Macro-financial assistance to Georgia - Macro-financial assistance to Armenia - Macro-financial assistance to Serbia - Macro-financial assistance to Bosnia and Herzegovina (debate) 
President
The next item is the joint debate on:
the report by Mr Moreira, on behalf of the Committee on International Trade, on providing macro-financial assistance to Georgia - C7-0269/2009 -
the report by Mr Moreira, on behalf of the Committee on International Trade, on providing macro-financial assistance to Armenia - C7-0268/2009 -
the report by Mr Ransdorf, on behalf of the Committee on International Trade, on providing macro-financial assistance to Serbia - C7-0270/2009 -
and
the report by Mr Winkler, on behalf of the Committee on International Trade, on providing macro-financial assistance to Bosnia and Herzegovina - C7-0278/2009 -
Vital Moreira
Madam President, Commissioner, ladies and gentlemen, as this is the first time that I have spoken in front of a plenary sitting of the European Parliament, permit me to greet you all and express my pleasure, enthusiasm and sense of dedication at participating in this assembly, which represents all European citizens.
As for the task that has brought me here, I am to present before you today two reports on the allocation of macro-financial assistance to Georgia and Armenia, which are aimed at alleviating the fiscal problems and external accounts of both these Caucasian countries. Both of these countries are our partners under the European Neighbourhood Policy, and have been severely hit by the global economic and financial crisis of the last two years.
In the case of Georgia, the impact of the crisis has been exacerbated by the direct and indirect consequences of the military conflict that occurred last year with Russia, including a large number of people who were displaced within the country.
The economy of neighbouring Armenia has also been affected by the combination of the economic recession and, in particular, the rapid deterioration of the Russian economy, due to the great dependence of the Armenian economy on trade with its large neighbour to the north. This pushed these two countries towards a very difficult economic, financial and social situation.
The two proposals for exceptional financial assistance that we are discussing today will reduce the budgetary deficit and have an immediate positive impact on the public finance and the balance of payments of Georgia and Armenia, provided that they are implemented with immediate effect. For this reason, our two reports fully support the need to secure this financial assistance for Georgia and Armenia.
Moreover, in my capacity as Chairman of the Committee on International Trade, I proposed to my colleagues on the Committee that they approve these two proposals without amendments, under the simplified procedure, and the proposal was approved unanimously.
However, in the reports which we presented before the plenary, we registered a complaint about the delay and the short time which the Commission granted us to discuss these agreements. In the future, we will consider such delays unacceptable, although we acknowledge the inevitability of swifter processing for these types of issues, given their exceptional nature.
Our position on this matter does not mean that my colleagues or I do not have our reservations and concerns about the proposed agreements themselves. It is, moreover, likely that some of us, had we had the choice, would have taken the opportunity to table amendments, emphasising, for example, the importance of certain conditions and criteria relating to the assistance in order to improve the transparency of its content and implementation.
Yet this would have meant - I am on the point of concluding, Madam President - that we would not have managed to approve these agreements on the two countries.
In view of this, considering the factual circumstances and the strategic importance of these two countries within the context of the European Neighbourhood Policy, I urge all present to approve these two proposals for macro-financial assistance without amendments, as advised by the Commission.
Miloslav Ransdorf
The committee has debated this report and a simplified procedure has been proposed as this is an extremely urgent topic. My topic is macro-financial assistance for Serbia, which I consider to be the central economy of the Balkans. In my opinion, there are many reasons why we should provide substantial support for this country as it seeks EU membership during a difficult period characterised by huge financial instability. There is a drop in State revenues, there are inflationary pressures and the country is, of course, confronted with a whole raft of consequences of past actions, for example, a major problem with environmental damage caused at the time of the NATO air attacks. There is also a humanitarian problem here, as there are 750 thousand refugees in the country from other parts of the former Yugoslavia and, of course, the current financial crisis has exposed all of the structural deficiencies of the Serbian economy. In addition, the war that took place in 1999 and the air attacks reduced the share of final production in the overall output of Serbia and that has also exacerbated the foreign trade balance. On top of this was the poor harvest last year which further weakened Serbian state revenues. The situation is now very grave.
I consider it necessary for us to accelerate this assistance so that it can come into operation by the start of next year, and I have therefore proposed the simplified procedure via our committee chairman. I would like to emphasise that this is also an issue which is in the interests of Serbia's neighbours, including some countries that are not yet members of the EU, such as Bosnia and Herzegovina and Croatia, but which are applying for membership. However, there are also countries here which are EU members already and which might be threatened by instability in Serbia, such as Hungary, Romania and Bulgaria. In the interests of the stability of this wing of the EU, and in the interests of the internal stability of Serbia, with an emphasis on strengthening the territorial integrity of the country, I propose that we do indeed accelerate the implementation of macro-financial assistance.
Csaba Sógor
deputising for the rapporteur. - Madam President, I have the honour to present to Parliament the report of the Committee on International Trade on macro-financial assistance (MFA) to Bosnia and Herzegovina.
As with other countries to which the Commission has proposed to give MFA, the economy of Bosnia and Herzegovina has been seriously affected by the current economic and financial crisis. Its economy is in a serious situation and it is clear that a way out of this crisis must be found. Therefore, Bosnia and Herzegovina has applied for EU assistance and the Commission has proposed to provide it in the form of a loan amounting to up to EUR 100 million, which is to be made available in two instalments during 2010.
Now we have to decide whether we support this request or not. Under the current treaty rules, we are merely consulted. Therefore, on the one hand, one could argue: why not wait for the Treaty of Lisbon to enter into force and handle a modified proposal already under the ordinary legislative procedure? On the other hand, despite the increasing importance of our work after the entry into force of the Treaty of Lisbon, I believe that we, as a Parliament, must show responsibility and political commitment and do our part in giving this Balkan country, early next year already, the assistance it needs now, rather than discussing it at length and being able to give the assistance only at some unknown point of time in the future.
For the above reasons, the suggestion of the Committee on International Trade is to have the proposal of MFA to Bosnia and Herzegovina adopted before the entry into force of the Treaty of Lisbon without amendments under the simplified procedure.
My colleagues on our committee supported this proposal unanimously and now I ask for the support of the whole House as well.
Siim Kallas
Vice-President of the Commission. - Madam President, first and foremost, I would like to note that the Commission greatly welcomes the positive and constructive attitude of Parliament on the process of adoption of the Commission proposals for macro-financial assistance for four partner countries: Armenia, Georgia, Serbia, and Bosnia and Herzegovina.
The Commission appreciates that the European Parliament has opted for a procedure which allows for a vote - to take place tomorrow, already - on the reports for these four countries, without amendments to the Commission's proposals. Parliament's swift and decisive action will allow the Council to adopt decisions on the four operations in the next few days, and the Commission will then be in a position to start implementing the programmes.
Macro-financial assistance is, by its very nature, a short-term, crisis-response instrument and proposals for macro-financial assistance normally require rapid action. This is clearly the case for the countries we are examining today. Armenia, Georgia, Serbia and Bosnia are among those having suffered the most from the effects of the crisis, irrespective of the difference in their economic structures and level of development. They are also among those that have been implementing strong adjustment programmes with the support of the International Monetary Fund and those that have requested financial support from the EU. And the Commission is indeed of the opinion that the conditions for extending macro-financial assistance to these countries are fully met.
Let me now turn to the instrument of macro-financial assistance and to its future under the Lisbon Treaty. The change brought by the Lisbon Treaty provides the ordinary legislative procedure for macro-financial assistance, with equal involvement of the European Parliament and the Council.
At the same time, I think we all accept that a lengthy legislative procedure involving a long iterative process between the various institutions is not adapted to the macro-financial assistance instrument or, indeed, to situations of crisis.
Therefore, the Commission considers it crucial to examine how to deal with macro-financial assistance in the future, notably within the framework of the Lisbon Treaty. We would like to do this in close cooperation with the European Parliament in order to ensure that in the future, macro-financial assistance proposals are dealt with in a manner which, on the one hand, is rapid and allows for an effective crisis response but, on the other, meets the requirements of the Lisbon Treaty for detailed scrutiny by legislators within the joint decision-making process.
The Commission has historically been in favour of a framework regulation governing the macro-financial assistance instrument. The Commission services have started reflections at a technical level on the shape of such a framework regulation under the Lisbon Treaty.
Such a framework regulation could potentially have significant advantages. Until such a framework regulation is adopted, individual Commission proposals for macro-financial assistance programmes will be codecided on a case-by-case basis by the European Parliament and the Council. The proposals - starting with the recently adopted Commission proposal for Ukraine - will be a good test of interinstitutional cooperation. I hope that Parliament and the Council will be able to come to an agreement rapidly.
Finally, I would like to note that the Commission is happy to agree to Parliament's suggestions on an improvement of the flow of information on macro-financial assistance programmes. The Commission is ready to make its best efforts to provide more upstream information to Parliament for macro-financial assistance programmes.
George Sabin Cutaş
I would like to begin by congratulating the rapporteurs for the excellent job they have done. I also wish to express my appreciation of these initiatives proposed by the European Commission and Council, aimed at providing macro-financial assistance to Bosnia and Herzegovina and Serbia. This financial support from the European Union is being offered at an extremely difficult time for both countries.
After the terrible ordeal this part of the Balkans lived through in the 1990s, shedding so much blood, the region entered a period of reconstruction which has, however, been stymied by the current economic crisis. Both countries have suffered the full force of the recession, against the background of a budget deficit and unemployment rate that were already high. The crisis has forced foreign investors to withdraw their investments in numerous East European countries, with Serbia being one of the countries most severely hit by the deficit triggered by the huge outflow of foreign capital. The collapse of economic growth combined with having to meet their obligations more quickly to repay short-term debts has increased the need for external finance.
As a result, this support from the European Union is being provided at a time when the full impact of the external funding deficit is being felt, not to mention that the economic and social prospects are gloomy. It is estimated that the peak in the unemployment rate will be recorded only in the next two to three quarters.
We are well aware that social discontent can have a harmful effect on a country's stability, especially when it comes on top of already existing tensions and is rooted in such a sensitive issue as ethnic origin. This is why I welcome these proposals for macro-financial assistance. I must also stress how necessary they are, primarily as a factor in maintaining and consolidating stability in a region which has been hit hard and is in a delicate balance. We cannot fail to take into account either the prospects for the European Union's enlargement in the Balkans, which is another reason why it is our duty to support these states aspiring to European integration.
Before ending, I would like to emphasise the urgent nature of this financial support, given the economic situation in Serbia and Bosnia and Herzegovina, which is worsening at an accelerated pace. The urgent nature of this assistance should, in my view, take precedence over considerations of a procedural nature dictated by the entry into force of the Treaty of Lisbon. I therefore support the proposal put forward by both rapporteurs on transferring Community funds in good time, avoiding the delays caused by the need for the European Commission to modify the legal basis of the provisions.
Paweł Robert Kowal
Madam President, we are responsible, as the Member States of the European Union, for the situation in Georgia. The authors of the resolution have done well to remind us that the economic situation in Georgia before the conflict began was very good. The conflict in Georgia in 2008 caused a serious worsening of the economic situation in the country. We are dealing with a country which aspires to cooperate closely with the European Union and, in the future, to also have the opportunity of developing this European perspective.
I would like to draw attention to the fact that Russian sanctions, the general situation in the Caucasus and the effects of last year's conflict are not allowing Georgia to develop normally or to build a normal economy. This is an additional and particular reason, and we must stress this, why Georgia should be provided with macro-financial assistance, and why Georgia's budget should be strengthened - so that Georgia can have the opportunity for economic development in accordance with its own ambitions. As far as is possible, and if there is such a need, that assistance to Georgia should be increased yet further, and I want to stress this clearly. A key matter is the granting of financial assistance in 2009. From our point of view, procedural questions and various procedural details must not, under any circumstances, be allowed to stand in the way of Georgia receiving assistance this year.
Georgia deserves to receive our support. This is our obligation as the European Union, especially in a situation where the Sarkozy Plan is not being carried out for Georgia, and we are not able to ensure, as an arbiter, as the European Union, that relations between Georgia and Russia are regulated in accordance with international law.
Tomasz Piotr Poręba
Madam President, the macro-financial assistance proposed by the Commission for Georgia, Armenia, Bosnia and Herzegovina and Serbia is certainly a step in the right direction. However, the scope of this assistance falls far short of what is needed. I am thinking especially of Georgia, which is to receive EUR 46 million. In the context of the real problems which the country is having to face, the economic crisis and also the problems resulting from the war with Russia, which has significantly weakened the impetus of economic development in Georgia, that assistance is certainly not very great.
For we must remember that countries like Georgia, Armenia, Azerbaijan and Kazakhstan are not only important countries for the European Union from a political perspective, but are also strategic in terms of energy security. For it is these countries which are going to decide, and are also already deciding, what the diversification of supply of power sources to the European Union will be like in the future.
If we do not support them financially and politically today, if we do not give them the chance to develop, then Russia will do this quickly, because these countries have extremely important and strategic significance for Russia. Therefore, I evaluate the Commission proposal as constructive and good. However, the level of financial support is significantly too low.
Siim Kallas
Vice-President of the Commission. - Madam President, our Neighbourhood Policy is able, to a large extent, to provide financial assistance to countries in our neighbourhood which are in trouble, so I am very happy that Members of Parliament so unanimously supported this Commission proposal. We are doing our utmost to support our neighbourhood countries.
One Member mentioned that procedural details should not hinder us, but in fact, procedures must ensure that money is used properly. You always have to strike a balance between achieving objectives and following procedures. It is important to follow clear rules in providing this assistance.
As I said, we will see in the very near future the possibility of developing the framework agreement which establishes a certain frame for this kind of assistance, and within this assistance framework, we can then provide rapid assistance. This is a major problem today: we are currently deciding on a case-by-case basis and this takes an enormous amount of time, like so many other procedures in our large European Union.
This will be the key issue. There will be a framework agreement and then there will be a rapid decision-making mechanism about the size of the assistance. There are always limits imposed by Member States, and this will always be so. There is never unlimited scope to help countries while, at the same time, providing money for our own projects.
Vital Moreira
Madam President, I would like to take this opportunity to make three final points.
Firstly, macro-financial assistance to EU neighbourhood countries is justified for two reasons: firstly, it has intrinsic political value as a way of the Union gaining prestige by assisting countries in difficulty, within the context of a policy of good neighbourliness.
Secondly, it is justified by the EU's own interest in contributing to the financial, social and political stability of our neighbourhood countries as a condition for their development and democratic consolidation, as this is also a prerequisite for our own political stability.
My second point is that macro-financial assistance must nevertheless be carefully tied to two conditions: the assistance must be aimed at responding to exceptional and temporary financial difficulties in these countries, and not for other purposes. Moreover, these countries must not divert the funds which we allocate to them for purposes that are incompatible with the rationale behind the EU aid, particularly for increasing military spending.
As my third and final point, I would like to emphasise the importance and necessity of a general regulatory framework for the allocation of macro-financial assistance and the implementation of the respective agreements with the countries in question, and I acknowledge and welcome Commissioner Kallas's commitment to this issue.
I also hope that the next Commission will be ready to honour this commitment, and that we will have a general regulation on macro-financial assistance before long.
Miloslav Ransdorf
A great writer once said that Balkan States always piled more historical responsibility onto their shoulders than they were capable of carrying. It could similarly be said of the nations in the Caucasus that they piled more history onto their shoulders than they were capable of carrying. It is my opinion, therefore, that the EU should lift some of this historical burden from their shoulders. It would benefit both them and us because the EU is incomplete without the Balkans, and since the Serbs have recently been joking that their only friends are God and the Greeks, in my opinion, we should show them that they also have friends in the European Parliament.
Csaba Sógor
deputising for the rapporteur. - Madam President, all four countries to which the Commission has today proposed to give macro-financial assistance have been seriously affected by the current economic and financial crisis. Their economies are in a serious situation, and it is clear that a way out from this crisis must be found.
In the case of Georgia, the proposed macro-financial assistance of EUR 46 million in the form of grant instalments is aimed at supporting Georgia's recovery after that country experienced a severe economic downturn following the eruption of the military conflict with Russia and the global financial crisis.
The EUR 100 million for Armenia is forecast to have an immediate impact on Armenia's balance of payments, and would in this way contribute to the alleviation of financial constraints on the implementation of the authorities' economic programme and to financing the budget deficit.
Serbia, however badly affected by the financial and economic crisis, is rapidly returning to political stability. As a Balkan country, it is a potential candidate country for EU membership and has signed a stabilisation and association agreement. For this reason, it should also be helped.
Politically speaking, Bosnia and Herzegovina is a potential candidate country which has also signed a stabilisation and association agreement, and it is in the interests of the European Union to assist it.
To conclude, I restate my belief that we as the European Parliament must show responsibility and political commitment in giving these countries the macro-financial assistance they need now, rather than discussing this at length under the ordinary legislative procedure. For the above reasons, on behalf of the PPE Group, I suggest we have the proposal for macro-financial assistance to these countries adopted now. I ask my colleagues to support it unanimously.
President
The joint debate is closed.
The vote will take place tomorrow at 12.00.
Written statements (Rule 149)
Cristian Silviu Buşoi  
I first of all wish to say that I agree with the principle of providing macro-financial assistance to Armenia. I believe that this initiative is part of the European Neighbourhood Policy. Armenia, which is in a particularly serious economic situation due to the financial crisis, is in urgent need of these funds which could enable it to meet the commitments it has taken on as part of the stand-by agreement with the IMF. I welcome the fact that the rapporteur has realised the urgency of this need by opting for an opinion without amendments as the solution. However, I also agree with the objections which can be made at procedural level. Article 308 of the Treaty on the Functioning of the European Union is aimed at measures adopted as part of the internal market, which are not directly provided for in any treaty and are not necessarily similar to those which need to be adopted to provide MFA to third countries. I believe that the interinstitutional procedures require clarification in order to adopt MFA measures adapted to any time constraints so that, in the future, we are never in a situation again where Parliament has to make exceptions to the normal procedure. Furthermore, I would regard it as normal for the EU Council as well to take action more promptly, without ignoring Parliament's role in such procedures.
Indrek Tarand  
in writing. - I want to voice our dissatisfaction with the so-called simplified procedure for the Georgia and Armenia macro-financial aid files. Whereas Parliament has, in the past, been quick in dealing with MFA files, the Commission and Council are slow. Simplified procedure almost excludes Parliament. Could you please explain to us the reasons why the Commission - which was aware that the first payment was already due before 2009 - is late? It has been argued in the Green Group that we have to ensure that MFA is not going to be used for military purposes and I desire that as well. However, at the same time, the French aircraft carrier enters the harbour of St Petersburg in order to seal the biggest arms trade with Russia by an EU Member State. It is more than evident that Russia is the main contributor to the reason why Georgia is in dire need of financial assistance. And to ask one side of the conflict to reduce its weaponry and, with the other hand, to sell ultra-modern technology to the other side, will not only destabilise the strategic situation in the Black Sea region, but will also have serious consequences in the Baltic region.
(The sitting was suspended at 21.10 and resumed at 21.20)
