European Scrutiny Committee Contents

57 European Neighbourhood Policy



+ ADDs 1, 3-8, 10-13

COM(10) 207

Commission Communication: Taking stock of the European Neighbourhood Policy

Commission Staff Working Document accompanying the Communication: Sectoral Progress Report.

Commission Staff Working Document accompanying the Communication: Progress Reports on Armenia, Azerbaijan, Georgia, Moldova, Ukraine, Israel, Jordan, Lebanon, the occupied Palestinian Territory and Egypt.

Legal base
Documents originated12 May 2010
Deposited in Parliament3 June 2010
DepartmentForeign and Commonwealth Office
Basis of considerationEM of 21 June 2010
Previous Committee ReportNone; but see (30615) 9029/09: HC 19- xviii (2008-09), chapter 17 (3 June 2009)
To be discussed in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionCleared


57.1 The European Neighbourhood Policy (ENP) aims to promote security, stability and prosperity among the EU's neighbours through implementation of political and economic reforms. It applies, in the East, to Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, and, in the South, to Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, the Occupied Palestinian Authority, Syria and Tunisia. Bilateral Action Plans detail the planned reforms agreed between the EU and partner countries (Algeria, Belarus, Libya and Syria, while covered by ENP, do not participate fully in it and do not have agreed Action Plans). In addition to these bilateral components, ENP comprises a number of regional and multilateral initiatives including the Eastern Partnership and the Union for the Mediterranean.

The Commission Communication

57.2 In its introduction, the Commission says that the ENP has transformed relations between the EU and its neighbours. The picture is painted thus: that since its launch in 2004, political contacts have increased in profile and intensity; trade has increased at double digit rates, aided by a steady process of liberalisation and regulatory convergence; EU assistance has been tailored to partners' reform needs; and its volume in the current Financial Framework has increased by 32 %.

57.3 However, the Commission says:

"[M]uch remains to be done if the ENP's goals of shared stability, security and prosperity are to be achieved. The Lisbon Treaty recognises this by committing the EU to the development of a special relationship with neighbouring countries aiming at establishing an area of prosperity and good neighbourliness (Art. 8 TEU). The policy will also benefit from greater consistency, coherence and coordination of the Union's external policy brought about by the appointment of the High Representative/Vice-President and establishment of the European External Action Service, as well as from the appointment of a Commissioner with a specific regional mandate allowing him to devote extra attention to the ENP and the countries it covers. Against this background, the Commission, at the outset of this new term, considered it useful to take stock of the progress achieved since the launch of the policy. The analysis presented here will serve to guide the further development of the ENP, to make best use of the new possibilities opened by the Lisbon Treaty and to optimize the ENP's contribution to the EU's longer-term objectives, including the 2020 agenda."

57.4 The Communication takes stock under a number of two broad headings — Bilateral Cooperation and Multilateral Cooperation. Under the former, the Commission surveys developments and challenges in

—  Improving governance and addressing protracted conflicts;

—  Promoting mobility;

—  Advancing economic integration;

—  A shared responsibility for the environment;

—  Working together to address climate change

—  Sustainable energy for citizens and industry; and

—  Financial instruments responding to policy objectives.

57.5 The Commission then briefly reviews related Multilateral Initiatives:

—  the Euro-Mediterranean Partnership, which began in 1995;

—  the Union for the Mediterranean, launched in 2008 to give it "a new impetus";

—  the Eastern Partnership, launched in May 2009, "in response to the interest of eastern partners to come closer to the EU and to create the necessary conditions to accelerate political association and further economic integration"; and

—  the Black Sea Synergy, launched in 2008 and which "reflects the EU's growing interest in promoting regional cooperation around the Black Sea", incorporating Bulgaria, Greece and Romania and other regional partners.

57.6 The implementation of the ENP is supported by the European Neighbourhood and Partnership Instrument (ENPI) with a budget of some €11.5 billion (2007-13). The Commission says that, after a mid-term review of ENPI programming documents —"conducted in cooperation with partner countries and taking into account the result of an unprecedentedly wide consultative process involving civil society, EU Member States and other donors" — country allocations better reflect the needs, the levels of ambition and progress and the absorption capacity of partners.

57.7 The Staff Working Documents annexed to this Communication set out in more detail the implementation of the ENP both sectorally, and with each partner, and areas that continue to require action.

The Government's view

57.8 In his Explanatory Memorandum of 21 June 2010, the Minister for Europe (Mr David Lidington) considers the Communication and accompanying progress reports "crucial to the ENP process because they constitute an annual evaluation of the progress made against agreed commitments." The Communication "helpfully sets ENP in the broader political context."

57.9 The Minister notes that, in considering last year's progress reports, the previous Committee commented on the need for effective resource allocation in support of the ENP's policy priorities and for the ENP to be more effective in leveraging human rights and justice reforms, and says that he has "commented on these issues throughout the Explanatory Memorandum". He does so as follows:

"We are pleased that while economic development has slowed down as a result of the global economic downturn, the economic reform agenda remains in place. Action Plan objectives designed to support growth, such as improving access to financial services important to enterprises, continue to be implemented. Progress on democracy, human rights and freedom of expression, however, was disappointing. Accession to human rights conventions advanced but implementation requires much improvement.

"We are pleased that, as last year, the Commission have included objective measures of progress to underpin their findings. Within the appendices to the Sectoral Progress Report are indices detailing performance on governance, macro-economic situation, mobility under youth and skilling programmes, twinning projects and investment operations.

"We will continue to work closely with colleagues in DfID and UKRep through fora such as the ENPI Management Committee and COEST working group, to support the Commission in ensuring that funding is directed towards encouraging political and institutional reform. We work with partners across government in ensuring UK policy is reflected in multilateral fora such as the Eastern Partnership thematic 'platform' meetings.

"We attach particular importance to the development of the regional initiatives (the Eastern Partnership and Union for the Mediterranean). We remain fully engaged in negotiations on Association Agreements with individual partner countries and successors to existing Actions Plans. We are also keen to support technically the development of the Eastern Partnership's new Comprehensive Institution Building (CIB) programme to deliver on approximation in, for example, justice system reforms, as a concrete way of integrating Eastern partners with the EU.

"We attach particular importance to the development of the regional initiatives (the Eastern Partnership and Union for the Mediterranean). We shall also be fully engaged in negotiations on Association Agreements and successor Actions Plans."

57.10 The Minister then comments on the sectoral progress report:


"Progress on trade and economic integration was made in 2009, including negotiations on the Deep and Comprehensive Free Trade Agreement (DCFTA) with Ukraine and on the trade-related aspect of the framework agreement with Libya. A feasibility study on DCFTA negotiations with Moldova was completed in 2009 and preparatory work with Georgia and Armenia continued. Agreements on further liberalisation of trade in agricultural and fish products were entered into with Israel and Egypt. The Palestinian Authority adopted the Pan-Euro Mediterranean protocol on rules of origin. Israel, Morocco, Tunisia and Moldova have already implemented much of their Action Plans' customs-related commitments. The implementation of World Trade Organisation-compatible customs valuations rules remains problematic. In particular Ukraine and Georgia need to strengthen capacity in that their customs administrations for verification of origin. Georgia has begun some work on this by involving customs in the issue of preferential origin certificates. Effective progress on an ambitious DCFTA with Ukraine is a key priority for the UK. Expanding potential for free trade and investment is a fundamental area in which we can work with countries on sustainable economic growth.


"Visa facilitation and readmission agreements with the EU with both Ukraine and Moldova were implemented successfully and underpin UK returns policy to these countries. UKBA has a good working relationship with both countries, and co-operation on returns is good. Work on a similar agreement with Georgia has begun with conclusion anticipated in 2010. UKBA view increased focus on capacity building for ENP partners' border management capabilities as a priority, to help prevent illegal migration transiting through partner countries. We welcome forthcoming Eastern Partnership CIB work in continuing to tackle the issue. EU Schengen Area visa liberalisation remains a long-term goal for partners. A structured dialogue with Ukraine on this is taking place and may serve as a model for other partners. Progress will hinge on the realisation by Ukraine of necessary conditions.


"In many countries legislative frameworks for elections and their conduct do not comply with international standards. Exceptions to this include Ukraine and Moldova whose recent elections met most international standards. In the South, Lebanon and the Occupied Palestinian Territory received EU Electoral Observations Missions but were the only Southern countries to do so. Investment was made in improving capacity and efficiency of the judiciary but judicial independence and effectiveness remain of concern in most countries. All countries with Action Plans completed ratification of the UN Convention against Corruption, but indicators show deterioration over the period in a number of countries. Most partners continued implementation of national strategies to combat money laundering and the financing of terrorism, incorporating the 40 + 9 Financial Action Task Force recommendations.

"But weaknesses remain in implementation and advising financial institutions on their due diligence obligations. The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (the Warsaw Convention) has not been ratified by Ukraine and not signed or ratified by Azerbaijan and Georgia. Partners did not ratify the 1997 protocol to the Second Additional European Convention in Criminal Matters although Armenia has signed the protocol. Good progress was made in capacity building within relevant authorities and law enforcement agencies in the fight against drugs. We will continue to urge that efforts are focused in this area through, for example, Eastern Partnership multilateral work on fighting corruption and CIB. Encouraging good governance is a key UK objective as the foundation of political stability and economic growth, our core aims for the region.


"We support ENP as one of the EU's important tools for ensuring better energy relations with our neighbours. Progress has been achieved. The Eastern Partnership began work under its Energy Security heading in 2009, promoting mutual support and security mechanisms as well as energy efficiency and an increased use of renewable resources. Work also focuses on partner harmonisation with the acquis with steps being taken towards convergence with energy market rules. In December 2009 the accession of Moldova and Ukraine to the Energy Community was approved, subject to certain conditions on Ukraine relating to reform of its gas sector and a satisfactory assessment of the level of nuclear safety in all its operating nuclear plants. Moldova became a full member of the Energy Community on 1 May 2010. In October 2009 Ukraine approved a plan for the modernization and reequipment of the gas transport system from 2009-2015. Partners in the region continued to support the development of a Southern gas corridor to bring gas and oil from the Caspian and Central Asia to Europe. In the South, work continued on regulatory convergence and on an Egypt-Libya gas pipe. Algeria pursued construction of a gas connection with Spain and a link with Italy. Continuing EU-level engagement is key to ensuring the EU's, and therefore the UK's, energy security. The Commission continued to support partners in implementing the Kyoto Protocol. Algeria, Armenia, Belarus, Georgia, Israel, Jordan, Moldova, Morocco, Tunisia and Ukraine associated themselves with the Copenhagen Accord. The Commission will continue to urge remaining partners to associate themselves with the Copenhagen Accord as soon as possible and to provide information on what actions they will implement and we welcome this focus."

57.11 The Minister then turns to the Country Progress Reports, where he says that, in general, he shares the Commission's broad analysis of progress, and has the following particular comments:


"Work on furthering contractual relations with Armenia progressed in 2009, both bilaterally and multilaterally through the Eastern Partnership. Outside the period covered by the report but of pertinence, negotiating directives for an Association Agreement were adopted by the EU in 2010. Negotiations on a DCFTA will start once conditions have been met. The first meeting of the EU-Armenia Human Rights Dialogue took place in December 2009 and we hope this will provide a forum for future constructive engagement in this area.

"Armenia made general progress in their Action Plan objectives and took some steps to address the political crisis which followed the Presidential elections in February 2008, although we believe there remains a need to resolve the issue of those who remain in detention and for a proper investigation into the 10 deaths that occurred before the country can move on fully. The global economic situation led to economic regression in the country and although the country responded with measures to mitigate its effects the resulting reduction in state revenues has impacted negatively on the reform process. We shall continue to work closely with the Commission and EU to encourage Armenia to engage further on its ENP Action Plan reforms.


"Outside the period covered by its report but of pertinence, negotiating directives for an Association Agreement were adopted by the EU in May 2010. Azerbaijan achieved some progress in the implementation of its Action Plan, specifically in economic and social governance. The country was not impacted upon radically by the global economic crisis which meant it was able to increase social agenda spending and investment. However, we share the Commission's view that further reform in the justice sector, strengthening of the rule of law and fighting corruption is required. Serious concerns remain over human rights, particularly freedom of expression and media freedom.

"The overall strengthening of EU-Azerbaijan relations was enhanced by Azerbaijan's engagement through the bilateral aspect of the Eastern Partnership. In particular, good co-operation was made with the EU in the energy field including Azerbaijan's support for development of the Southern gas corridor. However, progress on negotiations for Azerbaijan's accession to the World Trade Organisation was limited. Without WTO accession, it will not be possible to begin negotiations on a DCFTA.


"Outside the remit the period covered by the report but of pertinence, negotiating directives for an Association Agreement with Georgia were adopted by the EU in May 2010. During 2009 first drafts of DCFTA strategic reform plans were prepared. The Commission note that by deploying additional efforts to complete, adopt and begin implementing the agreed reform plans Georgia will be ready to start DCFTA negotiations.

"Georgia made particular progress in rule of law, reform of the justice system, the fight against corruption and trade facilitation and business climate. The country will need to continue its democratic reform efforts if it is to achieve genuine political pluralism. Polarisation of political life in Georgia and concerns about media freedom remain obstacles to political reform. Work is also required on poverty reduction, employment and social policy and agricultural development including sanitary and phyto-sanitary issues.

"The report also covers the EU's engagement with regard to the Georgian conflicts. The EU continues to play an active role as a co-chair, together with the UN and the OSCE, for the `Geneva talks' process of dialogue aimed at eventual conflict resolution. The EU Monitoring Mission (EUMM) is the only international body monitoring the situation along the Administrative Boundary Lines with Abkhazia and South Ossetia (albeit only from one side) and plays an important role in reducing tensions and maintaining international attention on the conflict.


"Elections in April 2009 were disputed. Street riots, including attacks on the Parliament building and Presidential Palace were met with significant violation of human rights and freedom of expression by government forces. Repeat elections in July resulted in the formation of a new parliamentary majority coalition but the parliament was not able to elect a president. This uncertainty affected EU-Moldova relations for much of the year. The appointment of a new government led to improved relations in the last quarter of 2009 and we note efforts to implement structural reforms identified in Moldova's Action Plan in the latter part of 2009. Further commitment to Action Plan priorities is needed to prevent violations of human rights and freedoms. Proper implementation of legislation and reform of the judiciary and rule of law is also required. These are priority areas for the new government.

"Moldova carried out structural reforms to counter the negative impact of economic crisis which badly affected the country in late 2008 and a feasibility study of the future establishment of a DCFTA was finalised in July 2009. Outside the period covered by its report but of relevance, negotiation directives for a new EU-Moldova agreement were adopted in January 2010.


"The Commission rightly notes disappointingly slow implementation of reform during 2009. This was partly due to the difficult working relationship between President Yushchenko and Prime Minister Tymoshenko, and the pre-election period. Some progress was made on Association Agreement negotiations and this will be a priority for 2010. Co-operation on energy issues intensified following the Ukraine-Russia gas dispute in January 2009, which disrupted the supply of gas to the EU via Ukraine.

"In December 2009 approval was given for Ukraine's accession to the Energy Community Treaty subject to the adoption of a suitable domestic gas law. Ukraine continued to support the work of the EU Border Assistance Mission in Moldova. Ukraine also continued to align with the majority of the EU's CFSP declarations.


"As one of the big players in the Middle East, Egypt is of key strategic importance to the EU and the UK and is essential to any solution on many of our foreign policy priorities. Egypt is also an important partner on trade and energy security — the EU represents nearly 34% of Egypt's total trade with the world and is Egypt's first trading partner. The UK is the largest foreign direct investor in Egypt.

"We welcome Egypt's commitment to enhancing relations with the EU and the progress indicated in the Commission's report during 2009 in social, economic and sector reforms. However, further commitment to the implementation of reforms in democracy and human rights is fundamental to the fulfillment of the current Action Plan, which remains the basis of Egypt's relationship with the EU. Fulfillment of the whole Action Plan is key to progress and any potential upgrade.

"Outside of the period of this report but of relevance, the government-imposed state of emergency in Egypt was extended from 1 June 2010 for a further 2 years, although it is now limited to fighting terrorism (and its financing) and drug-related crimes. We agree that the persisting state of emergency, which allows for the unwarranted derogation of some of Egypt's human rights obligations, remains a cause for concern and disappointment. We continue to call for an end to the state of emergency and urge Egypt to ensure that any new counter-terrorism legislation complies with international standards on human rights and fundamental freedoms.

"We welcome the continued EU assistance in 2009, particularly for health care reforms. It is important that ENP funding directly focus on supporting Egypt in its reforms towards fulfillment of the Action Plan, particularly on human rights and good governance.


"Bilateral relations between EU-Israel remained strong in 2009. Israel remains active under the ENP framework and implemented a number of Action Plan priorities, including entering into agreement with the EU on agricultural and fish products in November 2009 and the implementation of four Twinning projects. However, upgrading of relations was affected by a worsening political context, in particular the Gaza conflict and a lack of progress in the Middle East Peace Process. Israel's military operations have given rise to international humanitarian law violations. The Council concluded that the EU remained committed to upgrading relations with Israel through the ENP but the political situation was not conducive to this.

"By mutual consent the 2005 Action Plan remains the reference document for EU-Israel relations and its validity has been extended to 2010.


"Jordan continues to be a constructive ENP partner. The report describes mixed progress: some progress was made on human rights and fundamental freedoms, including the fight against human trafficking. Good progress was made on justice reform and work progressed on penal reform, transparency, corruption, liberalising the economy in limited sectors. However, improvements in the business environment, trade and alleviating the growing poverty gap are required. We fully support Jordan's aspiration for an enhanced relationship and an intensified dialogue with the EU on common political and security challenges.


"Progress was made in electoral reform and Lebanon was one of only 2 countries in the South to invite an EU Election Observation Mission to its parliamentary elections in June 2009. The elections were in general deemed peaceful and well-organised but the subsequent negotiations on the forming of a government took 5 months. The protracted period of discussions led to a standstill in reform. However, in October 2009 the Commission held a conference in Beirut with representatives of Government, civil society, the private sector and EU. The next step is to take this co- operation[243] forward effectively.


"The English version of the progress report is awaited. We agree broadly with the Commission's assessment. Democracy and human rights reform plans are relatively unambitious but nevertheless some concrete progress was made within these constraints; a new electoral code reinforces the participation of women and work has begun in the fight against corruption.

"However, fundamental weaknesses in the legal system are likely to undermine the legislative reform work which has begun. On migration, work on readmission agreements did not progress as hoped. Reform of the justice system is therefore a key challenge as is the improvement of the climate for business. Obstacles in freedom of expression of the press remain and several demonstrations were dispersed violently. Poverty has been reduced slightly and advances in healthcare have been achieved but in general the social agenda remains a huge challenge.

"The Commission's focus on improving Morocco's poor social indicators and reducing poverty fits in well with HMG's CT priority for North Africa. It is believed that poor social inclusion was one of the key factors behind the 2003 and 2007 home grown terrorist incidents in Casablanca.


"The Occupied Palestinian Territories (OPTs) has made increasing use of the ENP in strengthening its state-building work. The EU supported its `Palestine, Ending the Occupation and Establishing the State' 2-year programme, adopted in 2009, while giving priority to the institutional reform detailed in the Palestinian Reform and Development Plan for 2008-2010. Work has begun on a plan for 2011-2013, the `Palestinian National Plan' which is expected to translate PM Fayyad's state-building plan into concrete priorities and which will be the basis for a new ENP Action Plan and is evidence of progress on reform and political dialogue with the EU.

"In general, nonetheless, we agree with the Commission that the ability of the OPT to implement reforms remains seriously limited as a result of the on-going Israeli occupation. The Gaza conflict between December 2008 and January 2009 destroyed its economic and institutional structures and worsened divisions in the Palestinian factions. Despite calls from the international community for full opening of crossings for humanitarian and commercial traffic the situation has continued. We share the EU objective of the creation of an independent, democratic and viable Palestinian state.


"The English version of the progress report is still awaited. We broadly agree with the Commission's assessment that progress has been made, but more work is needed. Economic and legislative reform helped the Tunisian economy achieve 3% growth, despite the global economic situation. The country continued its social agenda efforts and achieved good progress in social benefits, education, the fight against poverty and the protection of women's rights.

"However, the report highlights that problems regarding freedom of association persist. Presidential elections took place during 2009 and candidates from the opposition were not given full rights of visibility and public debate. Action Plan objectives were not achieved and there is a need for strengthened dialogue with the EU. Discussions will continue in the relevant committees."

57.12 The Minister concludes by noting that these documents have no financial implications, and that there may be ENP conclusions at July's Foreign Affairs Council meeting.


57.13 In the strictest sense, the Minister is correct in saying that these documents themselves have no financial implications. But the ENP itself certainly does: some €11.5 billion of European taxpayers' money in the current financial perspective.

57.14 Though launched two years ago as (in the then Minister for Europe's words) a "strategic refresh" of the moribund Euro-Med process, the Union for the Mediterranean has spent the subsequent two years bogged down in bureaucratic wrangling and the wider Middle East conflict. Though only a year old, the Eastern Partnership was one partner short from the outset due to the democratic failings of the regime in Belarus.[244]

57.15 While in introducing this "stock take", the Enlargement Commissioner talked of the EU's "transformative soft power spreading stability and prosperity beyond the enlargement area", the jury is still out on the extent to which the incentives offered under the ENP do and will drive reform in places where the local political elites are not already committed to it. As the Commission itself observes when it sums up its stock take, "the pace of progress is determined by the degree to which partners have been willing to undertake the necessary reforms, and more has been achieved in the economic sphere, notably trade and regulatory approximation, than in the area of democratic governance. However, the pace of progress also depends on the benefits that partners can expect within a reasonable time frame. Here the extent to which the EU has been willing to engage itself with the partnership has also had, and will continue to have, a significant effect."

57.16 At the end of the July Foreign Affairs Council Conclusions on the ENP, the Council invited the High Representative and the Commission, on the basis of the Commission Communication, "to initiate a reflection on the future implementation of the ENP and conduct consultations to this end inside the Union and with ENP partners, in view of a comprehensive discussion by the Council in the first half of 2011." We ask that the Minister deposits whatever document is presented to the Council prior to this discussion, with his views on it.[245]

57.17 In the meantime, we now clear the documents.

243   The Minister explains that the progress reports on Morocco and Tunisia have not been deposited in parliament yet as only the French version exists, and says that he will provide an Addendum when the English texts become available. Back

244   For the Committee's consideration of the Eastern Partnership, see chapter 62 of this Report. Back

245   The ENP conclusions are at pages 15 and 16 of the Conclusions of the 26 July 2010 Foreign Affairs Council, available at  Back

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