Communication from the Commission to the Council on operational conclusions - EU stabilisation and association process for countries of South-Eastern Europe Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia, former Yugoslav Republic of Macedonia and Albania
Date: 2000-02-02
Institutions: European Commission
Subjects: Albania, Yugoslavia, association agreement (EU), economic stabilisation, market stabilisation

COMMISSION OF THE EUROPEAN COMMUNITIES

CORRIGENDUM
Page 3, CONCERNE UNIQUEMENT : FR/DE/EN

Brussels, 2.3.2000
COM(2000) 49 final / 2

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

on Operational Conclusions
EU Stabilisation and Association process for countries of South-Eastern Europe

Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia,
former Yugoslav Republic of Macedonia and Albania

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

on Operational Conclusions
EU Stabilisation and Association process for countries of South-Eastern Europe

Bosnia and Herzegovina, Croatia, Federal Republic of Yugoslavia,
former Yugoslav Republic of Macedonia and Albania

INTRODUCTION

In the context of the Regional Approach to countries of South-Eastern Europe1, the Council
established political and economic conditions2 to be fulfilled by these countries, as the basis
for a coherent and transparent policy towards the development of bilateral relations with these
countries in the field of trade, financial assistance and economic cooperation, as well as of
contractual relations.

In 1999, the Regional Approach was developed into the EU Stabilisation and Association
process3. This process did not a priori change the conditions applying to the development of
bilateral relations in the field of trade or financial assistance and economic cooperation, or for
the start of negotiations on contractual relations. What was changed was the nature of the
contractual relations on offer - replacing the prospect of a Cooperation Agreement with that of
a Stabilisation and Association Agreement.

The EU Stabilisation and Association process foresees that the conditions for the opening of
negotiations are those laid down in the Council Conclusions of 29 April 19974. The various
steps involved in the opening of negotiations are

–

–

–

–

–

1

2

3

4

Fulfilment of the conditions set out in the Council Conclusions of 29 April 1997 (i.e.
as assessed in these conditionality reports), followed by

A report, by the Commission, on the feasibility of the opening of negotiations for an
SAA with that country, followed by

Assessment by the Council of this "feasibility report" and, if positive, a request for
the establishment, by the Commission, of a proposal for negotiating directives

A formal proposal, by the Commission, of negotiating directives for an SAA

Adoption of these negotiating directives by the Council, and the launch of
negotiations.

Conclusions of the General Affairs Council of 26 February 1996, followed by a Commission report on
common principles for future contractual relations with certain countries in South-Eastern Europe: Report
fromtheCommissiontotheCouncilandtheEuropeanParliament COM(96)476 final of 2.10.96
Conclusions of the General Affairs Council of 29 April 1997
Conclusions of the General Affairs Council of 21 June 1999, based on the Commission Communication
totheCouncilandtheEuropeanParliament onthe Stabilisation and Association processforcountries of
SouthEasternEuropeCOM(99)235 of 26.5.99
Although no specific criteria were ever developed, in that context, for the further development of the
existing contractual relations with Albania and the former Yugoslav Republic of Macedonia.

2

The Commission has also presented5 a new strategy on assistance for the countries
concerned by the EU Stabilisation and Association process, establishing a single legal basis
for assistance - replacing the present OBNOVA and PHARE programmes. This new strategy
will have as general objectives the promotion of institutional capacity-building, economic
development and regional cooperation. With a view to increased emphasis on the
development of regional cooperation, existing programmes and conditionality will be re-
orientated accordingly.

The present Commission Operational Conclusions have been reached on the basis of a factual
report6 which reviews compliance with these conditions by Bosnia and Herzegovina, Croatia,
the Federal Republic of Yugoslavia (FRY) - all of which are subject to obligations under the
peace agreements - as well as the former Yugoslav Republic of Macedonia, and Albania. For
each country, compliance has been reviewed under the following headings: democratic
principles; human rights and the rule of law; respect for and protection of minorities; market
economy reforms; regional cooperation; and, in the case of Bosnia and Herzegovina, Croatia
and the Federal Republic of Yugoslavia, compliance with obligations under the Dayton and
Erdut Agreements,
the
implementation of UNSCR 1244 (Kosovo).

Implementation Councils

and, most

the Peace

recently,

While work is presently underway on the refocussing of assistance, and the relevant
conditionality, the revised legislative process for a new assistance Regulation has not yet been
completed. The Conclusions drawn in the present document therefore relate to the existing
system i.e. eligibility for the autonomous trade preferences, economic and financial assistance
to
under the PHARE programme (but not the OBNOVA programme, which is subject
different conditionality) and contractual relations. It also takes account of the ongoing work,
by the Council, on the Commission proposal for negotiating directives for an SAA with
FYROM7, and of the Commission report on the feasibility of the opening of negotiations,
with Albania, for an SAA.

CONCLUSIONS

On the basis of the factual report - covering the period to January 2000 - contained in the
Commission Staff Working Paper on compliance, by the five countries concerned, with the
conditions set out in the Council Conclusions of 29 April 1997 and 21 June 1999 (SEC
(2000)168 / 2 of 09.02.2000), the Commission has reached the following conclusions.

Section 1

1.

Bosnia and Herzegovina

Bosnia and Herzegovina will continue to benefit from the autonomous trade
preferences which have been substantially improved with effect from 2000.

Bosnia and Herzegovina is passing from a phase of heavier reconstruction to a phase
of political and economic consolidation that requires more attention, particularly in
the field of institution building and economic reform. The main problems of the

5

6

7

COM (1999) 661 final of 8.12.99
Commission Staff Working Paper: EU Stabilisation and Association process for countries of
SouthEastern Europe - Compliance with the Council Conclusions of 29 April 1997 and 21 June 1999
SEC(2000) 168 /2 of 09.02.2000
SEC(99)1279 final of 8.9.99

3

in the

improvement

country are the lack of consensus on a common statehood, general weakness of the
institutions and an underdeveloped civil society. State institutions need to be
developed and new coordination mechanisms at the entity and local level are needed
to ensure effective and coherent action on the part of the country as a whole. A
for
substantial
rapprochement to the European structures. BiH authorities at all levels are expected
to commit
themselves to this end, for which specific assistance will be made
available. Another major challenge facing Bosnia and Herzegovina in the coming
years will consist of achieving a process of self-sustained economic growth in the
face of declining aid flows. This will require the establishment of an economic
environment conducive to private sector led growth and the adoption of a medium-
term coherent economic reform programme accompanied by stability oriented
macroeconomic policies.

the State is essential

functioning of

Return of
refugees and displaced persons (especially minority returns) have
improved. Both entities have made progress in the fields of judicial reform and
economic legislation. The contribution of Bosnia and Herzegovina authorities, at
State and entity level, to the activities of the EU-BiH Consultative Task Force (CTF)
needs to be further improved and, in particular, BiH authorities should ensure an
adequate coordination and follow-up of the CTF joint recommendations.

Due to the general political uncertainty and the institutional deficiencies, a
Stabilisation and Association Agreement, or the conduct of a feasibility study to
this end, cannot be envisaged at this stage.

2.

Croatia

in Croatian
Recent developments are encouraging and can be a turning point
politics.. Despite concerns regarding the electoral legislative framework and a biased
State television, the recent elections were conducted in a calm and orderly manner
and signalled a strong desire for change by the Croatian population. The new
Croatian leadership has the opportunity to put Croatia on a fully democratic path and
rapidly to prove its commitment to solving the outstanding political questions which
have so far hampered a substantial development of EU - Croatia relations.

Croatia will continue to benefit from the autonomous trade preferences, which have
been substantially improved with effect from 2000.

The new Government is encouraged to undertake the necessary steps in order to
enable the European Community to broaden its assistance and prepare a report on the
feasibility of the opening of negotiations for a Stabilisation and Association
Agreement. Until then, political dialogue, and cooperation within the Consultative
Task Force, will be useful instruments with which to encourage reform and follow
developments.

3.

a)

Federal Republic of Yugoslavia

FRY / Serbia

Given the continuing failure of the federal authorities to make any moves to fulfil the
relevant conditions, the FRY obviously remains ineligible for the autonomous trade
preferences.

4

Again, given the non-fulfilment of the relevant conditions, it is not appropriate to
discuss the eligibility of the FRY for PHARE. Apart from humanitarian and
democratisation assistance, which will continue, certain other forms of assistance
(not provided to or through the central authorities) will continue.

It would also be inappropriate to propose the opening of negotiations for a
Stabilisation and Association Agreement, although FRY remains eligible for the
Stabilisation and Association process once it complies with the relevant conditions.
In the meanwhile, political dialogue is being stepped up with representatives of the
democratic forces within the Federal Republic of Yugoslavia.

All forms of relevant assistance (humanitarian, democratisation, reconstruction,
budgetary) are being provided in Kosovo, which has also been specifically exempted
from the oil embargo and flight ban. Support, both financial and in personnel terms,
is being provided to the civil administration (UNMiK). Assistance should be
targetted at, and conditional upon, reduced inter-ethnic tensions and increased
cooperation with civil administration structures.

b)

Montenegro

The main forms of bilateral relations with the European Community - autonomous
trade preferences and PHARE - apply to the state (FRY) as a whole. As these
instruments cannot therefore be used for the benefit of Montenegro, continuing
assistance to that republic will continue to be by means of other Community
instruments. Nor, for the same reason, can contractual relations be considered at this
time.

As far as possible, Montenegro has been protected from the effects of the sanctions
on the FRY / Serbia, and has been specifically exempted from the flight ban and oil
embargo. Montenegro also participates in the political dialogue which has begun
with representatives of the democratic forces within the Federal Republic of
Yugoslavia.

SECTION 2

4.

Former Yugoslav Republic of Macedonia

Acknowledging the positive record achieved by the country, its exemplary role in the
region, and its compliance with the relevant conditionality, the Council adopted
negotiating directives for a Stabilisation & Association Agreement with the former
Yugoslav Republic of Macedonia on 24 January 2000, on the basis of the
Commission’s feasibility report8 and recommendation for negotiating directives9.
The Commission is making the necessary preparations with a view to opening
negotiations during March 2000.

8

9

Report on the Feasibility of negotiating a Stabilisation & Association Agreement with the former Yugoslav
Republic of Macedonia, COM (99) 300 of 16 June 1999
Recommendation for a Council Decision authorising the Commission to negotiate a Stabilisation &
Association Agreement with the former Yugoslav Republic of Macedonia, SEC (1999) 1279 final of 8
September 1999

5

In the meantime, all existing instruments under the present Cooperation and
Transport Agreements and within Community assistance as well as the political
dialogue will be actively used in order to intensify the ongoing reform process in the
country, in particular in areas where further progress is needed (economic reforms;
law enforcement and the
public administration reform, reform of the judiciary,
media).

5.

Albania

In accordance with conclusions of the recently adopted feasibility report10,. the
Albanian government is invited to present a status report, including a timetable on
actions taken or envisaged in identified priority areas. These would include
improvement of governance and
strengthening of security and public order
strengthening of law enforcement; continued macro-economic stabilisation and
accelerated structural reforms. The Government
is also invited to make further
progress in all these areas with a view to a possible future opening of negotiations for
a Stabilisation and Association Agreement. The Commission would also have to
carry out additional technical talks with the Albanian authorities in order to clarify
further certain aspects linked to the perspective of a Stabilisation and Association
to EC acquis including related
Agreement
institutional aspects). In the meantime, all existing instruments under the present
Trade and Cooperation Agreement and within Community assistance as well as
the political dialogue will be actively used in order to support the ongoing process of
stabilisation and reform in the country. Support to the public administration reform
including the judiciary, police (in cooperation with WEU/MAPE) and the customs
services remains of paramount importance, and could include specific support in
order to allow Albania to benefit fully from the recently adopted trade preferences.

(Free Trade Area and alignment

10

Commission Report on the feasibility of negotiating a Stabilisation and Association Agreement with
Albania, COM (1999) 599 final of 24 November 1999

6