Communication from the Commission - The Western Balkans on the road to the EU: consolidating stability and raising prosperity
Date: 2006-01-27
Institutions: European Commission
Subjects: European Union, European integration, Western Balkans, cooperation policy, economic development, economic stabilisation, political reform

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.1.2006 
COM(2006) 27 final 

COMMUNICATION FROM THE COMMISSION 

The Western Balkans on the road to the EU: consolidating stability and raising 
prosperity 

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COMMUNICATION FROM THE COMMISSION 

The Western Balkans on the road to the EU: consolidating stability and raising 
prosperity 

In June 2003, the Thessaloniki EU-Western Balkans summit confirmed the EU’s support for 
the  European  perspective  of  the  Western  Balkan  countries.1  The  summit  endorsed  the 
“Thessaloniki  agenda”,  comprising  measures  drawn  from  the  pre-accession  process,  and 
made a commitment to implement it jointly.  

In June 2005 the European Council reaffirmed its commitment to implement the Thessaloniki 
agenda,  noting  that  each  country's  progress  towards  European  integration  depends  on  its 
efforts to comply with the Copenhagen criteria and the conditionality of the Stabilisation and 
Association Process (SAp).  

Almost  three  years  after  the  Thessaloniki  summit,  the  Western  Balkans  region  has  further 
stabilised and advanced towards the European Union. The European perspective provides a 
powerful  incentive  for  political  and  economic  reform  and  has  encouraged  reconciliation 
among  the  peoples  of  the  region.  It  is  in  the  interest  of  the  EU  as  a  whole,  as  well  as  the 
countries concerned, that this process should be stepped up. This will help the EU to attain its 
own  objectives  without  the  risk  of  renewed  instability  in  a  directly  adjacent  region. 
Reinforcing the EU’s policy for the region, especially in areas of mutual interest where there 
is  a  strong  demand  from  the  people  of  the  region,  such  as  Justice,  Liberty  and  Security, 
education  and  trade,  is  the  best  means  to  strengthen  the  credibility  of  the  process  and  to 
lessen political risks.  

The coming months will bring major regional challenges, as the Kosovo status process goes 
ahead and other fundamental constitutional issues come to the forefront of public attention. 
At  such  a  time,  the  encouragement  provided  by  the  fulfilment  of  the  Thessaloniki  agenda  is 
particularly important. The Commission will continue to support stabilisation of the region, 
both  through  the  Stabilisation  and  Association  process  and  through  its  contribution  to  the 
Common Foreign and Security Policy and its support for ESDP operations in the region. 

The Austrian Presidency is planning to hold a substantive discussion on the Western Balkans 
during  the  informal  meeting  of  foreign  ministers  on  10-11  March  in  Salzburg.  This  will 
provide  a  useful  occasion  to  reaffirm  the  EU’s  goals  and  to  agree  on  ways  and  means  to 
reinforce the EU’s efforts in the region. The EU’s objective is to promote stability, security 
and prosperity in the Western Balkans through the region’s progressive integration into the 
European mainstream.  

Ahead of the Salzburg meeting, this Communication assesses developments since Thessaloniki 
and  sets  out  concrete  measures  to  reinforce  its  policy  and  instruments  in  line  with  the 
Commission’s strategy Paper on enlargement of November 2005 As the Council concluded in 
December,  the  Strategy  Paper  is  a  good  basis  for  the  discussion  of  enlargement  issues  in 
2006. Member States are invited to endorse the measures set out in the present document and 
to ensure that the necessary support is provided to achieve the EU’s objectives in the region.  

1 

The  countries  covered  by  the  Stabilisation  and  Association  process,  the  EU’s  policy  for  the  Western 
Balkans, are Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, 
and Serbia and Montenegro, including Kosovo as defined in UN Security Council Resolution 1244/99. 

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--I-- 

Three years after Thessaloniki 

Progress achieved and challenges ahead 

Over  the  last  three  years,  the  countries  of  the  Western  Balkans  have  made  considerable 
progress  in  stabilisation  and  reconciliation,  internal  reform  and  regional  cooperation.  As  a 
result, they have moved closer to the EU.  

Important  steps  have  been  taken  in  recent  months:  opening  of  accession  negotiations  with 
Croatia,  granting  candidate  status  the  former  Yugoslav  Republic  of  Macedonia,  nearing 
conclusion  of  a  Stabilisation  and  Association  Agreement  (SAA)  with  Albania,  opening  of 
SAA  negotiations  with  Serbia  and  Montenegro  and  Bosnia  and  Herzegovina.  The  political 
process  for  reaching  a  decision  on  Kosovo’s  future  status  has  begun.  These  developments 
show  that  the  peoples  and  governments  of  the  region  are  seeking  a  better  future  in  the 
mainstream of European political and economic life. The European Union has demonstrated 
its commitment to supporting them in this approach. These commitments have remained firm 
throughout the last year.  

The region faces major challenges in the coming period, especially the Kosovo status process 
and the constitutional arrangements of Serbia and Montenegro. Successful handling of these 
issues could open the way for rapid progress. Failure would have serious consequences for the 
countries concerned, for the region, and for European security. Possible constitutional reform 
in Bosnia and Herzegovina will be an additional challenge. The EU is committed to helping to 
address these constitutional and status issues in accordance with European and international 
standards, to help achieve greater reconciliation and political maturity in the region, as well as 
to  move  the  countries  on  towards  realising  their  European  vocation.  It  will  continue  to 
strengthen and coordinate its presence on the ground. 

The EU will play an active role in Kosovo’s status process and has appointed a representative 
to support the UN Status Envoy. EU policies and leverage must be used in full to help reach a 
balanced  and  sustainable  settlement  which  brings  peace  and  stability  not  only  to  the  parties 
directly involved, but to the region as a whole. The EU is also willing to play its part in the 
international presence that will be required once decisions on the status of Kosovo are taken. 
The Commission is lending its political and technical expertise to the status talks and it will 
have  to  shoulder  a  large  share  of  the  responsibility  for  implementing  an  outcome  that 
promotes Kosovo's European perspective. 

The  region  has  moved  forward  in  terms  of  achieving  lasting  macroeconomic  stability  and 
increasing its competitiveness but progress is uneven and much remains to be done. 

As  progress  is  made  on  stabilisation  and  status  issues  are  addressed,  the  Western  Balkan 
countries will increasingly focus on the reforms needed to approach European standards. The 
economic  and  social  agenda  will  come  to  the  forefront,  as  weak  economies,  high 
unemployment  and  inadequate  social  cohesion  are  major  problems  throughout  the  area.  EU 
policies for the region should focus more on equitable and sustained economic development 
and on extending the benefits of economic growth to vulnerable groups and communities by 
combating  unemployment,  social  exclusion  and  discrimination  and  by  promoting  social 
dialogue. 

The  European/Accession  Partnerships  agreed  in  December  2005  for  the  Western  Balkan 
countries  define  the  priorities  on  which  the  countries  should  concentrate  in  the  short  and 
medium term. Progress on these, as well as satisfactory implementation of the SAAs, should 

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allow them to move up the steps set out in the Commission’s Strategy Paper on enlargement 
of November 2005. 

Implementation of the Thessaloniki Agenda 

The  commitments  undertaken  by  the  EU  in  the  Thessaloniki  agenda  have  mostly  been 
achieved or are well on track. The Western Balkan countries have made considerable progress 
on their Thessaloniki commitments. Nonetheless further  efforts to promote  the Thessaloniki 
agenda are needed. 

Political  dialogue  and  cooperation  in  the  area  of  Common  Foreign  and  Security  Policy 
(CFSP) have been enhanced: 

– 

– 

– 

The EU-Western Balkans political forum has been established and annual meetings 
of  foreign  and  justice  and  home  affairs  ministers  have  been  held.  Annual  troika 
meetings at Political Director level have been held in the margins of the UN General 
Assembly.  These  meetings  have  largely  achieved  their  aims.  A  stronger  focus  on 
concrete agendas and deliverables would improve their impact. 

The  Western  Balkan  countries  have  been  invited  to  align  with  common  positions, 
demarches and declarations on CFSP issues since the beginning of 2004, which they 
have done in a large number of relevant cases. 

Bilateral  political  dialogue  has  been  established  with  Bosnia  and  Herzegovina  and 
Serbia  and  Montenegro,  with  annual  troika  meetings  at  ministerial  level,  thus 
completing  the  political  dialogue  already  in  place  with  Albania,  Croatia  and  the 
former Yugoslav Republic of Macedonia. 

The  Thessaloniki  provisions  for  enhanced  EU  support  for  institution  building  and  for  the 
opening  of  Community  programmes  and  agencies  to  the  Western  Balkans  have  been 
implemented  or  are  well  on  track.  The  same  goes  for  a  number  of  trade-related  measures, 
Western  Balkan  countries’  participation  in  the  European  Charter  for  Small  Enterprises  and 
additional  financial  assistance.  Important  steps  have  been  taken  in  the  area  of  regional 
cooperation. The state of play in these areas and the next steps are described below. 

Regular  economic  dialogue  has  been  established  between  the  Commission  and  each  of  the 
Western  Balkan  countries.  This  is  expected  to  be  extended  to  Bosnia  and  Herzegovina  in 
spring. A similar dialogue is conducted with Kosovo.  

Progress in the area of Justice, Freedom and Security has been significant and includes action 
to  combat  organised  crime,  building  up  institutional  capacity  in  the  judiciaries,  improved 
police  and  prosecutor  cooperation,  an  Action  Plan  for  drugs  trafficking,  measures  for 
combating  money  laundering  and  illegal  migration,  as  well  as  implementation  of 
commitments made at the Ohrid Conference on border security and management. Many of the 
measures in this field have received Community support. However, efforts in this area need to 
be stepped up.  

Joint Parliamentary Committees were established in 2004 between the EU and Croatia and the 
former  Yugoslav  Republic  of  Macedonia  and  have  been  meeting  regularly.  Regular 
interparliamentary meetings with Albania, Bosnia and Herzegovina, Serbia and Montenegro, 
and Kosovo are also held. 

The EU has continued its active presence in peace-keeping missions and conflict prevention. 
It  took  over  from  NATO-led  military  operations  in  the  former  Yugoslav  Republic  of 
Macedonia  and  Bosnia  and  Herzegovina  and  has  maintained  Police  Missions  in  both  these 

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countries. EU Monitoring Missions have continued to operate in all countries except Croatia. 
Special Representatives of the EU SG/HR have been in place in Sarajevo and in Skopje and 
as  of  November  2005  a  joint  EUSR  and  Head  of  the  Commission  Delegation  has  been 
appointed for the former Yugoslav Republic of Macedonia.  

The EU has been committed to Kosovo since the outset of the 1999 conflict, investing major 
political and financial efforts to build lasting peace and democracy, and to facilitate Kosovo’s 
progress  towards  a  democratic,  multi-ethnic  society.  The  EU  has  supported  the  United 
Nations Mission in Kosovo (UNMIK), also by establishing its economic Pillar IV and funding 
its administrative expenditure. It has worked closely with the Provisional Institutions of Self-
Government. EU support for the development of Kosovo to date exceeds €1.6bn. 

The Commission’s annual reports, most recently the progress reports adopted on 9 November 
2005,  provide  detailed  assessments  of  both  progress  and  delays  in  stabilising  the  region.  In 
particular,  greater  effort  is  needed  in  the  areas  of  refugee  return,  reconciliation  through 
education,  social  development  and  culture.  Full  cooperation  with  the  International  Criminal 
Tribunal for the former Yugoslavia has yet to be achieved in some countries. Support for the 
International Criminal Court, to which all Western Balkan countries are parties, has not been 
in line with the relevant EU decisions in some cases. 

--II-- 

The  Stabilisation  and  Association  process,  as  enhanced  by  the  Thessaloniki  agenda,  has 
proved  an  effective  policy  framework  for  EU  action  in  the  Western  Balkans.  As  part  of  the 
enlargement process, it will remain the framework for the European course of these countries 
all the way to their future accession. However, its implementation in a number of areas needs 
further work, in the light of recent experience and the challenges ahead. These areas and the 
suggested next steps are set out below. 

Removing  obstacles  to  trade  and 
development 

investment;  promoting  economic  and  social 

Development  of  trade  and  investment  critically  depends  on  political  stability,  the  overall 
economic  climate  and  progress  in  reforms  in  each  country  and  in  the  region  as  a  whole. 
Macroeconomic  stability  needs  to  be  pursued  further,  in  particular  fiscal  and  monetary 
policies aiming at securing an environment conducive to sustained growth. Structural reforms 
need  to  be  pursued  vigorously  in  order  to  improve  the  functioning  of  markets  and 
competitiveness. In particular, countries have to advance in restructuring and privatisation of 
state-owned  enterprises,  establishment  of  functioning  institutions  and  judiciary,  and  further 
reform  of  the  labour  markets.  It  is  improvements  in  this  broader  framework  that  mostly 
matter. Despite significant progress, the reform process in the region needs greater impetus. 

Stabilisation and Association Agreements and Autonomous Trade Measures 

Stabilisation  and  Association  Agreements  (SAAs)  establishing  free  trade  with  the  EU,  are 
currently  in  various  stages  of  negotiation  with  Albania,  Serbia  and  Montenegro,  as  well  as 
Bosnia  and  Herzegovina.  They  are  already  in  place  with  Croatia  and  the  former  Yugoslav 
Republic  of  Macedonia.  SAAs  constitute  powerful  engines  for  trade  integration,  domestic 
reform  and  rapprochement  to  the  EU,  not  least  through  their  clauses  which  encourage 
legislative approximation and the building up of administrative capacity. 

The  Autonomous  Trade  Measures  applied  to  the  whole  of  the  Western  Balkans  allow  duty 
free  access  to  the  EU  market  for  practically  all  products  originating  from  the  region.  These 

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trade preferences have proved successful, contributing to the average annual increase of 8% in 
the Western Balkans’ exports to the EU (2000-2004). They were recently renewed until the 
end of 2010.2  

The  Autonomous  Trade  Measures,  together  with  the  relevant  provisions  of  the  SAAs  and 
other  trade  arrangements,  provide  a  favourable  framework  for  the  development  of  trade 
between the EU and the region, thus stimulating foreign direct investment in the region and 
economic development in general.  

However, to take full advantage of this framework, countries need to further restructure their 
economies,  become  more  competitive  and  enhance  their  administrative  capacity.  Alignment 
on the main trade-related areas of the acquis, especially on customs and industrial, sanitary, 
phytosanitary and veterinary standards, as required under the European Partnerships, will play 
a key role in this respect. The Commission will continue to provide technical assistance to the 
region in this domain.  

Diagonal cumulation  

In  Thessaloniki,  the  Commission  was  invited  to  prepare  the  extension  of  pan-European 
diagonal  cumulation  of  origin  to  the  countries  of  the  region  in  a  manner  consistent  with  all 
relevant  Community  policies  and  dependent  on  their  administrative  capacity.  Pan-Euro 
cumulation is now being extended to the Barcelona process countries, thus creating the "pan-
Euro-Med"  cumulation.  Inclusion  of  the  Western  Balkans  into  this  new  system  is  the  EU´s 
strategic aim. 

Given the delay in the new system which would result from including new parties at this time, 
the Commission  is currently  preparing  a zone of diagonal cumulation of origin between  the 
EU and those countries in the Western Balkans which have a free trade agreement with the 
EU, currently Croatia and the former Yugoslav Republic of Macedonia. Given the number of 
parties concerned and the high level of regional integration, this initiative should soon start to 
deliver benefits. In a second stage, the Western Balkans could accede to the Pan-Euro-Med-
System  of  diagonal  cumulation  as  soon  as  this  new  system  proves  operational,  and  in 
accordance with the principles and procedures that apply to other non-EU participants in the 
system. 

Regional trade integration 

Regional trade integration is very important for the Western Balkans and a key element of the 
EU’s policy for the region. 

Considerable progress has been made in developing trade within the Western Balkans region. 
The network of bilateral Free Trade Agreements (FTAs) established under the Stability Pact 
has  been  completed.  As  a  result  of  this,  inter  alia,  mutual  trade  has  increased  substantially. 
However,  intraregional  trade  is  still  lower  than  its  potential  and,  in  some  cases, 
implementation  of  the  bilateral  agreements  has  not  been  satisfactory.  The  Commission  is 
ready  to  work  together  with  the  countries  of  the  Western  Balkan  in  order  to  identify  any 
obstacles  to  the  smooth  implementation  of  these  agreements,  as  well  as  to  find  ways  to 
overcome them. 

At their meeting in Sofia in June 2005, South-East European trade ministers began a process 
to integrate the existing network of bilateral free trade agreements into a single regional FTA, 

2 

Council Regulation (EC) No 1946/2005, 14.11.205, OJ L 312/2005. 

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to be concluded by mid-2006 with entry into force in 2007. They also agreed to implement a 
programme to reduce or eliminate non-tariff barriers and to work towards further harmonising 
regulations for trade in services. The Commission supports these initiatives and will continue 
to provide advice and technical assistance to allow intraregional integration to develop in full 
harmony with the movement towards European integration. 

WTO acccession 

The  Commission  strongly  supports  the  accession  of  Bosnia  and  Herzegovina,  Montenegro 
and Serbia to the World Trade Organisation (WTO). WTO membership is an important step 
in  the  economic  reform  process  of  any  country.  The  Commission  will  continue  to  provide 
technical assistance to that end. 

Tenders under assistance instruments  

In accordance with a commitment made in Thessaloniki, EC assistance regulations and rules 
have  been  amended  to  allow  operators  from  the  Western  Balkans  to  participate  in  tenders 
conducted  under  the  pre-accession  instruments.3  Similar  provisions  are  included  in  the 
Commission’s  proposals  for  the  new  pre-accession  financial  instrument  (IPA)  and  the 
European  Neighbourhood  and  Partnership  Instrument  (ENPI),  which  will  cover  Community 
assistance to the Union’s eastern and Mediterranean neighbours.4 

Small- and Medium-sized Enterprises 

Creating  favourable  conditions  for  Small-  and  Medium-sized  Enterprises  is  paramount  for 
sustained  growth  of  the  Western  Balkan  economies.  Reform  efforts  should  pay  special 
attention to this area.  

The  Western  Balkan  countries  joined  the  European  Charter  for  Small  Enterprises  on  the 
occasion  of  the  Thessaloniki  summit.  The  countries  of  the  region  have  been  reaping  the 
benefits of the Charter, though not all to the same extent.  

In the “Belgrade Declaration”, adopted in October 2005, the Western Balkan countries call on 
the  Commission  to  continue  the  Charter  process  beyond  the  three-year  horizon  of  the 
Thessaloniki  agenda.  In  response,  the  Commission,  in  close  cooperation  with  the  Austrian 
presidency, the OECD and with the European Training Foundation, will restart the process in 
2006 for another three years at least.  

The  Commission  supports  the  European  Fund  for  South-East  Europe  (EFSE),  which  was 
established  in  December  2005  by  international  and  national  donors  and  aims  to  provide 
additional  development  finance,  notably  to  the  small  and  micro-enterprise  sector  and  to 
private  households  via  local  financial  institutions.  The  Commission  plans  to  contribute 
approx. €60m to the Fund in 2006.  

Lisbon Agenda 

The Lisbon Agenda aims at making the EU economy more competitive and knowledge based, 
promoting  sustainable  development  and  social  cohesion.  Its  objectives  are  also  relevant  for 
the Western Balkans. The region should be involved gradually to achieving these objectives, 

3 
4 

Council Regulation (EC) No 769/2004, 21 April 2004, OJ L 123/2004. 
COM(2004) 627 and 628 final, 29.9.2004 (Articles 16 and 21, respectively) 

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taking  into  account  the  level  of  development  of  the  economies  and  their  stage  of 
rapprochement  to  the  EU.  The  Lisbon  objectives  will  not  constitute  additional  criteria  or 
economic objectives, but the Commission will ensure that its policies towards the region also 
reflect  Lisbon  activities  that  can  be  considered  priorities  under  the  European/Accession 
Partnerships. The Western Balkan countries should thus start taking into account the Union’s 
Lisbon objectives in their reforms.  

Social policy and employment 

Promoting  social  inclusion  and  integration,  notably  by  focusing  on  vulnerable  groups  and 
areas  most  affected  by  economic,  social  and  ethnic  unrest,  is  a  priority  for  the  Western 
Balkans.  The  Commission  encourages  the  development  of  social  dialogue  in  the  region, 
particularly  to  ensure  the  consultation  of  social  partners  in  the  process  of  economic 
transformation. The Commission organised a forum on social inclusion in Tirana in June 2005 
(together  with  the  UNDP)  and  a  high-level  conference  on  social  dialogue  in  Skopje  in 
October  2005.  The  Austrian  Presidency  and  the  Commission  will  organise  an  informal 
meeting of labour ministers and social partners of the Western Balkan countries in June 2006 
in Geneva. The Commission will further support efforts in this area. 

Country  reviews  on  employment  policy  carried-out  under  the  Stability  Pact-led  “Bucharest 
Process”, as well as labour market reviews prepared with the European Training Foundation 
are important for increasing the countries' strategic expertise and capacity. The Commission 
will build on these to develop its pre-accession co-operation in the field of employment.  

Visa policy and measures relating to the facilitation of movement of persons 

In Thessaloniki, the EU recalled the importance the peoples and governments in the Western 
Balkans  attach  to  the  perspective  of  liberalisation  of  the  visa  regime.  The  Union  noted  that 
progress  was  dependent  on  these  countries  implementing  major  reforms  in  areas  such  as 
strengthening  the  rule  of  law,  combating  organised  crime,  corruption  and  illegal  migration, 
and strengthening their administrative capacity in border control and security of documents. 
The Commission has discussed with each of the Western Balkan countries the requirements 
for  taking  these  issues  forward  in  concrete  terms  These  discussions  confirmed  that  the 
necessary  reforms  would  require  substantial  efforts  by  the  countries  in  question.  Lifting  the 
visa obligation is a long-term issue. 

Meanwhile, it should be possible to facilitate visa issuing procedures, which will make travel 
from  the  Western  Balkans  to  the  EU/Schengen  area  easier.5  The  Member  States  and  the 
Commission agreed in December 2005 on a common approach to visa facilitation, as foreseen 
by  the  Hague  Programme  adopted  in  November  2004.  A  case  by  case  approach  will  be 
applied.  The  special  relationship  the  EU  has  with  certain  countries,  notably  their  status  as 
candidates or potential candidates for accession, will be taken into account.  

In  this  context,  the  Commission  plans  to  start  exploratory  talks  in  the  Western  Balkans, 
starting with the former Yugoslav Republic of Macedonia in early 2006, in view of presenting 
to the EU Council draft negotiation mandates for Western Balkan countries in the course of 
the year. 

5 

Croatia is already on the visa free list. 

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Progress  in  negotiations  on  visa  facilitation  will  be  linked  to  negotiations  on  readmission 
agreements with the European Community and to progress in reforms in relevant areas. The 
Commission also plans to present, in spring 2006, a proposal aiming inter alia at simplifying 
and speeding up visa issuing procedures at local consulates. 

Special  measures  have  been  taken  to  promote  exchanges  of  researchers  and  students.  A 
directive which makes it easier for students from third countries to obtain residence permits in 
the European Union was adopted in December 2004, and a directive with equivalent rules for 
researchers was adopted in October 2005.  

Pending transposition of the directive on researchers into the national legislation of Member 
States,  a  Council  Recommendation  was  adopted  encouraging  the  Member  States  to  apply 
certain  parts  of  the  directive  in  advance  of  final  transposition.  Another  Recommendation 
aimed at facilitating short stays within the Schengen area of researchers was adopted by the 
Council in September 2005. This recommendation encourages Member States already now to 
grant  researchers  multiple-entry  visas  for  the  duration  of  the  research  project  they  are 
involved in, and to waive visa fees. 

The Commission has made a proposal for the establishment of a local border traffic regime at 
the  external  borders  of  the  Member  States.  Under  this  regime,  residents  of  border  regions, 
including along EU borders with Western Balkan countries, could be authorised to cross the 
border  with  a  local  border  traffic  permit,  without  requiring  a  visa.  Formal  adoption  of  the 
proposal (by the European Parliament and the Council) is expected by February 2006.6  

Familiarising people and institutions with the European agenda 

Participation in Community programmes and agencies 
Further to the Thessaloniki Agenda and to an ensuing Commission Communication,7 the legal 
basis  for  participation  by  individuals  or  institutions  of  Western  Balkan  countries  in 
Community programmes has now been put in place; the framework agreements concluded by 
the EU with each country entered into force in mid-2005.  

Involvement in Community programmes can give Western Balkan countries a firm foothold 
in the EU and facilitate the exchange of know-how and good practices. As from 2007, when 
most Community programmes are to be renewed or overhauled, the Western Balkan countries 
will have the opportunity to further involve themselves in common projects in areas such as 
environment, energy and transport, research, culture and media, etc.  

Community programmes are primarily internal programmes for the benefit of EU citizens and 
institutions;  their  extension  to  a  partner  country  is  subject  to  a  number  of  requirements, 
including  a  financial  contribution  and  administrative  capacities  on  their  side.  Therefore, 
countries must each assess their own needs carefully and select those programmes which best 
match  their  priorities  and  would  bring  real  value  added,  as  reflected  in  particular  by  the 
European  partnerships.  Implementation  should  be  gradual  and  be  supported  by  adequate 
preparation. 

6 

7 

Commission  proposal  for  a  Draft  Regulation  of  the  European  Parliament  and  of  the  Council  laying 
down rules on local border traffic at the external land borders of the Member States and amending the 
Schengen Convention [COM (2005)56, 23.2.2005]. 
Communication of the Commission “Preparing for the participation of the Western Balkan countries in 
Community programmes and agencies” [COM 748(2003), 3.12.2003] 

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The  Commission  has  also  followed  up  its  proposals  to  involve  the  Western  Balkans  in  the 
activities of Community agencies. Alongside ongoing networking into the main activities of 
the  European  Environment  Agency,  it  will  support  countries’  work  programmes  as  of  2006 
with a selection of Community agencies.8  

Education and research 

Cooperation with Western Balkan countries in the areas of education and research has been 
significant  in  recent  years,  with  a  substantial  Commission  contribution  under  several 
programmes:  Tempus  (higher  education),  Erasmus  Mundus  (scholarships  for  students), 
Youth,  6th  Research  Framework  programme  (FP6)  and  Joint  Research  Centre  (JRC) 
activities,  as  well  as  through  the  work  of  the  European  Training  Foundation  (ETF).  The 
Tempus  programme,  with  a  budget  of  €83m  for  the  period  2001–2005  in  the  Western 
Balkans, has funded scholarships and mobility grants involving up to 250 students and more 
than 1000 teachers and education staff each year for studies or training in the EU or elsewhere 
in  the  region.  In  2003-2004,  around  2200  young  people  from  the  region  participated  in  the 
Youth programme, more than twice as many as during the preceding three years9.  

An  Action  Plan  on  RTD  elaborated  following  the  Thessaloniki  summit  among  Member 
States, candidate and  Western Balkan  countries, identified  how research could contribute to 
economic development and enhance integration and was instrumental in integrating better the 
Western  Balkans  in  the  European  Research  Area.  From  2002  until  2005,  around  120 
participations (research units and institutions) from the Western Balkan countries have been 
recorded in 51 projects under the FP6.  

On  its  side,  the  Joint  Research  Centre  has  trained  in  the  past  years  some  hundreds  experts 
from  the  Western  Balkans  in  workshops  and  courses  and  has  started  including  Western 
Balkan organisations within its European research networks and projects. 

Responding  to  expectations  in  the  region  for  more  effort  in  these  sectors,  notably  in  the 
number of scholarships, the Commission will start consultations on a new set of orientations 
for the period 2006-2010 and intends to discuss them at the EU/Western Balkan Meeting of 
Ministers of Science and Education on 17 March 2006. This Conference will also be a good 
opportunity  for  Member  States  to  provide  information  on  their  bilateral  programmes  and 
possibly commit themselves to intensifying their already significant effort. 

The  Commission  will  review  its  actions  under  Tempus  and  Erasmus  Mundus  and  expand 
opportunities for mobility of teachers and both undergraduate and graduate students as from 
2007. As a first step, a special window will be made available in 2006 in Erasmus Mundus to 
allow up to 100 students from the region to undertake postgraduate studies in EU high profile 
master’s  courses.  The  Commission  will  also  propose  a  new  scholarship  scheme  for 
undergraduate  students  within  the  post-2006  Tempus  programme.  With  regard  to  the  post-
2006  successor  Community  programmes  to  the  current  Socrates  and  Leonardo  da  Vinci, 
gradual involvement will be encouraged, tailored to the needs and constraints of each country, 
including  the  advanced  administrative  capacity  required  for  these  programmes.  The 
Commission  will  also  create  new  opportunities  under  the  Youth  programme.  The  ETF  will 
continue to support Western Balkan partner countries in promoting reform of their education 
and training systems. 

8 
9 

Actions under the PHARE and CARDS 2005 programmes 
On an annual average basis. 

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As  regards  research,  the  EU  plans  to  continue  and  strengthen  its  actions  in  favour  of  the 
Western  Balkans  research  community  under  the  7th  Framework  Programme  (2007-2013). 
Existing  fruitful  cooperation  between  the  JRC  and  Western  Balkans  countries  will  be 
continued. The Commission will also examine how to enable the research community in the 
region  to  tap  this  potential  and  might  provide  support  for  building  capacities  of  centres  of 
excellence in the region. To further integrate the region into the European Research Area, the 
Commission is considering establishing a ‘Steering Platform’ which would identify concrete 
needs and means to satisfy them. 

Preparing the administrations for European integration 

Developing  the  Western  Balkan  countries’  administrative  and  judicial  capacity,  while 
ensuring early alignment with Community legislation, is of paramount importance. 

Twinning projects involve the long-term secondment of Member State experts and advisors to 
the  target  countries’  administrations  to  assist  efforts  to  increase  administrative  and 
institutional  capacity.  Such  projects  for  the  Western  Balkans  have  expanded  from  25  in  the 
period 2000-2002 to 40 new projects in 2003-2005. Extension of the twinning instrument to 
Kosovo is presently under consideration. 

The Technical Assistance Information Exchange Instrument (TAIEX) began operations in the 
region in 2004 and, by the end of 2005, it had organised over 300 assistance actions, targeting 
over  6000  officials  from  central  state  administrations,  business  associations,  judiciary  or 
parliamentary  administrations.  Following  a  first  phase  consisting  of  multi-country 
introductory seminars on EU legislation in Brussels, a more demand-driven approach is now 
being implemented in the region itself, reaching a wider audience. 

Preparatory  work  by  the  Commission  for  the  establishment  of  a  regional  School  for  Higher 
Education in Public Administration Reform, as provided for in the Thessaloniki Agenda, has 
been making progress. The first actual training under this scheme should take place before the 
end of 2006. 

The EU will continue its customs and fiscal assistance programmes (CAFAO) and will start 
reflecting on medium and long term alternatives to these which would enhance the ownership 
of the local administrations.  

Supporting free, independent and professional media 

The development of free, independent and professional media is a key element to sustaining 
stability  and  functioning  democracies  in  the  Western  Balkans.  Increasing  awareness  of 
European  media  standards  in  the  region  and  accelerating  necessary  reforms  in  the  media 
sector are important priorities.  

The Commission, in cooperation with the Council of Europe, launched a regional initiative on 
media  reform  in  2004,  bringing  together  representatives  of  governments,  broadcasting 
regulatory authorities, public broadcasters and other stakeholders. Three regional events have 
taken  place  so  far  (in  Belgrade  and  Skopje  in  2004,  and  in  Sarajevo  in  2005).  Within  this 
initiative,  the  Western  Balkan  countries  signed  Protocols  of  Cooperation  between  their 
broadcasting  regulatory  bodies  and  their  public  broadcasters.  The  Commission  will  pursue 
this regional initiative in 2006, providing support to the countries in their efforts to advance 
towards European standards.  

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Regional cooperation 
Significant  progress  can  be  recorded  in  regional  cooperation.10  Countries  are  increasingly 
aware that regional cooperation is not only a key part of the EU’s conditionality, but it serves 
their own interest and has already produced tangible results. The complementarity of regional 
cooperation with the European integration process has been better understood.  

Since the Thessaloniki Summit, the regional cooperation agenda has moved forward, with the 
valuable contribution of the Stability Pact and other regional initiatives. Cooperation is now 
underpinned by a number of centres hosted in the region, which reflect enhanced ownership - 
the  Transport  Observatory  in  Belgrade,  the  Sava  River  Commission  in  Zagreb,  the  Energy 
Secretariat  in  Vienna,  the  Regional  Centre  of  the  Migration,  Asylum,  Refugees  Regional 
Initiative (MARRI) in Skopje, etc. 

It is now important to pursue implementation of what has been initiated, to focus on concrete 
results and to meet a number of challenges which lie ahead. More specifically:  

– 

– 

– 

– 

– 

Return of refugees has long been an important matter for a regional focus; it has now 
moved into a new phase through the Sarajevo Declaration of January 2005 by which 
Bosnia  and  Herzegovina,  Croatia  and  Serbia  and  Montenegro,  supported  by  the 
Commission  and  other  international  stakeholders,  committed  themselves  to  joining 
forces to resolve this issue before the end of 2006. 

In the area of justice, freedom and security, many initiatives have been pursued in the 
fight  against  organised  crime  and  in  border  management.  Key  challenges  for  the 
coming period include: further improvement of the trans-border cooperation capacity 
of  the  police  and  customs  services,  support  for  the  SECI  Regional  centre  for 
combating  trans-border  crime  and  build-up  of  operational  regional  prosecutor 
cooperation  in  organised  crime  cases  and  corruption-related  crimes.  The  regional 
project  on  asylum,  migration  and  visa  policies,  recently  finalised,  should  now  be 
followed up with the requisite measures at national level. 

Parliamentary  cooperation  has  been  substantially  improved  with  the  newly 
established  Conference  of  the  Committee  on  European  Integration  of  the  Western 
Balkan  Parliaments  and  the  Cetinje  Parliamentary  Forum.  Developing  a  common 
strategy for SEE parliaments, focused on EU integration, is the next step, to provide 
a parliamentary dimension to a comprehensive framework giving political guidance 
to the cooperation activities. 

Energy  counts  for  one  of  the  most  encouraging  developments,  as  the  “Athens 
process”  culminated  with  the  signature  of  the  Energy  Community  Treaty  on  25 
October  2005  between  the  EU  and  partners  in  the  region,  creating  the  basis  for  a 
single  regulatory  energy  space.  Subject  to  ratification,  the  Treaty  could  enter  into 
force in the first half of 2006, making it possible to move on to implementation. The 
EU  will  increasingly  focus  on  ensuring  interconnections  of  international  energy 
networks, including pipelines, in the region. 

Cooperation in land transport is moving forward on the basis of the Memorandum of 
Understanding  on  the  development  of  the  South  East  European  Core  Regional 
Transport  network  signed  in  June  2004.  An  agreement  on  a  European  Common 
Aviation  Area  was  initialled  by  the  countries  of  the  region  and  the  European 

10 

Regional cooperation in trade is addressed above. 

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– 

– 

Commission  in  December  2005  and  procedures  for  its  signature  will  be  launched 
shortly. 

Regional  environmental  cooperation  has  been  established,  with  the  Commission 
playing a key role in the development of the Regional Environmental Reconstruction 
Programme, which provides a framework for environmental actions to be pursued at 
regional level. All the countries of the region are involved in this process, as well as 
in the Environment Compliance and Enforcement Network for Accession (ECENA). 

The  Commission  contributes  to  the  protection  and  preservation  of  the  cultural 
heritage  in  the  Western  Balkans  through  the  programme  for  Cultural  and  Natural 
Heritage in South-East Europe that it runs jointly with the Council of Europe. More 
than 160 monuments and sites will be restored or rehabilitated under this scheme. In 
Kosovo,  the  Commission  is  financing  the  restoration  of  religious  sites  damaged 
during the violent events of March 2004. 

The  European  Union’s  engagement  in  regional  cooperation  will  intensify  in  the  future, 
because of the close connection of regional cooperation with European integration. The region 
as  a  whole  is  gradually  being  associated  with  key  European  policies  such  as  trade,  justice, 
freedom  and  security  (see  above),  transport,  energy  and  cross-border  cooperation.  The 
Commission is already making a decisive contribution in several areas and is standing ready 
for  enhanced  involvement, in the first place in areas where regional cooperation contributes 
directly to and is indispensable for the European integration agenda.  

Over the last six years, profound changes have taken place in the region, not least with regard 
to its progress towards the EU. The time has now come to move towards full local ownership 
of  regional  co-operation  and  to  revisit  the  role  of  the  Stability  Pact.  A  gradual  transition 
should  ensure  that  key  functions  of  the  Stability  Pact  are  transferred,  with  clear  priority-
setting  and  a  streamlining  of  arrangements.  An  increased  role  could  be  envisaged  for  the 
South-East Europe Cooperation Process (SEECP), which the Thessaloniki Summit recognised 
as  the  voice  of  the  region.  To  take  on  this  role  the  SEECP  needs  an  overhaul.  The 
Commission is closely cooperating with the Pact and other stake-holders in view of decisions 
to be taken at the May 2006 Regional Table. 

Financial assistance 

EU financial assistance to the Western Balkan countries under the CARDS programme aims 
to support their efforts to enhance political and economic reform and development, on their 
path towards EU membership. As a candidate country, Croatia has benefited since 2005 from 
pre-accession  assistance  under  the  Phare,  ISPA  and  SAPARD  programmes.  The  European 
Investment  Bank  provides  loans  for  infrastructure  projects.  The  European  and  Accession 
Partnerships  are  the  main  guidance  for  assistance  under  the  CARDS  and  pre-accession 
instruments. 

Community  assistance  to  the  region  is  significant.  For  the  period  2000-2006  grants  to  the 
region total around €5.4bn. The EIB is providing loans of some €2.0bn. In per capita terms, 
and as a share of beneficiary countries’ GDP, this assistance is among the highest received by 
any of the EU’s partners. Although assistance to the region was frontloaded at the beginning 
of  this  decade  in  order  to  cope  with  post-conflict  reconstruction  and  rehabilitation,  present 
levels of support continue to be high. With reform in Kosovo a priority, the Commission has 
reallocated an additional €25m to it, for implementation in 2006. Over the period 2000-2006 
the EC has also provided exceptional macro-financial assistance to all countries of the region, 
except Croatia, totalling €873 m. 

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The  new  Instrument  for  Pre-Accession  (IPA),  which  will  replace  the  existing  pre-accession 
instruments and CARDS from 2007 onwards, will cover assistance to candidate and potential 
candidate countries. It will thus simplify the transition of a country from one status to another, 
when this is decided  by  the  Council.  The instrument’s components which finance  transition 
and  institution  building  as  well  as  regional  and  cross-border  cooperation  will  be  open  to 
potential  candidate  and  candidate  countries.  The  remaining  three  components  (financing 
regional  and  human  resources  and  rural  development)  are  pre-cursors  to  the  Community 
structural funds, require a high degree of financial administration capacity adapted to the EU 
system  and  are,  therefore,  reserved  for  candidate  countries.  Transition  to  the  status  of 
candidate country will open access to the three ‘structural’ components of IPA, although this 
will not automatically mean an increase in the level of support to the country in question. 

Assistance in the areas of infrastructure, regional development and labour and social policies 
will also be available to potential candidates through the institution-building component. Such 
aid  will  initially  be  managed  centrally  by  the  Commission.  In  addition  to  IPA,  other 
instruments (e.g. the Stability Instrument)  may be required to address security challenges in 
the region. Additional macro-financial assistance may also be required in exceptional cases. 
An operation in favour of Kosovo is likely to prove necessary.  

The Commission remains committed to supporting the Western Balkans with adequate funds. 
The  EU  must  ensure  that  its  policy  priorities  for  the  Western  Balkans  are  backed  by 
commensurate support under the next Financial Perspectives. 

While  the  Western  Balkans  move  from  reconstruction  to  economic  development  and 
integration, support in the form of lending by international financial institutions (EIB, EBRD, 
World  Bank,  IMF,  etc.),  takes  on  a  bigger  role.  For  example,  the  decision  to  increase  the 
European Investment  Bank’s  external lending mandate (from €1.6 to more  than €3bn) is  an 
important  signal.  The  Commission  will  continue  to  seek  close  coordination  with  other 
bilateral  and  international  donors  to  enhance  synergies,  as  in  its  joint  lead  with  the  World 
Bank on the coordination of infrastructure projects.  

Civil society dialogue  

In  the  light  of  experience  from  the  most  recent  enlargement,  the  European  Council  in 
December  2004  decided  that  the  EU  would  engage  in  an  intensive  political  and  cultural 
dialogue  with  candidate  countries,  involving  civil  society.  In  June  2005,  the  Commission 
adopted  a  Communication  containing  proposals  to  promote  this  civil  society  dialogue  with 
Turkey and Croatia, involving in particular social partners and NGOs;11 a related project for 
Croatia will be financed by the Phare 2006 programme. 

The  Commission  now  proposes  to  extend  civil  society  dialogue  to  all  Western  Balkan 
countries. In addition to the proposals presented in its Communication for candidate countries, 
the  Commission  will  put  particular  focus  on  dialogue  between  Western  Balkan  societies.  A 
special  effort  should  be  undertaken  to  encourage  civil  society  development  in  each  country 
and a culture of civil society consultation. 

11 

COM(2005)290 final, 29.6.2005. 

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--III-- 

Conclusions 

The  Council  and  Parliament  are  invited  to  take  note  of  the  following  conclusions.  The 
stability, security and increasing prosperity of the Western Balkans are a high priority for the 
European  Union.  Reconfirming  their  European  perspective  will  be  particularly  important  in 
the context of the Kosovo status process and when other constitutional issues in the region are 
being addressed.  

The joint agenda agreed between the EU and the countries of the Western Balkans at the 2003 
Thessaloniki  Summit  has  largely  been  implemented,  and  further  progress  is  forthcoming. 
Further  efforts  to  promote  its  objectives  will  bring  additional  benefits.  The  economic  and 
social  agenda  and  reforms  for  approaching  European  standards  are  now  particularly 
important. 
– 

As means to promote trade, investment and economic and social development:  

– 

– 

– 

– 

– 

– 

– 

– 

– 

Stabilisation  and  Association  Agreements  are  being  negotiated  with  Serbia  and 
Montenegro  and  Bosnia  and  Herzegovina,  and  such  negotiations  are  nearing 
conclusion  with  Albania.  The  Autonomous  Trade  Measures  have  been  extended  to 
2010. 

The  Commission will prepare a zone of  diagonal cumulation  of origin between the 
EU  and  the  countries  of  region  that  have  free  trade  agreements  with  it,  while 
inclusion  in  the  Pan-Euro-Med  System  remains  the  EU’s  strategic  aim  as  a  second 
step. 

The Commission supports rapid conclusion of a regional Free Trade Agreement and 
will provide advice and technical assistance to that end.  

The  Commission  will  prepare  for  the  implementation  of  the  Energy  Community 
Treaty, scheduled to enter into force in the first half of 2006. 

The process under the European Charter for Small Enterprises will be restarted, and 
the  Commission  will  contribute  financially  to  the  European  Fund  for  South-East 
Europe. 

The  objectives  of  the  Lisbon  Agenda  will  be  reflected  in  the  EU’s  policies  for  the 
region  and  the  countries  are  encouraged  to  take  these  into  account  in  their  reforms 
and action plans. 

The  Commission  will  continue  to  support  activities  promoting  social  inclusion  and 
integration and social dialogue 

The Commission will put forward initiatives for visa facilitation in 2006. Measures 
facilitating  travel  by  researchers  and  students,  as  well  as  local  border  traffic  along 
EU borders with the Western Balkan countries are about to be implemented. 

Scholarships provided to undergraduate and graduate students and researchers from 
the region through a number of EU-financed programmes and institutions will further 
increase.  Western  Balkan  citizens  and  institutions  should  be  encouraged  to  step  up 
their  participation  in  Community  programmes  and  in  activities  of  Community 
agencies.  They  should  in  particular  take  advantage  of  new  opportunities  arising  in 
2007 with the renewal of many of these programmes. 

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– 

– 

– 

– 

Support  for  institution  building  through  twinning  and  the  Technical  Assistance  and 
Information  Exchange  Instrument  will  be  strengthened.  A  new  regional  School  for 
Higher Education in Public Administration should start its training activity in 2006.  

The countries of the Western Balkans should acquire greater ownership of regional 
cooperation.  There  should  be  a  progressive  transfer  of  the  responsibilities  of  the 
Stability Pact to bodies based in the region. Priority areas for the coming period are 
trade, refugee return, parliamentary cooperation, energy, transport, environment, the 
area of justice, freedom and security, and the protection and preservation of cultural 
heritage.  

The EU should ensure that its policy priorities for the Western Balkans are matched 
by  commensurate  support  under  the  next  Financial  Perspectives.  Under  the  new 
Instrument  for  Pre-accession  Assistance,  support  for  infrastructure,  regional 
development  and  labour  and  social  policies  will  be  available  also  to  potential 
candidates through the institution-building component of IPA.  

Civil  society  dialogue  in  which  the  Commission  has  engaged  with  candidate 
countries will be extended to the whole of the Western Balkans.  

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