the Community 
sponsored Black Sea Regional Energy Centre. In the field of ecologically sustainable 
development, Community support is provided to the Black Sea environmental 
programme and to the implementation of the Bucharest Convention for the 
environmental protection of the Black Sea concluded by Black Sea littoral states in 
1990, as well as to the implementation of the Black Sea Strategic Action Plan signed 
by BSEC participant states in 1996. Furthermore, Community assistance is provided 
in support of the process of WTO accession of the Black Sea states, which is a crucial 
factor in strengthening trade co-operation in the region. Limited Tacis and Phare 
assistance has been provided also to BSEC related activities.15 
3 1. In line with the approach taken in other regional initiatives, most importantly in 
the Baltic Sea region, it is proposed that technical assistance continue to be provided 
exclusively through existing instruments (primarily Tacis, Phare, Meda, and, where 
appropriate, lnterreg) in accordance with their rules and established procedures and on 
13 TRACECA stands for Transport Corridor Europe Caucasus Central Asia. 
14 INOGA TE stands for Rehabilitation, Modernisation and Rationalisaton of Interstate Oil and Gas 
Pipelines in the NIS. 
is Technical assistance has been provided for the development of the business plan of the Black Sea 
Trade and Development Bank in Thessaloniki, and to the International Centre for Black Sea Studies 
in Athens in conducting a number of economic studies. 
10 
the basis of existing budget lines. The Commission will devote particular attention to 
co-ordinating the focused use of the various Community instruments in the Black Sea 
region. 
"Black Sea synergies" 
32. To develop "Black Sea synergies" in the framework of current Community 
assistance programmes, the Commission is ready to provide funding for Black Sea 
related activities under the Tacis Interstate and the Phare multi-country programmes, 
as well as under the Tacis and Phare national programmes for the respective Black Sea 
littoral states and, where appropriate, under the lnterreg programme, provided that an 
explicit request to this effect is made by the Black Sea states concerned and that 
project proposals are submitted through the standard channels and are judged on their 
own merits in accordance with standard rules and procedures. Relevant project 
proposals submitted under the Phare, Tacis, Meda and, where appropriate, lnterreg 
programmes -in particular proposals which involve several Black Sea states and which 
are related to the development of transport, energy and telecommunications networks, 
trade co-operation, ecologically sustainable development, and justice and home affairs 
-would thus be evaluated also in "Black Sea" terms. 
3 3. Further initiatives, building on what has been achieved or opening new 
perspectives for co-operation, will n~ed to be considered. These will include linking 
TRACECA with the Pan-European Transport Corridors and the ports on the Western 
Black Sea coasts, developing a multimodal and regionally integrated transport network 
in the Black Sea area~ and ensuring the strategic development of energy networks 
connecting the Black Sea region with Central Asia and Europe. Fostering commercial 
co-operation and stimulating investment into the region, and assuring implementation 
of the environmental Black Sea Strategic Action Plan and the Bucharest Convention 
~.~ j~e protection of the Black Sea, will equally remain key objectives. The expected 
refocussing of the "Environment for Europe" process towards the New Independent 
States is likely to open new perspectives for environmental co-operation in the Black 
Sea area. Furthermore, it will be important to assist in reducing illegal trafficking of 
drugs, weapons and illegal immigration. In assessing the usefulness of EC support to 
11 
particular initiatives, the active involvement of the countries directly concerned, 
including through financing, will serve as a key criterion. 
34. Support for Black Sea co-operation presents challenging opportunities for, and 
will greatly benefit from, a greater synergy between Tacis, Phare and Meda. These 
three Community programmes share the common objectives of supporting partner 
countries in the process of economic transformation and strengthening democracy, 
while each covering a distinct geographical area and being governed by specific rules. 
Where appropriate, due co-ordination will need to be ensured also with the Interreg 
programme. To maximise the effectiveness of Community support to Black Sea-co­
operation and guarantee the necessary synergy between the programmes concerned, 
close consultation between Commission services on actions related to the Black Sea 
region will be ensured, creating a framework for the systematic joint examination and, 
where appropriate, joint financing of proposals designed to strengthen Black Sea co­
operation. Further co-ordination and co-operation with the !Fis will be explored 
where appropriate. 
3 5. So far, the European Community's principal interlocutors in developing 
initiatives in the Black Sea region have been the Black Sea littoral states concerned. 
The Commission proposes to continue working in this way for the programming of 
Community actions in the Black Sea region, while encouraging the countries of the 
region to develop joint projects with a regional dimension. The Commission would 
welcome the added value which BSEC -as the main regional co-operation initiative of 
a general nature in the Black Sea area -could provide and would be prepared to 
exchange on an ongoing basis information on Community actions with relevance to 
objectives agreed within BSEC. The input of other existing co-operation initiatives in 
the Black Sea region, insofar they provide added value, would equally be welcomed. 
36. At present, the European Community does not have a formal institutional 
relationship with BSEC. Against the background of the European Union's policy to 
support the development of regional co-operation initiatives, some form of relationship 
with BSEC could usefully be envisaged. In their recent Moscow Declaration, the 
Heads of State or Government of the BSEC member states expressed the desire to 
12 
'develop with the EU a common platform for developing closer contacts and co­
operation'. In view of the Commission's role in implementing technical assistance, it 
would be appropriate if the Commission, on behalf of the European Community, were 
invited to observe BSEC meetings. The development of a relationship with BSEC is 
complementary to strengthening bilateral relations with each of the sovereign states in 
the region. 
Summary and Conclusion 
3 7. The Commission welcomes and supports increased regional co-operation among 
the Black Sea states and proposes to develop a new approach to regional co-operation 
around the Black Sea as part of a wider EU strategy for the region, taking into account 
both the common interests of the Black Sea states and EU interests in the region. The 
Commission suggests basing this approach on a mix of existing political, commercial 
and technical assistance instruments. The European Community should be prepared to 
support actions encouraging regional co-operation around the Black Sea -including at 
the sub-regional level -in particular in the fields of transport, energy and 
telecommunications networks, trade co-operation, ecologically sustainable 
development, and justice and home affairs. 
3 8. In assessing the usefulness of EC support for particular initiatives, the active 
involvement of the countries directly concerned, including through financing, should 
serve as a key criterion. Technical assistance will be provided through existing 
instruments -primarily Tacis, Phare, Meda and, where appropriate, Interreg -in 
accordance with their established procedures and on the basis of existing budget lines, 
while at the same time developing as much as possible "Black Sea synergies" among 
them. The development of such co-operation will provide an opportunity for economic 
actors in all Members States to participate fully in the agreed co-operation projects. 
39. In programming actions in the Black Sea region, the Commission's main 
interlocutors will be the Black Sea states concerned, both on a bilateral basis and in the 
framework of multi-country discussions. At the same time, BSEC -as the main 
regional co-operation initiative of a general nature in the Black Sea area -can provide 
13 
important support for this exercise. In view of the Commission's role in implementing 
assistance, it would be appropriate if the Commission, on behalf of the European 
Community, were invited to observe BSEC meetings. By encouraging regional co­
operation in the Black Sea area, the European Union will contribute to enhancing 
security, stability and prosperity in this region which is of increasing strategic 
importance to the European Union. 
14 
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Contractual relatlon• with the European Union 
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Size of main cities 
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Population change (annual variation rates, 
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• Soun:v · World #Jani< 
ISSN 0254-1475 
COM(97) 597 final 
DOCUMENTS 
EN 11 13 02 
Catalogue number CB-C0-97-612-EN-C 
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Otlice for Otlicial Publications of the European Communities 
L-2985 Luxembourg ISBN 92-78-27528-X