Information & Training Seminar for Diplomats

15th -17th March, 1997

Papers

Status of Euro-Med sectorial policy discussions (Industry and Energy)

Speech by Mr. Pier Paolo Merolla, European Commission - Directorate General III - Industry, Head of Unit - A2 - Industrial Co-operation

Introduction

The European Union, and the governments of the Mediterranean countries, has established a variety of shared actions in order to guarantee a common area of peace and stability, to consolidate an area of share prosperity and to promote partnerships in the social, cultural and humanistic spheres.

As far as the economic and financial partnership is concerned' the actions implemented under the "Euro-Mediterranean Partnership Policy" have developed through a detailed and pragmatic approach aimed at achieving the following long-term objectives:

* acceleration of the pace of sustainable socio-economic development;

* improvement of living conditions of their populations, increase in the employment level and reduction in the development gap in the Euro-Mediterranean region;

* encouragement of regional cooperation and integration.

Establishing the conditions for a continuous policy dialogue, which would act as a basis for the implementation of a free trade zones and appropriate economic cooperation, the Euro-Mediterranean partnership is developing through a number of initiatives that confirm the EU's commitment to sustaining the economic transition of its MED partners and to promote regional integration in order to improve the social and economic equilibrium of these countries.

In this framework it should be pointed out that integration does not mean "to become equal", but to become compatible, because only by sharing diverse capacities, the necessary actions of common interest to sustain growth can be introduced.

In this spirit an intensive activity, both at government level and in the private, has been carried out under the economic voles of the Euro-Med partnership.

In 1996 six sectorial ministerial meetings as well as experts meetings were held in order to define common sectorial policy principles. This has been a considerable achievement in terms of economic rapprochement and modernisation, especially in the fields of industry and SMEs, energy, information society, but also environment, transport, tourism etc.

The EU-MED industrial cooperation

The role of the European Commission as regards industrial cooperation is to promote the competitiveness of the European industry but, at the same time, also foster the industrial development of third countries. Basically the role of the Commission should be to facilitate and/or support the private initiative, creating the grounds for cooperation.

The EU-MED industrial cooperation priorities are basically defined by (i) the political commitments taken by the Community and (ii) the establishment of an economic and financial partnership and a free trade zone between the Union and the Mediterranean countries.

In this context, the Union together with its Mediterranean partners and representative authorities of the industrial sectors, has to promote and encourage the industrial cooperation, granting - where necessary, a financial support for the defined actions.

A significative step towards a concrete EU-MED industrial cooperation has been marked by the Bruxelles Conference of the EU-MED Ministries of Industry (20/21 May 1996), which led to the approval of the Bruxelles Declaration and the Work Plan.

The Commission's services have produced a Working Paper which attempts to study in greater details the aspects aiming at fostering the competitiveness and the modernisation of the industrial basis of the Mediterranean partners. The objectives encompass the mobilisation and promotion of direct investments as well as the transfer of technology and know-how.

The priorities foreseen in these documents are:

• the creation of a stable legal and administrative framework consistent with the EU-MED Partnership goals;

• the use of international and/or European standards in respect of product conformity, certification, recognition and quality, including environmental standards;

• improve business and vocational training culture within the industrial fabric and adapt the structures of business association;

• the creation and modernisation of industrial zones and the development of specialised business services centres to foster the take-off of industrial clusters;

• the promotion and set up of new SMEs and restructuring and re-vamping of existing business;

• the development and strengthening of the EU-MED partnership, information and communication networks to foster cooperation among companies, together with the development of an adequate logistical environment to help business.

The above mentioned actions are implemented through Working Groups which are called to carry out the following tasks:

• study in detail the topic indicated in this Statement;
  
• identify priorities;
  
• assist the Commission in the identification of joint projects - including technical assistance, in order to facilitate their access to the MEDA programme and thus to contribute to the coherence of the interventions in the industrial field;
  
• develop a continuous monitoring of the actions.

The Commission is responsible for the general manangement of the Working Groups.

To date, two Working Groups, consisting of experts nominated by their national governments, have been created:

1. "Development of the industrial and entrepreneurial fabric"

Its activities have already started, mainly in the field of Industrial Zones, which has been recomposed as an important subject for the development of Mediterranean economic and industrial base. The first result is the elaboration of a comprehensive survey on the existing and planned Industrial Zones in the Mediterranean countries (type, infrastructures, needs etc.).

A meeting is due on the 24th March to discuss future actions and common programmes.

The scope of the responsibilities of this group will be enlarged in order to cover SMEs and networks - related actions:

2. "Legal and administrative framework

Its field of action being rather broad, its activities will be focused - on a first instance, on the review and examination of the obstacles and constraints to investments existing in the Mediterranean countries. This group will guarantee the follow-up of the London Conference on Investments (6/7 March 1997). The first meeting of this Group is scheduled for the second half of April.

Another action foreseen by the Bruxelles Declaration and supported by the Commission concerns the creation of a network among the 27 EU-MED Industrial Associations.

Its implementation was decided last December on the occasion of the second conference of EU-MED Industrial Associations in Marrakech. Their next Conference will take place on the 5/6 October in Athens.

Its worth to underline that these meetings have an important role in terms of exchange of views and experiences. Their conclusions are an excellent barometer to test the interest of industrialists in developing mutual links.

The second Conference of the EU-MED Ministers of Industry is scheduled on 30/31 October 1997 in Marrakech. The Commission considers this Conference as a confirmation of the willingness of all 27 partners in developing a common policy of industrial cooperation, At this occasion, the discussions will be focused on reviewing the implementation of the Bruxelles Declaration. A special emphases will also be granted to the investments in the Mediterranean region.

The development of SMEs is considered as a crucial factor in the economic and social growth of Mediterranean countries. This is the case not just because the economic modernisation in these countries is linked to technological and managerial improvements of enterprises which represent almost the entire national productive system, but also because SMEs represent the vehicle for fully entering into an open and dynamic environment for new social groups, the young and women.

The main aspects related to the development of SMEs have been discussed during the Workshop organised in Milan on 4/6 June 1996 under tile Italian Precidency.

Participants agreed on:

• define an appropriate regulatory environment;
• facilitate the dialogue with the financial sector, promoting intermediate structures to function as interfaces between SMEs and the financial system;
• develop human resources and the provision of technical assistance;
• develop physical infrastructures and public services.

Many actions have been carried out to promote the development of SMEs, on the basis of the wide experience already gained in the European Union' such as: the promotion of the participation of Mediterranean SMEs in Europartenariat and Interprise events; the extension of the BC-Net, BRE, and Euro-Info-Centres networks to the Mediterranean countries; the development of specialised services centres; the promotion and launching of new SMEs.

R&D and the information Society

The Barcelona Declaration underlines the importance of scientific and technological cooperation for achieving the objectives of the EU-Mediterranean Partnership, identifying three main actions: (i) strengthening scientific research capacity, including training; (ii) promoting joint research projects; (iii) fostering transfer of technology.

In addition, the European Union is already supporting Euro-Mediterranean cooperation in theProgramme field of science and technology by means of its IV Framework Programme for Research. Most of the specific programmes in the FPIV are open to the Mediterranean partners.

A specific Action within the Framework Programme - Cooperation with the developing countries, provides participation in defined areas with financial support.

The priorities includes fields such as: environmental technologies, transport, agricultural and fisheries, basic science (biology, chemistry, physics etc.) water management, civil protection' health and biomedicine' energy and cultural heritage (conservation and tourism), information technologies.

Euro-Mediterranean R&D activities should be enlarged under the new Framework programme and become more visible and complementary with the EU-MED Partnership policy.

In this framework, Information Society related activities are playing a very important role to overcome the difficulties resulting from geographical distance. The Conference held in Rome (30/31 May 1996) on the "Construction of the Euro-Euro-Mediterranean Information Society: communication, education and training, research" provided an opportunity to officially mark the Union's engagement on the Barcelona principles and to begin an analysis of concrete actions to be taken.

Many activities are already underway in this field and a Commission Action Plan in the field of Information Technology and information Society for cooperation with the Mediterranean is under discussion.

Its main elements encompass:

• the promotion of regional interconnection and the development of communication and information networks and services to promote economic and industrial cooperation;

• the support for a model of research and technological development capable of being instrumental in the construction of the information society as well as in the social and economic development of the Mediterranean region;

• the use of technologies for human resources development, innovation and cultural and scientific enrichment.

A volountary group of experts in the field of the Information Society - "the Aldan group" has been created with the aim of providing opinions and advices in this field. Several Workshops have already been proposed and the outputs of the Aldana group's work are an important basis for the EU-MED industry dialogue.

With the intention to improve the coordination between the EU and the Mediterranean countries in the field of R&D, a Monitoring Committee has been implemented . The Committee will: a act as a forum for exchange of information and views on R&D policy and establish a common information base on this subject;

• identify issues of regional importance to be addressed by R&D and requiring cooperative Euro-Med activities;

• propose concrete actions to be taken in the context of the Euro-Mediterranean partnership, the bi-lateral cooperation activities or exchange of information at national level;

• monitor R&D policies, developments and activities in the EU-MED context;

• inform the Committee of the Barcelona Process of its opinion as regards Euro-Mediterranean cooperation in R&D;

• prepare the bi-annual Ministerial meeting on Euro-Mediterranean cooperation in R&D, foreseen in the Barcelona Declaration, the first of which took place in Sophia Antipolis in March 1995.

The Energy Sector

Even if the energy sector is not under my direct responsibilities, I have been asked to present you the main activities in the field of energy.

The Barcelona Declaration foresees inter alla "to create the appropriate framework: conditions for investments and the activities of energy companies, co-operating in creating the conditions enabling such companies to extend energy networks and to promote link-ups". To date many meetings at diverse levels have been held in order to define common principles.

In its Communication of April 1996, the Commission presented the initiatives to be undertaken, which foresee:

• the constitution of a EURO-MED Energy Forum, which constitutes a flexible framework enabling to ensure the continuity of dialogue amongst all the partners at political level as well as experts level, and to promote projects of regional interest;
  
• the engagement of consultations with the Mediterranean partners on their possible participation in the work of the European Energy Charter.

To date, three Mediterranean countries have signed the Energy Charter (Cyprus, Malta, Turkey) and three are observers to the Charter Conference (Algeria, Morocco, Tunisia). All the MED countries attended an information/briefing session on the Energy Charter, organised in order to allow them to formulate opinions and comments. Discussions on associating the Mediterranean countries with the European Energy Charter are also proceeding. A Ministerial meeting is foreseen later in 1997;

• the carrying out of a study on potential options to facilitate investment in the field of Energy in the Mediterranean countries, which is now under way Its results will be presented and discussed around mid-1997

• the definition of projects of common interest in the field of trans-European networks;

• the identification - in the respect of the objectives and MEDA procedures, of energy projects.

The Energy Council (7 May l 996) invited the Commission to "accelerate" its analysis of the existing mechanisms to promote investments in the region, including, where appropriate, the development of a guarantee system.

Finally, the Trieste Ministerial Conference (7/8 June 1996) indicated the areas of cooperation in the energy field:

• energy policy, with the idea to set up a permanent dialogue and exchange of views at regional level;

• infrastructures and networks;

• industrial cooperation and research & development;

• energy efficiency and development of sustainable energy sources;

Among the conclusions of the Trieste Conference, the following have to be insisted on:

• the Energy Charter Treaty is considered as a reference instrument for the development of investment and trade;

• the focus on the interconnected gas and electricity networks;

• the promotion of international investments;

• the EU-MED Energy Forum, aimed at assuring the continuity of dialogue and promoting concrete initiatives of common interest.

Local projects supported by the Barcelona Process and the European Investment Bank aimed at expanding energy output in the Mediterranean region are under way. In addition to developing energy infrastructure, the Bank expects to play a larger role in the future in helping newly privatised companies.

Conclusions

The role of the public administration will never substitute the private initiative in the development of economic and industrial relations between the regions of the world.

Its role will always be, somehow, limited to a secondary level, which is accompanying the private actors in their efforts and trying to eliminate the obstacles that they might encounter in their projects.

On the other hand, it has to be kept in minds of the beneficiaries, that no public money will ever be enough to palliate their structural problems, Public and European funds are scarce and have to be used as an "effet de levier" that will help in modernising and upgrading the industrial basis.

Therefore it is necessary to continue the efforts to promote situations through which the dialogue between the different parties involved may become regular and increasingly more articulated, within a context of mutual respect.