The Stability Pact is the first serious attempt by the international community to replace the previous, reactive crisis intervention policy in South Eastern Europe with a comprehensive, long-term conflict prevention strategy.

On 10 June 1999, at the EU's initiative, the Stability Pact for South Eastern Europe was adopted in Cologne. In the founding document, more than 40 partner countries and organisations undertook to strengthen the countries of South Eastern Europe "in their efforts to foster peace, democracy, respect for human rights and economic prosperity in order to achieve stability in the whole region". Euro-Atlantic integration was promised to all the countries in the region. At a summit meeting in Sarajevo on 30 July 1999, the Pact was reaffirmed.

The idea for the Stability Pact arose in late 1998 and thus predates the Kosovo war. The NATO intervention acted as a catalyst in strengthening international political will for co-ordinated and preventive action in the region.
The Stability Pact is based on experiences and lessons from worldwide international crisis management. Conflict prevention and peace building can be successful only if they start in parallel in three key sectors: the creation of a secure environment, the promotion of sustainable democratic systems, and the promotion of economic and social well being. Progress in all three sectors is necessary for sustainable peace and democracy.

Special Co-ordinator, Regional Tables and Working Tables

The Stability Pact is a political declaration of commitment and a framework agreement on international co-operation to develop a shared strategy among all partners for stability and growth in South Eastern Europe. The Stability Pact is not a new international organisation nor does it have any independent financial resources or implementing structures.

Organisationally, the Stability Pact relies on the Special Co-ordinator, Erhard Busek, and his some 30-member team. His most important task is to bring the participants' political strategies in line with one another, to co-ordinate existing and new initiatives in the region and, thereby, to help avoid unnecessary duplication of work. The headquarters of the Special Co-ordinator and his office are in Brussels.

The Special Co-ordinator chairs the most important political instrument of the Stability Pact, the Regional Table. There are three Working Tables which operate under the Regional Table:

• Working Table I: Democratisation and Human Rights;
  
• Working Table II: Economic Reconstruction, Co-operation and Development;
  
• Working Table III: Security Issues (with two Sub-Tables: Security and Defence, and Justice and Home Affairs).
  

The structure and working methods of the Stability Pact are modelled on the CSCE process. A special feature is that at Regional and Working Tables, representatives of South Eastern European countries are, for the first time, on an equal footing with those of international organisations and financial institutions in advising on the future of their region and in setting priorities concerning the content of all three working areas.

The European Commission and World Bank were appointed to co-ordinate the economic assistance measures for the region. They jointly chair a High-Level Steering Group in which the finance ministers of the G8 countries and the country holding the EU presidency work together with the representatives of international financial institutions and organisations and the Special Co-ordinator.

What does the European Perspective mean?

In the founding document of the Stability Pact, the EU, which has assumed a leading role in the Pact, undertakes to draw South Eastern Europe "closer to the perspective of full integration ... into its structures", including eventual full membership. The European Union and its Member States are collectively the most important donors in the region.

Moving toward European structures includes, in principle, the possibility of full membership of the EU. Countries wishing to be admitted must, however, first meet the conditions defined by the Council on 29 April 1997 concerning democratic, economic and institutional reforms.

As a contribution to the Stability Pact and an interim step towards membership, the European Union set up a new generation of Stabilisation and Association Agreements. These are aimed at the five South Eastern European countries which so far had no contractual relationship with the EU, i.e. Albania, Bosnia-Herzegovina, Croatia, FYR Macedonia and Serbia & Montenegro. The EU signed the first SAA agreement with FYR Macedonia in April 2001. A similar agreement with Croatia was signed in October 2001; negotiations with Albania started in late 2002.

The intention is to increase economic, political and social co-operation between the EU and the countries through a new instrument, the aid regulation CARDS (Community Assistance for Reconstruction, Democratisation and Stabilisation). An amount of € 4.65 billion is allocated over the period 2002-2006 to accompany and support the reforms of the countries concerned.

At the EU summit meeting in Helsinki in December 1999, Bulgaria and Romania, which already have association agreements (Europe Agreements) with the EU, were admitted to full negotiations on membership with the EU.

The Stability Pact is complementary to the SAP and the accession process, and provides a bridge between the Western Balkans, the candidate countries in SEE, and the Republic of Moldova.

Democratisation and Human Rights

Without democratic institutions that work effectively and the democratic development of a state under the rule of law, there can be no long-term economic development and prosperity. Equally, democratisation and non-discrimination are also fundamental preconditions to guaranteeing internal and external security. Since the June 2001 Regional Table, Working Table I focuses on four priority areas:

Cross-border Co-operation and Local Democracy builds on achievements by the Human Rights and Minorities Task Force and the Szeged process during the first years of the Pact's existence. The Human Rights and Minorities Task Force initiated activities promoting multi-ethnic coexistence and the protection of minorities. Legislation reviews and awareness campaigns are its other activities. Within the Szeged Process, a mechanism that had originally been established to support democratic forces in the FRY at the time of the Milosevic regime, more than 40 partnerships have been concluded with cities and local authorities governed by opposition parties in Serbia. In March 2002, the Szeged Process
incorporated the promotion and development of regional, local and cross-border co-operation.

• Education and Youth
  
  The Task Force Education and Youth supports the incorporation of SEE into a European Area of Education and promotes this through regional co-operation and networking as instruments for wider participation in European initiatives.
  
  Education and training are not only key to sustainable development, peace and stability within and among countries, but also our indispensable means to help SEE on its way to full integration into the EU.
  
  The "SEE Education Reform Implementation Initiative in view of the Accession and the Stabilisation and Association Processes", aims to link the national education reform processes in the region with European trends, as outlined in the respective EU programs. The Initiative will provide access to expertise in education reform in European countries and facilitates capacity
  building in order for SEE countries to achieve common European standards. Country-specific needs regarding education are taken into account.
  
  A Memorandum of Understanding on the Initiative is expected to be signed by the Ministers of Education in June 2003, before the coordination of the initiative can be transferred to the region by the beginning of 2004.
  
  
• The Gender Task Force supports a broad range of initiatives as part of its aim of full participation of women and men in developing stable and democratic societies in SEE. The GTF is a structure with full participation of SEE Governments, Parliaments, and civil society actors and was initiated by key gender equality actors in SEE.
  
  In addition to its grassroots work on political empowerment of women, the GTF is active in establishing new and strengthening existing gender equality bodies, inclusion of women in post-conflict dialogue, linking SEE and EU women mayors, etc. The Gender Task Force activities contributed to the overall increase of women in SEE Parliaments from 7% to 15%.
  
  
• Parliamentary Co-operation
  
  The parliamentary dimension of the Stability Pact is co-sponsored by the EP and the Parliamentary Assemblies of the CoE and the OSCE. This troika deals with SP activities in all three Working Tables. Parliamentary co-operation aims at reinforcing the parliaments' institutional capacity and at establishing a networking practice among national parliaments and the European parliamentary assemblies.
  
  

Economic Reconstruction, Development and Co-operation

Based on a World Bank strategy paper ("The Road to Stability and Prosperity in South Eastern Europe" - March 2000), the economic development goals of the Stability Pact are defined as follows:

• Private sector development, especially through the liberalisation of trade, the enhancement of the business environment and the improvement of the financial sector;
  
• Poverty reduction and social development, especially through policies to foster social cohesion and inclusion;
  
• Increased investment in regional infrastructure;
  
• Improvements in environmental protection.
  
  

Against this backdrop, initiatives undertaken by Working Table II include:

• Formation of an Infrastructure Steering Group (ISG), comprising the European Commission, the International Finance Institutions and the Stability Pact, has produced a comprehensive plan for the development of regional infrastructure (transport, energy, telecommunications and water supply). By 2003, the ISG for SEE has secured financing for 51 projects, with a total value of € 3,82 billion.
  
  
• The Investment Compact, adopted in February 2000, has now entered the implementation phase including identification and monitoring of priority reforms, high-level political support and private sector involvement.
  
  
• The Initiative for Social Cohesion attempts to improve the social systems throughout SEE countries. Implementation has started with projects in the following areas: health, social protection, vocational training & labour market policy, social
  dialogue, as well as housing policy.
  
  
• The Business Advisory Council comprises senior executives from companies in the European Union, the USA, Canada, Japan and Southeast European countries, advising the SP on how to improve the business climate. In December 2002, this body merged with its partner organisation of SECI to become the SEE Business Advisory Council.
  
  
• A Task Force led by the EC is implementing a regional environmental programme. More recently, the Stability Pact has launched a specific initiative to ensure the sustainable development of the Sava River Basin.
  
  
• The E-South East Europe Initiative focuses on improving the legal and institutional framework in order to build information societies in the countries of SEE and to seize opportunities offered by new technologies.
  
  

Strengthening of Internal and External Security

Through its two Sub-Tables, Working Table III deals with questions of both internal and external security. The aim is to establish transparency and predictability and to promote regional co-operation.

The Sub-Table on Security and Defence deals, primarily, with the following areas:

• The Regional Mine Action Group (the Reay Group) is a forum for co-ordination and information sharing for mine action, including stockpile destruction (Ottawa process).
  
• The often-painful process of right-sizing regional military sectors by assisting, in partnership with NATO, in the development of programs to retrain demobilized personnel and seek productive civilian purposes for former military bases.
  
• Small arms and light weapons are a threat to the regional security and stability. A Regional Implementation Plan and a Regional Clearinghouse in Belgrade, operated by UNDP, help develop regional projects to stem the illicit flow of such weaponry.
  
• Arms control issues and confidence building measures are conducted through the Stability Pact initiated RACVIAC Centre in Zagreb, with 20 countries participating.
  
• A database on Security Sector Reform initiatives in South Eastern Europe (currently, roughly 600 initiatives): http://ssr.yciss.yorku.ca/
  

The Sub-Table of Justice and Home Affairs deals primarily with the following:

• Intensified efforts by the countries of the region undertaken within the framework of the Anti Corruption Initiative (SPAI) and the Stability Pact Fight against Organised Crime initiative (SPOC). Particular attention is given to the issue of trafficking in human
  beings through the Task Force against Trafficking in Human Beings.
  
• Police training and regional co-operation of police and border police forces has received wide acknowledgement by Stability Pact partners. Several training courses were held, covering drugs, illicit weapons, police management and crime investigation. In 2003, topics are stolen cars, police ethics, police training methods and document falsification.
  
• Disaster Preparedness and Prevention Initiative (DPPI) is a framework for regional co-operation in the field of determining risks, improving preparedness and prevention capabilities.
  
  

Drawing Lessons from Postwar Reconstruction Efforts

In the implementation of the Stability Pact, important lessons are being drawn from post World War Two reconstruction programs, as well as the Helsinki process (CSCE/OSCE). The Stability Pact works as a two-way street. In order to receive support from the international community, the recipient countries must implement appropriate reforms. South Eastern European governments have undertaken to carry out economic reforms (dismantling of trade and investment barriers) and to fight corruption and organised crime within the context of the Stability Pact. In exchange, donors support the reconstruction process in a co-ordinated way through assistance and credits.

It is not the amount of the money that is decisive for the success of aid. Rather, it depends on the activities to which the funds are directed. In other words, as far as support is concerned, it is not so much a matter of "how much" but "what for".

This has been a guiding principle for the Stability Pact since the outset. Financial pledges have been always linked to concise strategies and projects.

Overall Assistance to the Region - Two Regional Conferences

The first Regional Funding Conference took place on 29 and 30 March 2000 in Brussels. The Special Co-ordinator presented a "Quick Start Package" (QSP) to the donor community. The Package consisted of 244 projects, from all three Working Tables, with a value of € 1.8 billion. Most of the projects were proposed by the South Eastern European countries and in most cases involved more than one country. The implementation of the projects was to start within 12 months.

At the financing conference, the donor community provided € 2.4 billion to finance the QSP. The sum pledged exceeded all expectations. One year later, the implementation of QSP was fast underway (82% started); beginning of 2002, 97% of the projects had started. The process has proved to be a very important instrument to generate momentum for the Stability Pact and to mobilise additional funds for the region.

The second Regional Conference was held on 25-26 October 2001 in Bucharest. Key infrastructure sectors - transport, energy and water - and a new set of 27 infrastructure projects received donor financing of € 2.4 billion. More than € 500 million were pledged for refugee matters.

All in all, donor funding for the region has been substantial since the creation of the Stability Pact. The overall bilateral and multilateral assistance to South Eastern Europe (macro financial assistance and budget support, reconstruction and economic development aid, humanitarian assistance) amounted to approximately € 6 billion in 1999. It exceeded € 6.6 billion both in 2000 and in 2001.

March 2003