House of Commons - Documents considered by the Committee on 8th December 2010

Documents considered by the Committee on 8th December 2010 - European Scrutiny Committee Contents

19 Enlargement Strategy and Main Challenges 2010-11

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Commission Communication: Enlargement Strategy and Main Challenges 2010-2011

Commission Staff Working Document: Croatia 2010 Progress Report

Commission Staff Working Document: Turkey 2010 Progress Report

Commission Staff Working Document: Iceland 2010 Progress Report

Commission Staff Working Document: Kosovo 2010 Progress Report[86]

Commission Staff Working Document: Serbia 2010 Progress Report

Commission Staff Working Document: Bosnia and Herzegovina 2010 Progress Report

Commission Staff Working Document: The former Yugoslav Republic of Macedonia 2010 Progress Report

Commission Communication: Commission Opinion on Montenegro's application for membership of the European Union

Commission Staff Working Document: Montenegro's application for membership of the European Union — Analytical Report

Commission Communication: Commission Opinion on Albania's application for membership of the European Union

Commission Staff Working Document: Albania's application for membership of the European Union — Analytical Report

Legal base —

Documents originated 9 November 2010

Documents deposited 16 November 2010

Department Foreign and Commonwealth Office

Basis of consideration Explanatory Memorandum of 30 November 2010

Previous Committee Report None; but see HC 5-vii (2009-10), chapter 1 (20 January 2010) and HC 19-xxxi (2008-09), chapter 2 (11 November 2009)

To be discussed in Council 14 December 2010 General Affairs Council

Committee's assessment Politically important

Committee's decision Cleared

Background

19.1 A year ago, the then Committee considered the Commission's Communication on "Enlargement Strategy and Main Challenges 2009-2010". Annex 1 of the Communication in question contained the key points (styled "Conclusions") in the latest Progress Reports on Croatia, Turkey, Macedonia, Montenegro, Albania, Bosnia and Herzegovina (BiH), Serbia and Kosovo. Individual country progress reports were set out in separate weighty Commission Staff Working Documents. All of this was summarised and commented upon by the then Minister for Europe in detail in the previous Committee's Report of 11 November 2009.[87]

19.2 The second of the previous Committee's Reports dealt with what the then Minister had to say about the "strategy" component for Croatia in the Communication. He said that Croatia had continued to meet the political criteria and make progress in most areas, including intensified efforts in the field of the rule of law. Although in some areas progress had fallen behind the indicative road map for reaching the final stages of negotiations set out a year earlier, preparations had nonetheless advanced substantially across the board so that technical negotiations were now nearing their final phase. If Croatia was able to meet the criteria then it should be possible to complete negotiations in 2010. He noted in particular that:

"Reform efforts need to be stepped up in the areas of judiciary and fundamental rights, in particular as regards the independence and efficiency of the judiciary, the fight against corruption and organised crime, minority rights, including refugee return, and war crimes trials. Public administration reform also requires particular attention.

"Croatia also needs to take all necessary steps to settle the issue of access for the International Criminal Tribunal for the former Yugoslavia (ICTY) to important documents. The Government agrees with this assessment. In particular we urge Croatia to do everything possible to demonstrate full cooperation with ICTY."

The previous Committee's assessment

19.3 Despite the emphasis on having improved the accession process, that the then Minister had said only that "conditionality is an important part" of it was, the previous Committee felt, in unhappy contrast with the positions set out by the then Foreign Secretary in his evidence to them in July 2009, and subsequent correspondence,[88] and the Minister's own evidence session on 28 October 2009.[89]

19.4 With regard to the new chapter 23 of the accession process, which covers these "governance" issues, the then Foreign Secretary noted that when the moment came for the Council to set closing benchmarks, he and the EU would "certainly want to ensure that they set clear requirements for tackling corruption, including a track record of results". The previous Committee subsequently asked the then Minister for Europe if he agreed that, regarding "a track record of results", Croatia should be required to demonstrate before accession what the Commission was still seeking from post-accession Bulgaria and Romania, viz:

— "an autonomously functioning, stable judiciary, which is able to detect and sanction conflicts of interests, corruption and organised crime and preserve the rule of law";

— "concrete cases of indictments, trials and convictions regarding high-level corruption and organised crime"; and

— a " legal system … capable of implementing the laws in an independent and efficient way."

His answer then was an unequivocal: "Yes". This, the previous Committee felt, seemed to be a long way from the position now adopted.

19.5 Instead, there remained indications of continuing pressure for the conclusion of negotiations on Croatia's membership application by the end of 2010, despite there clearly being a great deal to be done if conditionality was to be properly adhered to, and to move ahead with Serbia's Stabilisation and Association Agreement, notwithstanding the continuing freedom of the most egregious fugitive from justice, Ratko Mladic.

19.6 Since these documents were to form the basis of a discussion on enlargement at the December GAERC, and possibly the December European Council, the previous Committee recommended that the Commission Communication: "Enlargement Strategy and Main Challenges 2009-2010" be debated in the European Committee prior to the 7-8 December GAERC.

19.7 They also cleared documents the individual Progress Reports.[90]

The then Minister's letter of 12 January 2010

19.8 The then Minister focussed in his letter on developments regarding Croatia's cooperation with the ICTY and progress on accession negotiations. He said that the UK and three other Member States had put a brake on progress of that part of the accession negotiations dealing with the judiciary and fundamental rights in order to encourage Croatia to improve investigation into the whereabouts of missing documents requested by ICTY prosecutors for the trial of General Ante Gotovina. He then noted that since September 2009, under new Croatian Prime Minister Kosor, there had been several positive developments (which are set out in the previous Committee's Report of 8 January 2010), on the basis of which he was proposing to agree that the opening benchmarks — which he pointed out did not include ICTY conditionality — had been met. If others, as he expected, did likewise, negotiation on opening the chapter could begin. The EU would invite Croatia to submit its negotiating position and EU member states would negotiate a common position including closing benchmarks, which would cover, amongst other things, the important areas of tackling corruption and reform of the judicial system. However, as Croatian investigations and the Gotovina trial were still ongoing and these positive steps needed to be maintained, he would not agree to formal opening of the chapter unless Croatia continued constructive cooperation with ICTY Prosecutors. He also aimed to secure EU agreement to make full cooperation with ICTY a condition for closing the chapter; and to continue to raise ICTY cooperation with the Croatian Government in bilateral and other EU contacts.

19.9 With the debate in the European Committee due to take place on 26 January 2010, the previous Committee reported this further information to the House both because of the widespread interest in the issues dealt with in the Minister's letter and also for the benefit of Members who might wish to participate in the debate.

19.10 At the end of the debate, the Committee resolved that:

19.11 On 8 September 2010, the Committee considered the fourth main Reports on Bulgaria and Romania's post-accession Cooperation and Verification Mechanism. In our Report, as well as endorsing the previous Committee's standpoint, we set out the essence of the Minister for Europe's (Mr David Lidington) letter of 20 June 2010, in which he reviewed Croatia's progress so far and, most importantly, the decision to open negotiations on the new JHA chapter 23 and the closing benchmarks, with regard to which he said that that the UK had sought and secured agreement to a closing benchmark within this chapter stating that (the Minister's italics):

Full

19.12 We asked the Minister to expand on this, and say, in judging what constituted "full" cooperation, to what extent the Council would depend upon the assessment in this regard of the ICTY Chief Prosecutor.

19.13 The Minister's response is set out in paragraphs 12.19-12.23 of chapter 12 of the Report of our 20 October 2010 meeting. The Minister noted some further developments in the Gotovina trial (which had now entered the judgment writing phase, with a judgment expected by early 2011); Prime Minister Kosor had assured him that the Task Force was doing all it could to establish the whereabouts of the missing documents, with regard to which he said he would will continue to impress upon the Croatian Authorities at the highest level the importance of completing a thorough investigation into the missing documents. On the matter of "full cooperation", the Minister said:

"The previous Government publicly defined 'full co-operation' with ICTY as committed and sustained activity demonstrating one hundred per cent effort and political will. I want us to maintain this yardstick and apply it consistently across the region. In the light of concerns raised by the Prosecutor we expect Croatia to demonstrate, in particular, continued efforts to meet requests for documents, and to take all appropriate steps to conduct a credible investigation to find them."

19.14 He also said that the Commission will produce an assessment of Croatia's progress against all the benchmarks and make a recommendation to the Council to close Chapter 23 when they judge the benchmarks have been met:

"It will then be for the Council to decide by unanimity whether or not to close the chapter. The UK is a strong supporter of ICTY and international justice. We believe the Commission's assessment will need to consider all relevant factors and, of course, take full account of the assessment of the ICTY Chief Prosecutor who has a clear mandate from the UNSC to report on countries' cooperation with the Tribunal."

19.15 As we noted in our Report,[92] Conditionality in the enlargement process is important not only in the case of Croatia, but also in that of Serbia, where a similar potential conflict between ICTY-related conditionality on the one hand and Serbia's desire to move to the next stage in the accession process and Member States' desire to reinforce the direction of travel of the present government politics on the other, has been apparent.

19.16 In his letter to us of 1 November 2010, Minister for Europe (Mr David Lidington) confirmed that the 25 October 2010 General Affairs Council agreed to refer Serbia's application for EU membership to the Commission for an Avis (or Opinion). He noted that, in so doing, the Council had reaffirmed the importance it attaches to Serbia sustaining full co-operation with the ICTY and had agreed that, before each stage of Serbia's path towards EU accession, the Council must unanimously decide that full co-operation with the ICTY exists or continues to exist; and that it would continue closely to monitor the progress reports issued by the Office of the ICTY Chief Prosecutor. The Minister also drew attention to the essential need for a constructive approach to regional co-operation — in particular in the process of dialogue between Belgrade and Pristina under the facilitation of High Representative (HR) Baroness Ashton, which had been welcomed by the United Nations General Assembly, in its resolution of 9 September 2010, as a factor for peace, security and stability in the region. The Minister anticipated that the Commission would take approximately a year to complete Serbia's Avis, which he welcomed as "an important step forward in Serbia's relationship with the EU and the process of conditions-based enlargement to the Western Balkans region as a whole."

19.17 For our part, we noted that the Government's position was clear: Serbia's co-operation with ICTY had been sustained since December and Serbia was indeed fully co-operating with ICTY — that being defined as "committed and sustained activity demonstrating one hundred percent effort and political will". On the key issue — the apprehension of the two most egregious fugitives — we felt that it might be argued that the ICTY Chief Prosecutor seemed somewhat less convinced, viz., the concluding paragraph of his assessment:

"50. The Serbian Government must give its full support to the operational services that have been tasked with tracking and apprehending the fugitives. Ongoing financial, logistical and political support is imperative. There can be no alternative to the immediate arrest of the two remaining fugitives, Ratko Mladic and Goran Hadzic."

19.18 Given its importance, we reported this information to the House, and looked forward to scrutinising the Commission Opinion in due course.[93]

The Commission Communications and Commission Staff Working Documents

19.19 In his Explanatory Memorandum of 30 November 2010, the Minister for Europe (Mr David Lidington) explains that the Commission's annual overview of progress on EU enlargement consists of: as usual, a Commission Communication on "the Enlargement Strategy and Main Challenges 2010-2011"; a set of comprehensive Progress Reports on Croatia, Iceland, Macedonia and Turkey (candidate countries) and Bosnia and Herzegovina (BiH), Kosovo and Serbia (aspirant countries); and, on this occasion, instead of a Progress Report, Opinions on Albania and Montenegro, all of which is covered therein.

19.20 He notes that the Council is responsible for decisions on the admission of new Member States and the Commission's report has traditionally provided the basis for the Council to take stock and give direction to the accession negotiations and pre-accession reform priorities; the Commission Communication "therefore provides a statement of the EU's evolving enlargement strategy, an assessment of progress, and a look forward to the challenges and priorities for 2011."

19.21 The Minister goes on to explain that the Progress Reports analyse the progress made by individual countries in meeting the Copenhagen criteria for membership, i.e. political and economic criteria, as well as the capacity to assume the obligations of membership. He continues thus:

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19.22 The Minister then says that, in line with his commitment "to engage closely" with the Committee, he would also like to take this opportunity to inform it of the Government's "guiding principles for the UK's approach to EU enlargement", which he says are:

"to support the membership aspirations of any European country that shares the UK's values and their right to progress towards membership on the basis of their own merits;
"to argue for what the UK believes and in particular to be pro-active in making the case for further EU enlargement both to an external and UK audience;
"to conclude accession negotiations only when the UK is confident that a candidate country is able to meet the political, economic and legal obligations of membership;
"to apply the transitional controls necessary to maintain public confidence including in UK immigration control, taking into account labour market conditions in the UK, impacts on social services, the social security system, and the needs of the British economy and businesses;
"to be active and activist in influencing the detailed articulation of the membership criteria and EU pre-accession assistance to ensure that aspirant countries tackle effectively and at an early stage those issues that matter most to the UK."

"These principles will ensure that EU enlargement remains sustainable by satisfactorily upholding conditionality so that each applicant joins the EU only when it is ready to do so. In particular, the principle on transitional controls allows the UK to use the accession process optimally to ensure that public concerns with regard to immigration control are taken into account. The Government will use these principles to guide our policy towards EU enlargement, and will keep you updated on progress in this area."

The Government's view

19.23 The Minister welcomes publication of the Commission's reports, which he regards as "a fair and balanced assessment of progress and the main challenges, setting out a credible and useful basis for developing our approach to EU enlargement policy over the coming year." He notes that the Strategy and reports have provided the basis for in-depth discussion in the relevant working groups, and that discussion will culminate in the adoption of conclusions on EU enlargement at the 14 December General Affairs Council.

19.24 The Minister then summarises the main conclusions and recommendations of the enlargement strategy, followed by individual country progress reports, as follows (his comments being in italics):

ENLARGEMENT STRATEGY AND MAIN CHALLENGES 2010-2011

"The countries of the Western Balkans, Turkey and Iceland have still, to differing degrees, substantial work ahead to meet the established criteria and conditions for accession to the EU. The strategy sets out an enlargement policy that continues to be based on the principles of consolidation of commitments, fair and rigorous conditionality, and good communication with the public. The EU has improved the quality of the enlargement process. In particular, there is now greater focus at an early stage on the rule of law and good governance.

"Overcoming the economic crisis is highlighted as a key challenge. The impact of the crisis has varied depending on the economic structure of each country and public finances remain under pressure in a number of countries. The EU has helped to alleviate the impact of the crisis by reprogramming pre-accession assistance and making budget support and macro-financial assistance available to some countries. The report highlights the interdependence of European economies and the consequent need for enlargement countries to ensure sound and sustainable public finances.

"Social welfare has also been negatively impacted by the economic crisis. Vulnerable groups have been particularly affected. The Commission affirms its commitment to helping enlargement countries to improve conditions for vulnerable groups, including the social and economic inclusion of Roma.

"Strengthening the rule of law remains a critical challenge, with particular focus on the judiciary and the fight against organised crime. The Commission emphasises the importance it attaches to these issues and intends to intensify the dialogue on the rule of law with candidate and potential candidate countries. The report highlights the need for a credible track-record of implementation in these areas and that the Commission is continuing to monitor the progress of individual countries.

"The Strategy notes that freedom of expression remains a concern in most enlargement countries and should be addressed as a matter of urgency.

"Regional cooperation in the Western Balkans is noted as a challenge, particularly with regard to Serbia and Kosovo. Following the adoption of a UN General Assembly Resolution in September, the EU reiterates that it is ready to facilitate a process of dialogue between Pristina and Belgrade to promote cooperation, achieve progress on the path to the European Union and improve the lives of the people. The Government strongly supports this initiative.

"The Strategy reiterates that bilateral issues should be solved by the parties concerned and should not hold up the accession process.

The Government agrees that is it important for the integrity of the enlargement process that bilateral disputes are managed constructively to avoid delays to the accession process and/or affecting the functioning of the EU.

The Government welcomes the Commission's assessments and recommendations and considers them in line with the UK's own principles on EU enlargement as noted above

CROATIA

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The Government agrees with this approach and will require evidence of a track record of implementation of reform before agreeing to closure of Chapter 23. The Government will also continue to press upon Croatia the need to fully cooperate with the ICTY. This is a requirement for closure of accession negotiations.

ICELAND

"The strategy notes that Iceland has made good progress since the Commission published its Opinion on Iceland's application in February 2010 and accession negotiations were opened in July. However, further efforts are needed particularly in areas that are not covered by European Economic Area (EEA) legislation. Iceland is already well aligned with the majority of the political criteria and has taken positive steps to improve the independence of its judiciary. The strategy also notes that the Icesave dispute remains unresolved. It states that the Commission shares the legal analysis of the EFTA Surevillance Authority, i.e. that Iceland is in breach of the Deposit Guarantee Directive."

The Government agrees with the Commission's assessment.

MACEDONIA

"The Strategy notes continued (albeit uneven) progress, with notable improvements in adopting Parliamentary procedures and police reforms. It highlights progress in reform of the Parliament, police reform and respect for minorities; while noting that further efforts are needed regarding the independence of the judiciary, public administration, and the freedom of the media. Overall, the Commission reiterates its recommendation from 2009 that Macedonia sufficiently fulfils the EU's political and economic criteria and recommends opening accession negotiations. The Government supports the Commission's assessment and its recommendation to open accession negotiations.

"The Strategy also recalls previous European Council conclusions that maintaining good neighbourly relations, including a negotiated and mutually acceptable solution to the name issue, remains essential. It notes direct meetings at the highest levels as positive steps, though acknowledges that these have yet to lead to a solution."

The Government does not see resolution of the name issue as a pre-condition for starting accession negotiations, but hopes that negotiations under the UN on the name issue can continue, intensify and succeed in finding a mutually acceptable solution without further delay.

TURKEY

Overall, the Government agrees with the Commission's assessment and recommendations.

"The Strategy points to several areas of progress by Turkey in EU accession reforms this year, noting that Turkey has made a wide-ranging revision of its constitution, moving the country closer to EU standards. Progress is noted on several areas including: reform of the judiciary; civilian oversight of security forces; fundamental rights, including freedom of assembly, and women's, children's, and cultural rights; and public administration reform. The Strategy notes important Turkish contributions to stabilisation in the Western Balkans, and renewed impetus to improve bilateral relations with Greece. It also notes Turkey's potential as an asset in EU foreign policy, for example in the Middle East and the South Caucasus.

We agree that, acting together, the EU and Turkey can strengthen energy security, and address regional conflicts and ethnic/religious division.

"Turkey's continued public support for the negotiations under UN auspices on Cyprus is noted. The report notes a sound economic basis for EU membership under the ongoing reform programme.

"The Strategy highlights several areas where more progress is needed. Freedom of expression and of the media needs to be better protected both in the law and in practice. Minority rights still need to be improved. The democratic opening, announced by the Turkish government to address notably the Kurdish issue was only partly followed through. Freedom of religion still has specific problems, and a legal framework in line with the ECHR has yet to be established. There have been negative steps in taxation, particularly as pertains to excise duty on alcoholic beverages.

"The Strategy notes the continuing need to ensure full, non-discriminatory implementation of the Ankara Protocol (AAP) i.e. opening Turkey's ports and airports to Cypriot vessels. A total of eight chapters are frozen pending fulfilment of this obligation. The report notes the urgency of Turkey's AAP implementation, and that in the absence of progress the Commission recommends that the EU maintains its measures from 2006."

The Government agrees with this recommendation.

BOSNIA AND HERZEGOVINA (BIH)

"The Strategy concludes that despite some positive improvements, there has been limited overall progress on the reform agenda in Bosnia and Herzegovina (BiH) this year. It notes that achievements were made in securing visa liberalisation and maintaining good regional cooperation, but otherwise political, economic and legislative progress was very limited. In particular little progress has been made towards meeting the requirements for the closure of the Office of the High Representative (OHR). The run up to elections in October 2010 was marked by divisive nationalist rhetoric. The Strategy notes that BiH leaders must now form a new government committed to the country's EU future."

The Government agrees with this assessment.

KOSOVO

"The Strategy highlights progress that Kosovo has made over the last year in a number of areas including decentralisation and its capacity to implement its EU reform agenda. It also highlights the steps that have been taken by the Commission to continue its support to Kosovo's EU perspective including programme funding, a Stabilisation and Association dialogue and steps towards visa liberalisation and trade agreements which are vital in demonstrating a continuing commitment to Kosovo's EU perspective. The Strategy notes the upcoming EU facilitated dialogue between Kosovo and Serbia that will promote cooperation, achieve progress on the path to the European Union and improve the lives of the people. Finally the paper notes that substantial progress is needed by Kosovo to further its EU reform efforts in a number of areas, in particular in reform to public administration, rule of law and the protection and integration of minority communities."

The Government agrees with this assessment.

SERBIA

"The Strategy recognises Serbia's commitment to EU integration. It notes that Serbia has made progress with significant improvements in relations with Croatia; and sustained cooperation with the ICTY, though two remaining fugitives remain at large. The Strategy welcomes the constructive role played by Serbia in regional cooperation and reconciliation but also states that determined efforts are needed by all parties for Kosovo's inclusion in, and the effective functioning of, regional fora and reaffirms the need for Serbia to pursue good neighbourly relations. The main issue for further reform progress is in the area of judicial reform. This has continued but the Strategy flags that there were serious shortcomings this year in the reappointment procedure for judges and prosecutors."

The Government supports the Commission's assessment and recommendation.

ALBANIA

"The Strategy includes the Commission's conclusions and recommendations on Albania's application to join the EU. In the Annex dealing specifically with Albania's membership application, the Commission notes Albania's progress towards fulfilling the Copenhagen Criteria, and in implementing its SAA. However, the Commission stops short of recommending Candidate Status for or opening accession negotiations with Albania until there is a greater degree of compliance with the membership criteria, particularly the stability of institutions guaranteeing democracy and the rule of law"

The Government agrees with this recommendation.

MONTENEGRO

"The Strategy includes the Commission's conclusions and recommendations on Montenegro's application to join the EU. The Commission notes Montenegro's progress towards fulfilling the Copenhagen Criteria, and its positive track record in implementing its obligations under its SAA. In light of the progress made so far, the Commission recommends granting Candidate Status to Montenegro. It also recommends that accession negotiations be opened once Montenegro has achieved the necessary degree of compliance with the Copenhagen political criteria. The Government agrees with these recommendations.

COUNTRY PROGRESS REPORTS

Croatia Progress Report

"The Commission's 2010 Progress Report on Croatia is, in general, a fair and balanced assessment with which the Government agrees. The report states that accession negotiations are now entering their final phase — negotiations have been provisionally closed on 25 out of 35 chapters."

This Government will continue to pay close attention to Croatia's accession negotiations, in order to ensure that negotiations are closed only when Croatia has fulfilled the necessary benchmarks.

"With respect to the political criteria, the report states that Croatia's Parliament functioned in accordance with its constitutional role, but that its capacity to scrutinise the legislative process needs enhancing. In addition, the Presidential elections went smoothly and complied with OSCE standards, but Croatia still needs to address some outstanding issues.

"Croatia has made limited progress on public administration reform, and needs to demonstrate stronger political commitment and closer coordination between key stakeholders. In addition, the report states that further efforts are needed to finalise the legal framework and to implement it efficiently across the board."

Although public administration reform is not formally part of the acquis, the Government believes further efforts in this area before Croatia accedes are important, as a fully functioning public administration is an essential requirement of an EU Member State. The Government will continue to support Croatian reform efforts over the coming months.

"Judicial reform has continued. Case backlogs have been reduced in the courts and judicial independence has been strengthened. However, the main results expected of reforms are yet to be seen. Challenges remain in particular regarding the application of transparent criteria for the appointment of judges and prosecutors, the further reduction of the backlog of cases, the length of proceedings and the enforcement of decisions. With regard to the fight against corruption, there has been some good progress. The report states that implementation and overall coordination of anti-corruption efforts have improved. However, corruption remains prevalent in many areas and further work must be undertaken to tackle this. For example, the recently upgraded legal and administrative structures have yet to be fully tested in practice, particularly the courts' ability to handle the increasing number and complexity of cases. A track record of effective investigation, prosecution and court rulings also remains to be established."

The Government is keen to see a track record of implementation of reform in these areas to ensure that these important reforms are sustainable and continue after Croatia accedes as a new Member State.

"Some progress has been made in the area of human rights and protection of minorities. There has been a greater focus on minority issues; constitutional provisions on minorities were strengthened, the Roma minority has continued to receive attention and the level of funding of minority organisations has been reduced only slightly, despite the Government's financial austerity measures. In addition, some steps have been taken to raise awareness of the new anti-discrimination law, but further work remains to be done on this. Croatia must continue to tackle the problems which still face minority groups, in particular, the Serb and Roma minorities. While there has been some progress regarding refugees, efforts are needed to create the necessary conditions for the permanent return of refugees.

"The report states that Croatia continues to cooperate with the International Criminal Tribunal for the former Yugoslavia (ICTY) and that the special task force set up by the government needs to continue its work to locate or determine the fate of missing artillery documents requested by the Office of the ICTY Prosecutor."

The Government continues to encourage the Croatian Government to make every effort to determine the whereabouts of the missing documents for the trial of General Gotovina, and, if they are still available, to hand them over to the ICTY. Full cooperation with the ICTY is a requirement for the closure of Chapter 23 of Croatia's negotiations, and the Government will continue to pay close attention to this issue.

"In terms of Croatia's economy, the report states that this was severely affected by the global economic and financial crisis. Croatia fell into recession in the first quarter of 2009 and there were no clear signs of a recovery by mid-2010. Unemployment, public deficit and debt have increased significantly. External indebtedness rose further and remains a key vulnerability of the economy. Monetary stability was preserved by the policies of the central bank and the financial sector weathered the crisis relatively well.

"The Commission concludes that Croatia is a functioning market economy and should be able to cope with the competitive pressures and market forces of the Union provided that structural weaknesses are addressed through its reform programme.

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Iceland Progress Report

"The Progress Report on Iceland assesses developments since the publication of the Commission's Opinion in February 2010, therefore the reporting period is shorter than for other countries. Iceland is already well aligned with much of the acquis due to its membership of the European Economic Area (EEA). During the past nine months Iceland has made good progress on measures to strengthen the independence of the judiciary. Iceland amended its Judiciary Act to change the rules on the appointment of judges and the Parliament adopted a bill aimed at tackling possible conflicts of interest. The Commission notes that the implementation of these measures will require continuous follow-up. The Government agrees with this recommendation.

"The EU is Iceland's largest trading partner and, in general, Iceland's integration with the EU on trade and investment remains high. The report confirms that Iceland has taken some measures to address the recession that followed the collapse of its banking system in 2008. These include restructuring its banking sector. But Iceland still has much to do to reduce its high level of foreign indebtedness and be in a position to lift its capital controls. More progress is also required on implementation of increased coverage of the deposit guarantee scheme. The report reiterates the assessment of the Icesave dispute as noted in the Strategy"

The Government agrees with this assessment and is committed to reaching a negotiated settlement with Iceland to ensure the £2.3bn owed to the UK is satisfactorily repaid.

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"Mackerel quotas are decided through a process of negotiation between relevant Coastal States; the EU negotiates on behalf of the UK. Although Iceland was formally recognised as a Coastal State in 2010, no agreement on mackerel quotas has yet been reached."

The Government shares the Commission's concern and continues to encourage Iceland to cooperate with the Commission on this issue in order to reach a satisfactory solution.

Macedonia Progress Report

"It notes that Macedonia is implementing all its current commitments under its Stabilisation and Association Agreement and reiterates its proposal to move on to the second phase of implementation. The report highlights improvements in the functioning of Parliament, particularly on amendments to the rules of procedure and the intention to establish a Parliamentary Institute. It also welcomes progress in implementing the law on languages, decentralisation and equitable representation.

"The report notes that despite some progress, further efforts are needed as regards the independence of the judiciary, reform of public administration, freedom of expression in the media, and the fight against corruption. It calls on continuous efforts and constructive dialogue on inter-ethnic relations through full implementation of the Ohrid Framework Agreement."

The report is in line with the Government's assessment of progress in Macedonia. The Government supports these aims and believes the report provides the government of Macedonia with clear direction for its reform priorities.

"The report notes Macedonia is an active partner in the region, with generally good bilateral ties with its neighbours. Regarding the ongoing name issue dispute with Greece, the report welcomes direct meetings at the highest political level, and stresses the importance of finding a mutually acceptable solution through UN negotiations.

"The report notes that Macedonia's economy contracted only slightly due to low financial sector exposure to toxic international assets, but it continues to suffer from high structural unemployment, particularly among the young and poorly educated. Deficiencies in the rule of law and public administration continue to hinder business development."

Turkey Progress Report

"The report recognises progress on judicial reform, with changes to the Constitutional Court and High Council of Judges and Prosecutors. There have also been improvements in civilian oversight of security forces, with restrictions on the authority of military courts, and the annulment of the EMASYA protocol (which allowed military operations without civilian consent.

"There have also been measures regarding fundamental rights, including measures to allow positive discrimination in favour of women, children, and the elderly, and the establishment of an Ombudsman service. However, further work remains to be done on gender equality. There was a positive trend on prevention of torture and ill-treatment, though further progress is needed. There was also a positive trend in freedom of assembly in practice, and the legal framework is now broadly in line with EU standards. There was some progress in freedom of religion, but there are still specific problems. More progress is needed on dialogue with minority religious communities. Freedom of expression and of the media needs to be better protected both in the law and in practice. Minority rights still need to be improved, with full protection in accordance with European standards. The democratic opening, announced by the Turkish government to address most notably the Kurdish issue was only partly followed through.

"Increased trade union rights have been put in place, including for public servants. However, there are still restrictive provisions in place which need to be addressed, including the right to strike for public servants.

"The report notes a sound economic basis for EU membership under the ongoing reform programme, with a high level of trade and economic integration with the EU, and progress across several areas of the acquis. But there have been negative steps in taxation, particularly on excise duty on alcoholic beverages. The realignment of the Turkish tax legislation with commitments previously made needs to be ensured without delay.

"There have also been important Turkish contributions to stabilisation in the Western Balkans, particularly with Serbia and Bosnia and Herzegovina. There has been renewed impetus to improve bilateral relations with Greece. Turkey's continued public support for the negotiations under UN auspices on Cyprus is noted, while it is underlined that Turkey's commitment in concrete terms to a comprehensive settlement is crucial.

"The report also notes the continuing need to ensure full, non-discriminatory implementation of the Ankara Protocol (AAP) i.e. opening Turkey's ports and airports to Cypriot vessels. A total of eight chapters are frozen pending fulfilment of this obligation. The report notes the urgency of Turkey's AAP implementation, and that in the absence of progress the Commission recommends that the EU maintains its measures from 2006."

The report on Turkey is in general a fair and balanced assessment of Turkey's progress this year, with which the Government agrees. It recognises several positive steps forward this year, with wide ranging reforms to Turkey's constitution, while noting where further progress is needed.

Bosnia and Herzegovina (BiH) Progress Report

"The report notes some positive achievements in BiH over the past year, including BiH meeting the benchmarks required for visa-free travel to the EU's Schengen area and the promotion of regional reconciliation and cooperation, especially through supporting refugee return. The elections held in October 2010 were judged to have been conducted generally in line with international standards.

"These and other areas of progress, however, are overshadowed by limited overall progress during the past year in areas of constitutional reform, public administration reform, tackling corruption, reforming the judicial system, the enforcement of human rights protection and progress towards a functioning market economy.

"In addition, little progress has been made towards meeting the objectives necessary for the closure of the Office of the High Representative (OHR) which includes resolution of state and defence property ownership. Implementation of BiH's Interim Agreement (IA) with the EU has been uneven and BiH remains in breach of its IA for failing to comply with the European Convention on Human Rights and to establish a state aid authority. BiH has also failed to agree a State-level census law, which is integral to EU progress. Progress has been hindered by institutional dysfunctionality and the use of nationalist rhetoric, especially in the run-up to the elections."

The Government shares the assessment made in the Progress Report that there has been insufficient reform progress. We are urging BiH politicians to form a new government that can turn commitment to European integration into concrete reform steps without delay. It is essential that the pace of reform progress picks up if BiH is not to fall behind the rest of the region on the EU accession track. The Government will remain strongly committed to BiH's European perspective and to its territorial integrity.

Kosovo Progress Report

"The report highlights areas where clear progress has been made, e.g. orderly local elections at the end of 2009, and decentralisation.

"There has also been important progress in Kosovo's commitment to its European agenda through the establishment of the Ministry for European Integration. In the rule of law sector, Kosovo's cooperation with EULEX has improved, although the report notes that this cooperation needs to extend in relation to the north of Kosovo. A major reform of the judiciary has also been launched, but there is still much work to do to ensure access to justice for all including the challenge of addressing political interference in the justice sector.

"The report also recognises some areas which need clear improvements if Kosovo is to meet European standards in democracy, rule of law and human rights. Particular challenges include the need for public administration reform, ensuring freedom of expression and consolidating the rule of law, including making concrete progress in tackling corruption and organised crime. Dialogue and reconciliation between communities and the protection and integration of minorities, particularly Kosovo Serbs, are still areas of concern."

We are now seeing significant numbers of Kosovo Serbs participating in Kosovan political life and Kosovo has created new municipalities to secure their rights to participate in local government structures. We look forward to the continuation of this progress at the upcoming national elections on 12 December.

The report is in line with the Government's assessment of progress in Kosovo. The central message is that whilst some progress has been made in a number of areas, substantial further reforms are required for Kosovo to help realise its EU aspirations. The report's conclusions should provide a useful template to help Kosovo identify and drive through reforms that are fundamental for further progress towards EU integration and it is important that Kosovo works closely with the European Commission towards this aim.

Serbia Progress Report

"It notes that Serbia is implementing its commitments under the Stabilisation and Association Agreement. The Serbian Government remained stable and continued to demonstrate a high degree of consensus on EU integration as a strategic priority. It underlines that Serbia has sustained its co-operation with the ICTY, and must continue to do so, including in the hunt for the two remaining fugitives, in order to make further steps on its path towards the EU.

"The report notes that Parliament functionality has seen improvement over the past year but helpfully highlights the continued problematic nature of the democratic accountability of individual MPs and excessive party control of MPs' mandates related to their ability arbitrarily to appoint MPs instead of following the order of candidates from electoral lists. Serbia should note that improvements to the legislative framework require further work to bring into line with European standards.

"Serbia's judicial system only partially meets the priorities that had been set for its reform. The report flags serious concerns over the way recent reforms have been implemented, in particular the reappointment of judges and prosecutors. The report does not detail the full background but notes that while there is general acceptance that many judges (including some of those from the Milosevic era) need to be replaced, the way in which judges were either selected or rejected for appointment lacked transparency, was often arbitrary and lent itself to political interference.

"The report notes that that slow and incomplete reform in this sector holds up not only the accession process, but also private sector development and anti-corruption efforts.

"The report underlines the continued importance of good neighbourly relations, as a key component of the Stabilisation and Association Agreement and an essential principle for applicants' progress towards the EU. The report notes that Serbia has prioritised its efforts towards greater regional co-operation. It stresses that Serbia has made progress particularly with Croatia and Bosnia and Herzegovina in the area of economic agreements and efforts towards regional reconciliation (such as the Serbian Parliament passing a resolution on Srebrenica). With Albania, cooperation on tackling organised crime has increased. The report underlines the importance of demonstrating a constructive attitude to Kosovo's ability to participate in regional trade and cooperation.

"The report notes that Serbia has maintained parallel structures in Kosovo and organised parallel municipal by-elections there. It also notes that Serbia discouraged Serb participation in the municipal elections organised by the Kosovo authorities in November 2009.

"The report notes that progress has been made in freedom of assembly and that the Pride March took place this year and that the police response was adequate. It also finds that the police response to acts of violence has improved more generally.

"The report notes that while some progress was made in addressing the issue of the status of refugees and internally displaced persons (IDPs) substantial efforts are still needed. The majority of the Roma population continues to live in extreme poverty. The Roma also face discrimination, in particular as regards access to education, social protection, health care, employment and adequate housing.

"On economic and trade issues, the overall message is one of moderate progress but with considerable outstanding challenges in implementation. The report highlights the issue of restitution as an area that needs attention in order for Serbia to become more attractive to foreign investors."

The report is in line with the Government's assessment of progress in Serbia.

COMMISSION OPINIONS

Opinion on Albania

"The Opinion notes that while institutional frameworks exist in Albania, they are not functioning effectively and that "Parliament is not exercising effective oversight and control over the government and its scrutiny of legislative development is weak." Recommendations from the OSCE-ODIHR over deficiencies in the 2009 elections have not translated into satisfactory electoral reform, and elections are not conducted in line with European standards. The report also cites serious concerns surrounding the overall functioning, efficiency and independence of the judiciary, as well as a lack of transparency in the judicial appointments system. Corruption remains prevalent, and the unlimited immunity enjoyed by public officials undermines the fight against corruption.

"The Commission notes that Albania has been able to generate growth of 5% in recent years, with activity remaining positive, albeit slower, in 2009 despite the crisis. However, concerns remain over the high level of public debt, a narrow export base, high unemployment and the continued deficiencies in the regulatory environment that are deterring business development and foreign investment.

"The Commission's recommendations include 12 'key priorities', chiefly on strengthening democracy and the rule of law, for Albania to focus on over the next year. It commits to monitor progress on these reforms and present an assessment in the 2011 enlargement package."

The Government fully supports the Commission's recommendations, and will continue to monitor Albania's performance on its obligations.

Opinion on Montenegro

"The Commission's report notes that the country's legal and institutional basis is broadly in place, but that deficiencies in the functioning of democratic institutions and implementation of legislation and the rule of law remain. Parliamentary oversight of the government remains limited and the separation of powers is not fully respected in the case of the judiciary. Public administration remains weak and politicised. Organised Crime remains a serious problem.

"The Commission indicates that Montenegro has achieved a degree of macroeconomic stability. However, concerns remain over internal and external imbalances, brought on by large capital inflows prior to the economic crisis, as well as existing weaknesses, in the financial sector and the functioning of labour markets. To cope in the medium term with market forces within the Union, Montenegro should strengthen its physical infrastructure and human capital and continue to implement structural reforms.

acquis

The Government welcomes the Commission's Opinion of Montenegro and fully supports its recommendations to grant Candidate Status and the further efforts required before recommending that negotiations for accession to the EU should be opened.

Conclusion

19.25 We are grateful to the Minister for his detailed and helpful Explanatory Memorandum.

19.26 We are reporting this to the House in detail not simply because of the widespread interest in the enlargement question but also because, in a number of cases, important decisions are on the horizon.

19.27 We now clear the documents.

86 Under UNSCR 1244/99. Back

87 See headnote. Back

88 See headnote: (30828) (30829): HC 19-xxvi (2008-09), chapter 22 (10 September 2009). Back

89 Published as HC 1076. Back

90 See headnote: HC 19-xxxi (2008-09), chapter 2 (11 November 2009). Back

91 See http://www.publications.parliament.uk/pa/cm200910/cmgeneral/euro/100126/100126s01.htm for the record of the debate. Back

92 See HC 428-iv (2010-11), chapter 12 (20 October 2010). Back

93 See HC428-vi (2010-11), chapter 11 ( 3 November 2010). Back