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EU Pledges More Funding As It Unveils Revamped Neighborhood Policy

  • Rikard Jozwiak

EU flags fly at European Commission headquarters in Brussels.

EU flags fly at European Commission headquarters in Brussels.

BRUSSELS -- The European Union has pledged an additional 1.242 billion euros ($1.746 billion) to countries in its immediate neighborhood over the next two years, but is tying aid to the pace of democratic reforms.

The pledges came in the EU's revised Neighborhood Policy, presented on May 25 in Brussels.

The new money comes on top of the 5.7 billion euros for the upcoming two years that the EU will provide to its 16 neighbors in the southern Mediterranean as well as the countries in Eastern Europe that still have not obtained EU candidate or potential candidate status.

Apart from financial support, the Neighborhood Policy offers closer political cooperation in a number of areas.

The EU’s foreign-policy chief, Catherine Ashton, was keen to point out that the EU was offering a new relationship with the countries to the south and east.

"Above everything, what we describe is partnership. We have a lot to offer, and we will benefit a great deal from thriving societies and economies in our neighborhood," Ashton said. "The investment that we make now is to the people striving for democracy, freedom, and a better life, and an investment for the people of Europe, too, in a strong neighborhood with whom we can work."

The review comes in response to the revolutionary changes sweeping the Arab world but it is also intended to influence Brussels' approach to Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine.

The buzzword of the review is "more for more," stating that "the more and the faster a country progresses in its internal reforms, the more support it will get from the EU."

New Focus

For recalcitrant states, the approach could be described as "less for less." The document promises that "for countries where reform has not taken place, the EU will reconsider or even reduce funding."

The budgets for the Neighborhood Policy have previously been divided so that the southern neighbors receive two-thirds of the allocated money and the countries in the east the other third.

But the EU's enlargement and neighborhood commissioner, Stefan Fuele, said that would no longer be the case.

"Does it mean that this top-up money we were talking about will be distributed along the same ratio? No, it doesn't mean [this]," he said. "If we are serious about the principle 'more for more,' if we are serious about supporting particularly those countries which embark on a significant, deep reform process, we need to put the money there and not be guided by geography here. I hope very much that the same principle will be also applied as far as the next multiannual framework."

Ashton underlined that the key is to make the national programs suited for each partner country instead of a general approach to the neighborhood.

"It is not a one-size-fits-all approach," Ashton said. "Rather, it is a recognition that each of our neighbors are different and that we want to offer support that is tailor-made to each. Those countries who choose to move faster and further to reform will be able to draw down resources to help them to achieve that goal."

The idea is also that each partner country will propose a limited number of short- and medium-term priorities instead of comprehensive reform programs. More precise benchmarks, as well as a clearer plan for what specific actions will be taken, are also in the pipeline.

The new European Neighborhood Policy focuses on three areas: democracy building, economic development, and the strengthening of the two regional dimensions of the neighborhood, including the Eastern Partnership for the six post-Soviet countries.

To boost democracy, Brussels proposes the establishment of a "European Endowment for Democracy" that will support political actors striving for democratic change in their respective countries.

The EU will also be ready to increase its involvement in formats where it is not yet represented such as the Organization for Security and Cooperation in Europe's (OSCE) Minsk Group, which deals with the frozen conflict in Azerbaijan's breakaway region of Nagorno-Karabakh.

Trade And Economy

On the economic front, countries willing to reform will be offered an "enhanced investment protection scheme" that will provide legal security to investors in the countries to the east and south of the EU. The paper also suggests the use of a Macro-Financial Assistance (MFA) instrument "to assist partner countries to address short-term balance-of-payments difficulties."

With only Ukraine so far negotiating a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, Brussels will offer trade concessions in certain sectors for other countries that are not yet ready to embark on such negotiations.

In an attempt to increase mobility, the EU suggests a "Common Knowledge and Innovation Space," which would increase exchanges for students and academics and improve cooperation in research and innovation.

The document states that the commission seeks to conclude negotiations with Armenia on a so-called mobility partnership. Moldova and Georgia already have such a deal -- which lets people such as students and businessmen easier entry to the bloc. Assistance for Ukraine and Moldova to implement their visa-liberalization action plans are also to continue.

Individual Reports

The review also includes individual country reports.

On Ukraine, the commission notes that the situation concerning human rights, fundamental freedoms, and the rule of law "has deteriorated" over the past year and that "progress on political and constitutional reforms in particular has been slow or sporadic."

On Azerbaijan, it says there was "no substantial progress with respect to democracy and the protection of human rights and fundamental freedoms." The paper does however point out that the country fared well economically despite the global financial crisis and that Baku made progress in areas related to macroeconomic stability and the fight against poverty.

Armenia is described in slightly rosier terms with positive steps mentioned such as the decriminalization of defamation, progress on judicial reform, and enhanced freedom of expression. It was noted, however, that "no progress was made in improving prison conditions or the juvenile justice system" and that media pluralism remains limited.

Georgia is also asked to do more to "consolidate democracy in the areas of political media and pluralism" as well as boosting conditions in a number of fields including the improvement of rights and integration of minorities, fighting the corruption amongst high ranking officials and strengthening freedom of association.

The to-do list for Moldova is equally substantial and mentions the need to fight against human trafficking and to introduce more judicial reforms to safeguard the rule of law.

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