Initiative for Transparency of Defence Budgeting
Note of the Meeting

Under the auspices of Stability Pact Working Table III, a first joint meeting of the Multinational Steering Group (MSG) and the Academic Working Group (AWG) of the Initiative for Transparency of Defence Budgeting was held on 15-16 March 2001 in Vienna - Hofburg. The meeting was organized and hosted by the Permanent missions of UK and Bulgaria to the OSCE. Delegations from Albania, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Greece, Romania, Turkey, the Federal Republic of Yugoslavia as well as from Canada, Denmark, Germany, Hungary, France, Italy, Sweden/EU Presidency, United Kingdom and the USA participated. Representatives of the Special Coordinator of the Stability Pact, the OSCE Secretariat and NATO International Secretariat also attended the meeting.


The Meeting was chaired by Mr. Paul Flaherty (UK delegation to the OSCE) and Colonel Dobromir Totev (MOD, Bulgaria). Opening addresses and statements were delivered by H.E. Ambassador Ivan Naydenov, Permanent representative of Bulgaria to the OSCE; H.E. Ambassador John De Fonblanque, Head of the UK Permanent Mission to the OSCE in Vienna; Ambassador T. Chebeleu, Representative of the Romanian OSCE Chairmanship; Mr. Oystein Bo, Representative of the Special Coordinator for WT III of Stability Pact; Mr. Jan Blomqvist, Representative of the EU Presidency; Prof. Tilcho Ivanov, University of National and World Economy - Sofia; Mr. Thomas Rahm, Representative of the Secretary General of the OSCE. All speakers agreed that the meeting was a substantial step ahead in the implementation of the Initiative "Transparency of Defence Budgeting". A number of working papers had previously been distributed to the participants and these formed a basis for the discussion.


During the discussion a common understanding on the definition of transparency of military budgeting was agreed. The participants discussed and adopted the final text of a Project Paper, describing the aims of the Initiative. A Multinational Steering Group of the Initiative was constituted, including all countries and organizations represented at the meeting and co-chaired by Mr. Paul Flaherty, Counsellor at the UK Delegation to the OSCE and by Mr. Todor Tagarev, Director of the Defence Planning Directorate at the Bulgarian Ministry of Defence. The Representatives of Denmark and of NATO Secretariat noted that they participate in the MSG with the status of observers. A small Secretariat of the MSG including representatives of the Bulgarian MOD and MFA will operate as required in Sofia, Bulgaria. Terms of Reference of the Multinational Steering Group were discussed and after amendments were adopted by the participants. It was agreed that the next meeting of Multinational Steering Group would be held in October 2001. This meeting will assess the progress achieved in the implementation of the Initiative.


The number of participants in the Academic Working Group who attended the meeting was significantly smaller in comparison with the Multinational Steering Group. The Academic Group designated as its chairman Prof. Tilcho Ivanov from the University of National and World Economy, Bulgaria. The Terms of Reference of the Academic Working Group were discussed and adopted by the participants. An appeal was made to participating countries to nominate their representatives to the Academic Working Group. It was agreed that the next meeting of the AWG would be held in Sofia, Bulgaria in May 2001.


The joint meeting agreed to establish a Group of Experts (GOE) of the Initiative to be located at the Defence Staff College in Sofia, Bulgaria. The GOE will be responsible to the MSG. It was agreed that GOE would start to operate in May 2001, composed initially of two Bulgarian representatives. Participating countries were requested to nominate as soon as possible their representatives to the GOE, assuming the costs of their travel and accommodation in Sofia. It was noted that the exact modalities for participation of foreign representatives in the GOE could be specified later depending on donor contributions to the Initiative.


The meeting reviewed present and possible future funding arrangements for the Initiative for Transparency of Defence Budgeting. An appeal was made to potential donor countries and institutions to support the initiative financially. The secretariat of the MSG was tasked to prepare a detailed scheme for possible longer-term financing of the Initiative and for the GOE in particular that will be presented to the next meeting of Stability Pact WT-3 in Zagreb, Croatia in May 2001. Bulgaria was requested to report at the Zagreb WT-3 meeting on the progress achieved in the implementation of the Initiative.


Proposals for coordination of this Initiative with other organizations such as NATO and the OSCE were presented to the participants of the joint meeting and were adopted. It was agreed that this Initiative should closely interact with and broadly rely on the expertise and experience in defence budgeting, available within NATO, the OSCE and the EU. Participants agreed that the Southeast Europe Security Co-operation Steering Group - SEEGROUP, supported by NATO, could be an appropriate framework for mobilising expertise and political and financial support for this Stability Pact Initiative among NATO member states and interested EAPC/PfP Partners. It was also recognised that information and experience accumulated within the OSCE could be of valuable assistance.


A paper for academic focus and a work programme were adopted. According to the decision, the Group of Experts, in cooperation with the AWG, will provide by 1 October 2001 and in the spring of 2002 two papers:

1. A Compendium of South East European Defence Expenditures for the Years 1999 and 2000 and Budgets for the Years 2001-2005;
2. A Comparative Study of National Practices in Southeast Europe in Programming, Budgeting, and Budget Execution in the context of defence planning, including parliamentary control, legislative processes and administrative processes.


Participants in the meeting agreed to request their respective authorities to submit on a voluntary basis information to the GOE for preparation of the above mentioned papers. The information should be unclassified and its content could be based on the Vienna Document '99 categories.


The participants expressed their gratitude to the OSCE Secretariat for providing the venue of the meeting.