WRITTEN QUESTION E-1955/99

by Gerhard Hager (NI) to the Commission

(5 November 1999)

Subject: Kosovo Agenda 2000

As part of the reconstruction effort in Kosovo, the EU has provided financial assistance running into billions. The same is true for the reconstruction following the devastating earthquake in Turkey. These measures were decided on after the adoption of Agenda 2000. In view of this, can the Commission answer the following:

1. How much will the EU and/or their Member States invest in the reconstruction of Kosovo and what is the duration of the aid programmes?

2. What is the effect of these measures likely to be on the future budgets of the EU?

3. Does the Commission consider that the plans for financing the Agenda 2000 need to be reviewed?

4. If not, how does the Commission explain the fact that financial assistance will have no effect on the plans for financing Agenda 2000?

Answer given by Mr Patten on behalf of the Commission

(28 January 2000)

1. The budgetary authority agreed to allocate 137 million in the budgetary year 1999 out of budget chapter B7-54 for reconstruction projects in Kosovo. The Commission has made efforts to implement this. The amounts do not include other Commission funding related to the Kosovo crisis, like humanitarian aid provided by the European Community humanitarian office (ECHO) ( 378 million in 1999) or the exceptional 100 million budgetary support offered in 1999 out of budget chapter B7-54 to the Former Yugoslav Republic of Macedonia (FYROM) and Montenegro and out of budget chapter B7-50 to Albania in order to enable these countries to cope with the additional burden on their budget caused by the massive influx of refugees from Kosovo. Additional macro-financial assistance was also granted to FYROM and Bosnia and Herzegovina whose economies suffered from the crisis in the region.

The Commission in November 1999 announced that it would propose a major assistance and recovery programme for the Western Balkans, including Kosovo, for the years 2000 to 2006. It suggested a total of 5 500 million, but the detailed assessment of needs is to be completed in the spring 2000 for consideration in the 2001 budget procedure and will be available in time for the presentation of the new programme.

The volume of assistance the Member States pledged for the reconstruction of Kosovo is set out in the tables that were drawn up after the Kosovo donors conferences of July and November 1999, and is available to be consulted on the internet site for South East Europe reconstruction jointly managed by the Commission and the World Bank (http://www.seerecon.org/Calendar/pledgeeuro.pdf and http://www.seerecon.org/Calendar/SDC/sdc-pledges-euro.pdf).

2. to 4. 500 million was initially foreseen by the Commission for Kosovo reconstruction in 2000 in mid-year 1999, some 440 million more than foreseen in the Commission's preliminary draft budget of April 1999. The final assessment of needs was to be made for 2000 during the budgetary procedure. The Commission presented its views on the impact of the Kosovo financing on the budget through the proposal of letter of amendment No 4/2000, at the end of October 1999. The Commission proposed to react in at least two stages: first covering the 2000 budget only, and later, during the preparation of the 2001 preliminary draft budget, and once exact assessments of the needs and the funding by other donors was known, for the rest of the period covered by Agenda 2000. A more co-operative economic development programme will gradually replace the urgent reconstruction.

The Commission proposed a combination of three funding sources for the extra finance needed: redeployment in so far as feasible, partial use of the flexibility instrument and a revision of the financial perspective. The budgetary authority agreed 240 million for direct aid to Kosovo reconstruction in December 1999, with further funding from humanitarian aid and from carry-overs to bring the total available for Kosovo in 2000 to 360 million. It decided to call fully on the flexibility reserve and to re-deploy funding within heading 4 to achieve this.