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
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 fields of transport, energy and the sub-regional level - sustainable ecologically trade tel~communications development, and justice and home affairs. in particular in co-operation, networks, 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 MECU1 2 - 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 •. -----,i. ~ !:tz:{ f =- ~ '-, Ionian Sea Mediterrc1nee1/J ~. Sea Cyprus. fHicoa~;:·:J·. t--:). '-. , (+f@ffl#l 111 Dltl I I I l I I I I I I I I I I I IHtl Im 11 p 11 0. )~ ,, w ~:Yt!I I Ill !II 11111111111 lrta~~:n I Soc:t1i w. § ·1 Black Sea 0 \ 0 Tabriz • Iran • \ \ Klllruk • Iraq· i ) c=J Member state of the Black Sea Economic Co-operation (BSEC) I > '. ::>) Member state of the European Union (EU) c=J Other countries ~ EU member state - member state of the BSEC Contractual relatlon• with the European Union Europe agreement Customs union Association agreement Partnership and co-operation agreement Co-operation agreement Size of main cities • 0 • > 5 millions inhabitants 1 to 5 millions inhabitants Other important city Athens State Capital Population of the BSEC member states * (size of Icons proportionate to the population (millions of habitants) In 1992) 149 59 23 10 4 Population change (annual variation rates, forecasts for 1992-2000) • - Increase > 1 % ~ Increase of 0,2% to 1 % C=:J Stable (-0,2 % to +0,2%) C==:J Decrease> -0,2% • Soun:v · World #Jani< ISSN 0254-1475 COM(97) 597 final DOCUMENTS EN 11 13 02 Catalogue number CB-C0-97-612-EN-C ISBN 92-78-27528-X -· -··-· ·--··- ···--- ·------ --. - -. -· ----·---. ·--··-·-··--·•--- - · - - - - - Otlice for Otlicial Publications of the European Communities L-2985 Luxembourg