Cablegate: Stability Pact Meetings in Bucharest Focus On
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PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBM #1808/01 3381343
ZNR UUUUU ZZH
P 041343Z DEC 06 ZDK
FM AMEMBASSY BUCHAREST
TO RUEHC/SECSTATE WASHDC PRIORITY 5663
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHOT/AMEMBASSY OTTAWA PRIORITY 0739
RUEHKO/AMEMBASSY TOKYO PRIORITY 0096
RUEHBS/USEU BRUSSELS PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
UNCLAS SECTION 01 OF 05 BUCHAREST 001808
SIPDIS
SENSITIVE
SIPDIS
USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH BRUSSELS PASS TO
STABILITY
DEPT FOR EUR/NCE AARON JENSEN
E.O. 12958: N/A
TAGS: EAID ECON ETRD EUN PREL BK BU GR HR MD MI
MW, SR, YI, RO
SUBJECT: STABILITY PACT MEETINGS IN BUCHAREST FOCUS ON
TRANSITION TO REGIONAL OWNERSHIP
REF: A. BELGRADE 900
B. SECSTATE 177440 NOTAL
SUMMARY
---------------
1. (SBU) The November 15-16 meetings in Bucharest of the
Stability Pact for South East Europe saw continued progress
toward shifting the Pact's program of regional cooperation
initiatives to the responsibility of regional governments
under the umbrella of the South East Europe Cooperation
Process (SEECP). The transition of a slimmed-down Pact
agenda to regional ownership and leadership was supported
both by the countries of the region and a number of
potential donors, who signaled a willingness to finance the
proposed Regional Cooperation Council (RCC), which will
assume responsibility for the
regional cooperation program beginning in early 2008.
Prior to the Bucharest meetings, SEECP governments agreed
on a financing mechanism to share up to one million Euros
of the anticipated annual 2.5-3.0 million Euro cost of the
RCC secretariat, while at the November 16 Regional Table
meeting indications of support were given by
representatives of the European Commission, Austria,
Switzerland, Germany, Norway, and the U.S. The Pact's
three Working Table meetings (on Democracy, Economic
Development and Security issues) presented plans to reduce
the number of Pact-sponsored initiatives and task forces
to ensure that future RCC activities responded to the
region,s evolving needs and priorities.
2. (SBU) Topical issues dominating RT discussion included
CEFTA amendment/enlargement and inclusion of Kosovo in
regional cooperation activities. On CEFTA, donor and some
regional government representatives pressed for an
inclusive agreement, implicitly pushing Croatia, BiH and
Serbia to resolve their remaining bilateral issues so that
BiH and Serbia will be able to join the eight parties that
initialed the agreement on November 9 in formally signing
in Bucharest on December 19. The host Romanian government
was not represented at the ministerial level at the
November 16-17 meetings, due in part to the fact that the
Romanian President and Prime Minister were traveling
together with high-level delegations at this time.
Looking ahead, the next major milestone in the Stability
Pact's transition to regional ownership and leadership will
come in late May-early June 2007, when SEECP Prime
Ministers meet in Croatia to approve formally
the creation of the RCC, decide its location and Secretary
General, and receive the endorsement of the Stability
Pact's final Regional Table meeting. Final implementation
of the transition plan should conclude with the formal
establishment of the new RCC structure in early 2008. END
SUMMARY.
-----------------------------------
Regional Ownership Moving Ahead
-----------------------------------
3. (U) The Stability Pact held its semi-annual Regional
Table meeting in Bucharest on November 16, following
meetings of its three Working Tables on the preceding day.
The Stability Pact, created in June 1999 with the
goal of contributing to reconstruction and stabilization of
the Balkans, currently oversees 25 regional cooperation
initiatives and task forces. At the May 2005 Regional
Table meeting in Sofia, Specal Coordinator Erhard Busek
launched a discussio on phasing out the Pact while
ensuring that prioity regional cooperation activities
continued inkey areas, principally in economic
development, ustice and home affairs, and reinforcing
politicl consensus for reform. The May 2006 meeting inBelgrade endorsed the priorities and timetable,
establishing the goal of a transition by February 2008 to
creation of a Regional Cooperation Council under the
auspices of the Southeast Europe Cooperation Process
(SEECP) to continue the Pact,s regional cooperation agenda.
The key cooperation themes identified by the Pact were
economic and social development, infrastructure and energy,
justice and home affairs, defense cooperation, building
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human capital, and regional parliamentary cooperation.
Pact Secretariat staff have subsequently reviewed all
initiatives and task forces internally and with regional
government representatives in an effort to set priorities
and to generate regional government financial support where
required, particularly with regard to such activities as
the regional anti-corruption initiative (SPAI) and disaster
preparedness and prevention initiative (DPPI), both of
which are based in Sarajevo and have received US financial
support.
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Working Tables: Setting Priorities for the Future
--------------------------------------------- ----
4. (U) Working Table I (Democratization and Human Rights)
discussed building human capital (BHC), parliamentary
cooperation (PC) and gender issues, with a focus on
streamlining and ownership. The BHC discussion stressed
that education and research should remain a long-term
priority for regional cooperation and recommended that a
task force be established within the RCC. WT I welcomed
the readiness of the regional education initiative (ERI
SEE) to take over the education component of BHC, and
stressed the need to strengthen cooperation in research.
It also solicited proposals for establishment of a regional
secretariat for parliamentary cooperation, to be
SIPDIS
in place by mid-2007. Its task would be to coordinate the
exchange of information among SEE Parliaments, in
particular at the committee level, and possibly also the
training of parliamentary staff, working also with
counterparts outside the region. The Gender Taskforce, with
a small secretariat based in Zagreb and already
self-sufficient in terms of management and operations, will
maintain a formal relationship with and receive political
support from the RCC in order to encourage mainstreaming of
gender issues into regional co-operation activities. WT I
noted that the local democracy/cross-border cooperation
(LODE/CBC) task force would shift from the SP Brussels
Secretariat to the SP Thessaloniki office (funded by
SIPDIS
Greece) by the end of 2006, though its LODE component will
be transferred to Council of Europe leadership under an
existing mandate. As previously agreed, the Media TF will
close by the end of 2006. WT I recommended that the RCC
offer political support to an active role for civil society
in the process of Euro-Atlantic integration.
5. (U) Working Table II (Economic Reconstruction and
Development) reviewed transition strategies for WT II
initiatives, many of which will continue under the
framework of the RCC and will need political, technical and
financial support from both the SEE parties and
international donors. Participants called for the social
dimension to be addressed as economic reform proceeds. The
meeting reviewed the challenges facing key energy and
transport infrastructure initiatives, which will require
substantial investment, and underlined the importance of
the Infrastructure Steering Group. WTII welcomed the
recent publication by the OECD-led Investment Compact for
South East Europe of the Regional Investment Reform Index
(IRI), highlighting performance across a number of
dimensions relevant to the business climate. The role of
the proposed SEE Investment Committee in maintaining the
IRI and the use of peer reviews to stimulate progress was
judged to be an effective way to enhance regional
ownership. WT II also noted the Greek proposal for
development of the Thessaloniki office into a center for
the promotion of regional investment and business activity
in the framework of the RCC. Finally, WT II welcomed
progress made toward completing an amended and enlarged
Central European Free Trade Agreement (CEFTA 2006), though
the failure of Serbia and Bosnia to join the other eight
parties in initialing the agreement on November 9 was
noted. Participants called on all parties to work to
ensure that all ten can sign on December 19 in Bucharest.
6. (U) Working Table III (Security Issues) dealt with
transition strategies for the initiatives dealing with
defense and security cooperation, as well as justice and
home affairs cooperation. The discussion centered on
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impediments to the transfer to regional ownership posed by
inadequate funding, staffing and political support. The
participants cited the need for stronger political support
from SEE governments, with the backing of the
international community, as well as increased financial
contributions from SEE countries for WT III initiatives.
WT III also for called stronger support through the
secondment of qualified staff to work on these
initiatives. Strong interest was expressed in enhanced
regional cooperation on security and defense and JHA issues
outside the context of the SP. Special Coordinator Busek
said that security is a common interest and responsibility,
and that cooperation in the areas of security/defense and
justice and home affairs would be two of the five
priorities of the RCC. Busek urged action on the convention
on the SECI Regional Center for Combating Trans-border
Crime, and invited SEE governments to exploit
the Center's potential as a tool in fighting trans-border
organized crime and as an interface for cooperation with
European and international law enforcement authorities.
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Donor Support for the RCC
-----------------------------------------
7. (U) Donor representatives stressed the importance of
regional cooperation and voiced support for the Stability
Pact,s transition to regional ownership. Responding to the
agreement on RCC co-financing reached by SEECP members
in October, Austrian SP national coordinator Sajdik pledged
150,000 euros to support the RCC, subject to approval by
the new Austrian government when it is formed. Other
statements of support were made by representatives of
Switzerland, the European Commission, Germany and the US.
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U.S. Participation
--------------------
8. (U) Leading the U.S. delegation to the November 16
regional Table meeting, Coordinator for US Assistance to
Europe and Eurasia Thomas Adams pledged continuing U.S.
commitment to the stability and prosperity of Southeastern
Europe. He noted that the U.S. would continue to support
the Stability Pact through its final year before transition
to regional ownership in early 2008, and signaled US
support for the RCC provided it is located in the region.
Mr. Adams also called attention to the political challenge
posed for the region by the impending decision on Kosovo,s
status, and underlined the importance of full support by
all countries in the region for the process led by Special
Envoy Ahtisaari.
--------------------------------------------- ----
Croatian and Bulgarian SEECP leadership through 2008, Role
of EC
--------------------------------------------- ----
9. (U) The SEECP, long a talk shop with little impact, has
been challenged by the Stability Pact transition process to
play an active role as a focal point for regional
cooperation. Croatian Prime Minister Sanader has indicated
personal support for a stronger SEECP and named MFA State
Secretary Hido Biscevic, who attended the Bucharest
SIPDIS
meetings, as coordinator for Croatia,s 2006-7 SEECP
chairmanship-in-office. The Croatian government
used an informal conference of key regional representatives
in early September in Zagreb under the auspices of the
SudostEuropa Gesellschaft and German MFA State Secretary
Erler, to launch a concerted effort on the Pact,s
transition, and later co-chaired meetings with the
Stability Pact of SEECP finance ministry representatives to
develop a funding key for the SEECP share of the cost of
the proposed RCC secretariat. Financial experts agreed
on October 27 in Vienna to a formula based on four country
groups: Turkey, Greece, Romania and Bulgaria will each pay
14 percent (or $140,000) of the proposed total of up to one
million euros, Croatia will pay eight percent
(80,000 euros), Albania, BiH, Macedonia, and Serbia six
percent (60,000 euros), and Moldova, Montenegro, and
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UNMIK/Kosovo four percent (40,000 euros).
10. (SBU) SEECP governments face difficult decisions on
the location of the RCC secretariat. Sarajevo and Belgrade
have been proposed, though neither has yet won strong
support. SP planners are pushing for an early decision
on location of the secretariat to facilitate RCC budget
decisions and legal arrangements. The SEECP will also have
to decide on the RCC leadership, looking for an influential
regional political figure to push the regional
cooperation agenda at the highest circles of regional
governments. This will be no easy task. The names as
former foreign ministers Simon Passy of Bulgaria and Goran
Svilanovic of Serbia (and present WT I Chair) have been
mooted thus far, though Passy has apparently declined to
pursue the position.
11. (SBU) A second major issue is the extent to which the
European Commission will play a leadership role as the SP
transition proceeds. (Note: Currently, the EC funds the
Stability Pact Secretariat in Brussels at the level of 2
million euros annually; SP leadership hopes the EC will
maintain perhaps two-thirds of that level for the RCC.)
Busek will meet with Enlargement Commissioner Rehn later
this month and with DG Michael Leigh in early December to
press for a substantial EC commitment to the RCC. Busek
hopes that EU member states will also make commitments to
provide significant support to the RCC in the weeks ahead.
--------------------------------------------- ----------
Comment: Signs of progress, but no time for complacency
--------------------------------------------- ----------
12. (SBU) The Stability Pact transition is advancing
slowly but surely. The financial down payment by the SEECP
for the proposed RCC secretariat is a clear indication of a
more serious approach by regional governments and
agreement on a location -- most likely Sarajevo -- is
likely to come in due time. The regional cooperation
agenda includes a number of successes which
are important to the region,s development. These include:
the Energy Community Treaty, in force since July; the
prospect of completing the expanded CEFTA 2006, building on
the existing network of 32 bilateral free trade agreements;
progress on a regional approach to investment and
infrastructure; possible integration into the European
Common Aviation Area; and strengthening of the SECI
Regional Center for Combating Trans-border Crime in
Bucharest. These varied initiatives, taken together, are
beginning to send a political signal to the outside world,
including to investors, that the region has moved into the
21st century and has broken definitively with the strife
and discord of the previous decade.
13. (SBU) But there are a number of remaining concerns.
Deciding on a political figure to head the RCC could be a
daunting task. Horse-trading will probably continue until
the last minutes before a decision is taken at the SEECP
summit in spring 2007. More fundamentally, tensions
between countries in the region -- reflected, for example,
in the problems which have arisen between Serbia, Bosnia
and Croatia in the CEFTA 2006 endgame -- continue to hinder
regional cooperation. While settling Kosovo,s status will
contribute to the long-term stability of Southeastern
Europe, in the short run the status decision may complicate
efforts to foster cooperation between some of
the parties in the region. However, increasing cooperation
between EU aspirants in the western Balkans, on one hand,
and neighboring EU member states, on the other, is
potentially an important stabilizing factor. In
this regard, Bulgaria,s enthusiastic interest in managing
the final stage of the Stability Pact,s transition during
its year-long SEECP Chairmanship, which begins in June
2007, is an encouraging development. Lastly, the upcoming
EU Presidencies of Germany and Slovenia (first semester
2007 and 2008, respectively), promise steady pressure from
that quarter (on the region and on the European Commission
itself) to support establishment of the RCC, and should
help maintain a strong EU focus on stability in
Southeastern Europe. End Comment.
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TAPLIN