Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents


27 The EU and Kosovo: Stabilisation and Association Agreement (SAA)

Committee's assessment Legally and politically important
Committee's decisionNot cleared from scrutiny; further information requested
Document detailsProposal for Council Decisions on the conclusion and signing of a Stabilisation and Association Agreement (SAA) between the EU and Kosovo
Legal base(a) Articles 217, 218(6)(a)(i) and 218(8) TFEU; unanimity (b) Article 101 Euratom; QMV

(c) Articles 217, 218(5) and 218(8) TFEU; unanimity

DepartmentForeign and Commonwealth Office
Document numbers(a)  (36826), 8532/15 + ADDs 1-3, COM(15) 181;

(b)  (36827), 8534/15 + ADDs 1-3, COM(15) 182;

(c)  (36828), 8535/15 + ADDs 1-4, COM(15) 183

Summary and Committee's conclusions

27.1 Kosovo became independent on 17 February 2008. The Minister for Europe (Mr David Lidington) notes that the United Kingdom was the first country to recognise Kosovo. The Government's objective is "a stable, prosperous and multi-ethnic Kosovo, making progress towards eventual EU and NATO membership", and both it and its predecessor have consistently wanted to see Kosovo joining other Western Balkans countries in concluding an SAA (Stabilisation and Association Agreement[ 257]).

27.2 Negotiations started in October 2013, and the draft text of the agreement was initialled in July 2014. The Agreement identifies a number of aims and areas for co-operation between the EU and Kosovo: to help strengthen democracy and the rule of law; to contribute to political, economic and institutional stability; to provide an appropriate framework for political dialogue; to support Kosovo's efforts to develop its economic and international co-operation; to support Kosovo's efforts to complete its transition to a functioning market economy; to promote harmonious economic relations and gradually to develop a free trade area between the EU and Kosovo; and to foster regional co-operation.

27.3 The Minister characterises Kosovo as "a key driver of regional stability", and states that it is therefore strongly in UK interests that progress and development in Kosovo is maintained. He emphasises the importance in the Government's eyes of "a credible European future if its leaders are to sustain the path of reform", and states that "the promise of an SAA has helped to drive continuing reform". Kosovo "remains committed to implementation of its agreement of April 2013 on the normalisation of its relationship with Serbia", and its new government has "remained firmly committed to the reform agenda and is focusing on the country's serious socio-economic problems". The "European perspective" offered by the SAA "remains critical to this process", because it "reassures Kosovo's people, and helps promote stability at a sensitive time for security on Europe's borders". Signature and implementation of the SAA will help promote integration in Kosovo; will create pressure for Kosovo's leaders to make hard choices on the rule of law and much needed political and economic reform; and will bring added scrutiny and assistance to help strengthen Kosovo's weak public institutions. Conversely, the loss of Kosovo's European perspective would be very damaging. For all these reasons, "the UK strongly supports signature, conclusion and ratification of an SAA with Kosovo".

27.4 The "normalisation" process to which the Minister refers was reached after ten rounds of the "EU-facilitated Dialogue", chaired by the then EU High Representative (Baroness Ashton), on 19 April 2103, when Serbia's then Prime Minister Ivica Dai© and Kosovo's then Prime Minister Hashim Thaçi finally reached a landmark agreement aimed at normalising relations between Serbia and Kosovo.[ 258] The agreement came just before the 22 April 2013 meetings of the EU's General Affairs and Foreign Affairs Councils. At stake was whether to open negotiations on Serbia becoming a possible EU member and an SAA between Kosovo and the EU. An agreement on normalisation of relations would open a European integration future for both; failure to agree would set this back and freeze the process. On 28 June 2013, the European Council agreed to open accession negotiations with Serbia, which began in January 2014. From the political perspective, this SAA is the quid pro quo for Kosovo.

27.5 The "EU-facilitated Dialogue" process continues. So far as whether implementing this SAA will in practice produce "pressure for Kosovo's leaders to make hard choices on the rule of law" remains to be seen; the most immediate such hard choice concerns sustained and effective Government support, in the face of determined political opposition, for the investigative process in which the EU's largest CSDP mission is involved, viz., establishment of a special out-of-country court regarding EULEX's Special Investigative Taskforce. But the Minister's judgement that failure to sign and ratify this Agreement would be damaging appears to be well-founded.

27.6 There are, however, nonetheless substantial legal and procedural concerns over some of the details. The Minister asserts that the UK opt-in is triggered. In principle we share the doubts now expressed by the EU institutions, although their position is considerably complicated by the fact that the current text of the Agreement recognises that the UK opt-in is triggered.

27.7 On the basis of the Government's assertion that the UK opt-in is triggered, we ask the Minister, in the light of earlier Government undertakings,[ 259] whether he was in a position to provide the Committee with an indication of the factors affecting the opt-in decision when he provided the Explanatory Memorandum and whether he can do so now.

27.8 We support the principle of transparency over the UK opt-in in the text of international agreements. The parties to those agreements are entitled to clarity as to which provisions apply (or not) to the UK or the EU. We urge the same degree of transparency in future external agreements. However, in this case, that apparent transparency is replaced by legal confusion if the consequential Decisions enabling the EU to sign and conclude the Agreement (documents (a) and (b)) were to be, on their face, inimical to the UK opt-in. That will happen if the proposals as they stand are adopted. Given the requirement for unanimity for their adoption, we expect this legal confusion to be sorted out; and ask the Minister how he proposes to do so, including the possibility of adding a legal basis to each Decision from Title V of Part Three TFEU.

27.9 Normally, where an external agreement covers a matter where competence is shared, we follow our predecessors in favouring the Member States' exercising that competence. That cannot happen here as only the EU is entering into this SAA. However, as recital (5) to each proposed Decision makes clear, the SAA covers matters of shared competence. The Minister indicates that the UK has accepted an EU only Agreement in return for assurances that it would make clear that it is a unique case, that it does not change the current distribution of competence, and that it does not set a precedent for future EU agreements. We ask the Minister to indicate where in the text of SAA or, more appropriately, the proposed Decisions these assurances are given concrete expression. We also ask the Minister to identify those elements of the SAA which fall within shared competence.

27.10 We support the Minister's view on the need for a CFSP legal base and note, moreover, that there was one for the original Council Decision authorising the negotiation.

27.11 In the meantime, the Council Decisions remain under scrutiny.

Full details of the documents: (a) Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Stabilisation and Association Agreement between the European Union and the European Atomic Energy Community, of the one part, and of Kosovo*, of the other part: (36826), 8532/15 + ADDs 1-3, COM(15) 181; (b) Recommendation for a Council Decision approving the conclusion, by the European Commission, on behalf of the European Atomic Energy Community, of the Stabilisation and Association Agreement between the European Union and the European Atomic Energy Community, of the one part, and of Kosovo*, of the other part: (36827), 8534/15 + ADDs 1-3, COM(15) 182; (c) Proposal for a Council Decision on the signing, on behalf of the European Union, of the Stabilisation and Association Agreement between the European Union and the European Atomic Energy Community, of the one part, and of Kosovo, of the other part: (36828), 8535/15 + ADDs 1-4, COM(15) 183.

Background

27.12 Following the Commission's publication of its Annual Enlargement Package in October 2012, the December 2012 General Affairs Council (GAC) agreed conclusions on the reports on individual enlargement countries. Inter alia, these noted that the Council would return to the questions of Macedonia and Serbia opening accession negotiations, and of Kosovo opening negotiations on a Stabilisation and Association Agreement (SAA), under the next Presidency, with reports to be presented on these issues by the Commission and High Representative/Commission Vice President in the Spring 2013. The reports were designed to provide a basis for the Council to take stock and give direction ahead of enlargement discussions and possible decisions at the 25 June GAC and the June 2013 European Council.

27.13 The reports on Macedonia and Serbia analysed the further progress towards meeting the Copenhagen criteria for membership: particularly the areas in which the December 2012 GAC conclusions had called for further action. The Kosovo report analysed specific issues set out in those conclusions concerning Kosovo's readiness to negotiate an SAA.

27.14 With regard to Kosovo, the then (and current) Minister for Europe said:

"In October 2012, the Commission issued a Feasibility Study for a Stabilisation and Association Agreement (SAA) between the European Union and Kosovo. The study concluded that Kosovo is largely ready to open negotiations for a SAA, but that there were four short-term priorities that needed to be met. The Commission assesses that the four priorities have been met. The Commission has submitted its proposal for a Council Decision authorising the opening of negotiations on a Stabilisation and Association Agreement. This document is classified as 'restraint' and so will not be provided for scrutiny; however we will write to the scrutiny committees once the draft proposal has been adopted in Council, outlining the UK's position in the ensuing negotiations."

27.15 As detailed in our predecessors' Report of 21 May 2013, the heart of the matter had then been the positive developments, since April 2013, in the Serbia/Kosovo relationship, culminating in the initialling in Brussels by the prime ministers of both countries of the "First agreement of principles governing the normalisation of relations". For the Minister, this demonstrated the powerful influence that a conditions-based EU enlargement process could bring to bear in improving neighbourly relations and promoting regional security and stability. Brokered (over no fewer than ten rounds of talks) by the then EU High Representative for Foreign Affairs and Security Policy, it was described by The Economist as "nothing short of historic".[ 260]

27.16 The emphasis thereafter was on implementation, with the UK and Germany in the lead, and the focus on dismantling the "parallel structures" of Serbian governance in northern Kosovo. As the Minister made clear in his three subsequent letters (set out in our predecessors' other Report[ 261]), the process was expected to go down to the wire, and did.

27.17 In the third of those letters, of 10 July 2012, the Minister declared himself pleased that — "as set out in the post European Council statements to the House" — the European Council had agreed to open accession negotiations with Serbia and that a negotiating mandate for a Stabilisation and Association Agreement (SAA) with Kosovo was adopted. The Minister attached copies of the relevant conclusions,[ 262] and said that these decisions "represent significant steps forward for Serbia and Kosovo on their respective EU paths".

27.18 The Minister confirmed that the decision on whether to agree to open accession negotiations with Serbia "was a finely balanced one". The Government had taken the decision only shortly before the European Council that Serbia had made sufficient progress against the conditionality of a "visible and sustainable improvement in relations with Kosovo" to warrant a positive decision on opening accession negotiations. Nonetheless, the process of normalisation of relations with Kosovo would need to continue throughout the accession process, with full normalisation of relations before Serbia could accede to the EU; the Government had therefore secured GAC conclusions that agreed that steps leading to the normalisation of relations between Belgrade and Pristina would also be addressed in the negotiating framework for the accession negotiations.[ 263]

27.19 Turning to Kosovo, the Minister continued thus:

"A good outcome was secured also for Kosovo, with the adoption of the negotiation mandate for the Stabilisation and Association Agreement (these documents, as set out in previous correspondence, are classified). As the first milestone on the road to EU membership, this sends an important signal that Kosovo's future is European. As set out previously, the five EU countries which have yet to recognise Kosovo opposed the negotiating of an SAA which would require Member State signature and ratification. I very much regret that they chose to adopt this position. Whilst we respect the non-recognisers' positions, it is evident that non-recognition complicates Kosovo's EU track.

"As the negotiating directives for the SAA are on an EU-only basis, the UK has taken a rigorous approach in ensuring that the directives are confined to areas of EU competence only and that they do not represent any shift in competence. The amendments the UK secured to the original Commission text, taken as a package and individually, are visible and strong safeguards of UK positions on matters of competence. They fortify an overarching principle of this negotiation: that an EU-only SAA is without prejudice to any future negotiations on similar agreements, or to the positions of EU institutions and Member States on competences.

"On the CFSP elements of the negotiating directives, we have secured important safeguards. The scope of CSFP matters is reduced by excluding certain elements such as those relating to non-proliferation and counter-terrorism. The negotiating directives include specific CFSP legal bases (article 37 TEU and Article 31(1) TEU). Citing Article 37 makes clear that it is the High Representative (and no one else) who will be engaging on the aspects of CFSP specified in the EU-only agreement. The Council and the Commission also agreed in a statement that the adoption of the decision to authorise the EU to negotiate an SAA with Kosovo is without prejudice to the nature and scope of any similar agreements to be negotiated in the future in particular as regards matters falling within the Common Foreign and Security Policy. This is also reiterated in the recital of in the non JHA Council Decision, 'Whereas this authorisation to negotiate an SAA with Kosovo as an EU-only Agreement is without prejudice to to the nature and scope of any similar agreements to be negotiated in future, in particular as regards the Common Foreign and Security Policy'.

"In the area of Title V JHA measures, we have secured a strong package of safeguards which protects our position fully, including through recognition of our opt-in rights in respect both of this negotiating mandate and of the future signature and conclusion stages of the agreement. We have secured language which makes clear that the outcome of negotiations on any JHA matters is not binding on the UK unless we choose to opt in. The safeguards we have secured are mutually reinforcing, and render explicit the distinct nature of JHA in relation to the SAA as a whole.

"The Council Decision on the SAA mandate was split, allowing for a separate Council Decision on JHA areas. As stated in both Council Decisions, the UK is not bound by or subject to the application of the Council Decision insofar as it relates to the Area of Freedom, Security and Justice covered by Title V of the Treaty on the Functioning of the European Union. The SAA negotiating directives now cite a substantive legal basis on JHA, (Article 79(3) TFEU) making it clear that the opt-in applies. Moreover, to address the concern that other JHA legal bases might need to be cited consequent to the outcome of the negotiations, a recital was inserted in the non-JHA Council Decision, noting that the application of the opt-in will need to be assessed at signature and conclusion stage.

"No formal start date for the SAA negotiations has been announced, but we expect they will open in the autumn. It will be important for Kosovo to keep up momentum on reform and continue to play its part in implementing the 19 April agreement with Serbia."[ 264]

The draft Council Decisions

27.20 In his Explanatory Memorandum of 18 June 2015, the Minister notes that, on 30 April 2015, the European External Action Service (EEAS) circulated the document, a Proposal for a Council Decision on the Signature of the Stabilisation and Association Agreement (SAA) between the European Union and Kosovo; and then on 4 May 2015, circulated the documents: a Proposal for a Council Decision on the Conclusion of the Stabilisation and Association Agreement (SAA) between the European Union and Kosovo; and a Recommendation for a Council Decision by the European Commission on behalf of the European Atomic Energy Community, of the Stabilisation and Association Agreement (SAA) between the European Union and Kosovo.

The Government's view

27.21 The Minister describes the Government as "a strong supporter of Kosovo's progress towards eventual EU membership" and emphasises the importance in his eyes of signature, conclusion and ratification of an SAA to continuing reform in Kosovo and implementation of its agreement of April 2013 on the normalisation of its relationship with Serbia (see paragraph 27.04 above for detail).

27.22 The Minister then notes that the five EU Member States that do not recognise Kosovo[ 265] insisted on an EU-only SAA:

"The UK accepted this, in return for assurances that the agreement would make clear it is a unique case, that it does not change the current distribution of competence, and that it does not set a precedent for future EU agreements. We are also seeking the citation of a CFSP legal base."

27.23 Looking ahead, the Minister says:

"It is not yet clear when the Council will be invited to adopt the Council Decision, opening the way for signature of the SAA. The European External Action Service (EEAS) and the Commission have indicated that the Decisions are expected to be adopted before the summer. The final language versions of the Council Decisions have not yet issued. However, since the EU Institutions do not agree that the UK's opt-in Protocol applies to this SAA, adoption may take place before the usual JHA opt-in three month deadline."

Previous Committee Reports

None, but see (34866), 8740/13 and (34867), 8742/13: Twelfth Report HC 83-xii (2013-14), chapter 20 (17 July 2013) and Third Report HC 83-iii (2013-14), chapter 24 (21 May 2013).


257   The Stabilisation and Association Agreement constitutes the framework of relations between the European Union and the Western Balkan countries for implementation of the Stabilisation and Association Process. The agreements are adapted to the specific situation of each partner country and, while establishing a free trade area between the EU and the country concerned, also identify common political and economic objectives and encourage regional co-operation. In the context of accession to the European Union, the agreement serves as the basis for implementation of the accession process. Back

258   See press release of 19 April 2013 Serbia and Kosovo reach landmark deal for full background. Back

259   By the then Leader of the House of Lords, Baroness Ashton of 9 June 2008 affirmed by the Minister in his Written Ministerial Statement of 20 January 2011. Back

260   See (34866), 8740/13 and (34867), 8742/13: Third Report HC 83-iii (2013-14), chapter 24 (21 May 2013). Back

261   See (34866), 8740/13 and (34867), 8742/13: Twelfth Report HC 83-xii (2013-14), chapter 20 (17 July 2013). Back

262   General Affairs Council conclusions of 25 June 2013 and European Council conclusions of 26-27 June 2013. Back

263   See (34866), 8740/13 and (34867), 8742/13: Twelfth Report HC 83-xii (2013-14), chapter 20 (17 July 2013). Back

264   See (34866), 8740/13 and (34867), 8742/13: Twelfth Report HC 83-xii (2013-14), chapter 20 (17 July 2013). Back

265   Cyprus, Greece, Spain, Slovakia and Romania. Back


 
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Prepared 30 July 2015