Europe and Russia on the eve of the 21st century

Transcription

1 SPEECH/97/166 Hans van den Broek Member of the European Commission Europe and Russia on the eve of the 21st century Check Against Delivery Seul le texte prononcé fait foi Es gilt das gesprochene wort The Moscow School for Political Studies Moscow, 29 August 1997

2 Introduction It is a great pleasure to offer some thoughts today before such a distinguished audience on the future of Europe and Russia on the eve of the 21st century. It is even more of a pleasure to be visiting Moscow on the 850th anniversary of the city. Each time I visit the city I am more and more impressed by the changes which are taking place in Russia s famous capital. I have noticed that many historical buildings and architectural monuments are being restored. Among them is the old mansion on Bolshaya Ployanka Street, which has also been restored and is now, I am pleased to say, the residence of Dr Ottokar Hahn, the Head of the European Commission s Delegation in Russia. The quality of the restoration work was acknowledged in the award of the Laureate prize by the Russian Federation. I would also like to pay tribute to our host today, the Moscow School for Political Studies. Since its inception five years ago, the School has played an important role in the spread of democracy throughout Russia. I have been particularly impressed by the way the School has brought together parliamentarians from the Duma, members of regional legislatures and young leaders from the administrative, business and intellectual communities. I am also pleased that the School has secured some funding from the Tacis Democracy programme to continue its good work. In my brief presentation today I would like to make some remarks about the reform process in Russia, discuss EU-Russia relations, and then bring you up to date on some important recent events in the European Union. Reform in Russia Let me now turn to the immense reform process in Russia. By any standards, the changes in Russia over the past decade have impressed us. There have been several free and fair elections and Russia has made an impressive start, under very difficult circumstances, in establishing a market economy. The new government has made a determined effort to reduce inflation, and at the same time to liberalise trade and prices. There are encouraging signs that the downturn is levelling out and that economic growth is likely to show by next year. But sustained economic growth will require considerable foreign investment in order to modernise Russian industry and improve its export potential. We are convinced that investment would increase substantially if there was an improved investment climate. This could be achieved, for example, if the rights of economic operators were better protected, more modern accounting practices were introduced and the level of economic crime reduced. The EU is prepared to assist Russia in these areas and contacts are already under way to launch a number of major joint initiatives to improve the legal protection of economic operators, to promote the establishment of foreign investment bodies, and to provide Russian businessmen with the opportunity to share experience with our enterprises. 2

3 We are encouraged by the initiative taken by the Russian government to propose changes to the tax system. This would be a major improvement to the investment climate in Russia and we hope that the Duma will soon adopt the necessary legislation. Again the EU stands ready to provide support aimed at the swift implementation of the new tax code. Talking of the investment climate, we are concerned to see the Duma considering draft legislation which would exclude or limit foreign investment in many important economic sectors. Of course, we understand Russian worries about some sectors of their economy being dominated by foreign companies. Some in the EU had similar fears in the past. But we have found that inward investment helps to create new jobs, transfer technology and skills and develop a bigger market and wider business opportunities. EU-Russia Relations Last month we discussed EU-Russia relations with Prime Minister Chernomyrdin on his first visit to the European Commission in Brussels. Trade matters are an important part of our relationship. 40% of Russia s total foreign trade is with the Union. However, we agreed that the time was ripe to broaden the base of EU- Russia relations. We explored new avenues for co-operation in the transport, energy, science and technology, space, industry and other fields. By the end of this year the Partnership and Co-operation Agreement between the European Union and Russia should enter into force. This Agreement is the centre piece of our future co-operation in a wide range of areas and we have a common interest in ensuring its rapid implementation. Political co-operation between the EU and Russia has developed rapidly in recent years and now we have a regular dialogue at all levels covering the full spectrum of foreign and security policy issues. These exchanges take place in a remarkably open and co-operative spirit even when we are discussing some difficult issues such as the situation in the former Yugoslavia and the Middle East. Turning to our trade relations, we note that two-way trade has continued to expand steadily in recent years. Russia has traditionally enjoyed a comfortable trade surplus with the Community but the vast majority of exports have been energy products or raw materials. Our task is now to broaden our trade relations and to include more manufactured and semi-finished goods in Russian exports. There is some concern in Russia about the application of defensive instruments of the EU s commercial policy. But products falling under anti-dumping measures account for less than one per cent of Russian exports. Within this one per cent there are sensitive sectors but we are aware of the problems and are trying to work out agreed solutions within WTO rules. We are organising a seminar on anti-dumping legislation in Moscow in September which should improve mutual understanding. 3

4 From our side, however, we also have some concerns. We would like to see Russia review its own legislation on a number of non-tariff barriers, such as combating counterfeiting (holograms) and in standards and certification of goods. The EU advocates greater participation of Russia in the world economic order. This is the best way to underpin economic reform. This is why we favour Russia s accession to the WTO as soon as possible and why we are supporting Russia through a Tacis programme designed to prepare its negotiating position. But negotiations have to be well prepared leading to satisfactory conditions for entry. We are not asking from Russia for more stringent conditions than those normally looked for from newly acceding countries in regard to market access. Accession to the WTO would also have the advantage of solving a number of other outstanding issues such as the protection of intellectual property rights and further harmonisation of customs procedures. Technical Assistance So far, the EU has provided more than 1200 million ECU of technical assistance to Russia. EU assistance under Tacis is the single largest grant based programme of technical co-operation in Russia. Tacis already has helped restructure Russian agriculture, modernise its industry, tackle environmental issues and train thousands of managers. It is increasingly dealing with political priorities such as the retraining of Russian military officers and the conversion of the chemical defence industry. This latter programme is, however, dependent on the Duma ratifying the Chemical Weapons Convention. We have also been active in the field of nuclear safety with over 250 Mecu allocated to projects. It is our intention to improve further the efficiency of Tacis by concentrating on key areas. Therefore we are willing to continue our support to further upgrade the safety of nuclear power plants. In this context, it would be of great help for our operators if the Duma would ratify the Vienna Convention on Civil Nuclear Liability. Future Co-operation There is now a common border of more than one thousand kilometres between the EU and Russia after the accession of Finland to the EU. This requires further joint efforts to modernise border regimes. Russia has an interest in increasing duty and tax receipts through a more efficient customs service. We understand that at present Russia loses an estimated $1 billion per month in revenue. Both the EU and Russia have an interest in combating illegal trafficking of goods at border crossing points whilst at the same time shortening costly delays for our exporters in clearing customs. We have therefore recently launched a new cross border assistance programme (30 MECU) designed to improve cross border roads and other infrastructure. Through training and installation of modern equipment, customs clearing facilities for hauliers will be upgraded. 4

5 Further co-operation opportunities are presenting themselves especially in areas such as Research and Development, space, modernising of education systems and the information society which is essential to further modernise Russia s infrastructure and communication links. We strongly recommend that the Duma soon ratifies the Energy Charter as this is another major area of our co-operation. Let me also say a few words about educational and cultural co-operation. For too long our peoples have been deprived of contacts with each other. But now the ideological barriers have gone, we must do everything to promote cultural cooperation, particularly amongst young people. There are already over 300 Russian students studying at universities in the EU and we plan to triple this over the next twelve months. We also want to expand inter-university links with a view to developing joint curricula, which will be an important step towards the longerterm aim of achieving mutual recognition of degrees and diplomas. The Treaty of Amsterdam Let me now say a few words about the process of ever-increasing European integration whose fiftieth anniversary we just celebrated. This year has been of particular importance for the Union. We have agreed a new Treaty of Amsterdam which will further deepen the process of European integration. We have decided on new measures to promote employment, the environment, public health and social policy and also to co-operate closer in sensitive areas such as asylum and immigration, combating crime and drugs. We have made arrangements to extend the powers of the European Parliament and we have agreed on measures to improve the effectiveness of our common foreign and security policy. The Amsterdam European Council also confirmed the timetable and criteria for the launch of the single currency - the Euro - in January This will be a major step forward for the integration process, as well as a huge technical operation. Providing that all member states eventually participate, some 50 billion new coins and banknotes will be needed. These would have to be ready by 2002 when the national currencies of participating states will disappear. The advantages for Russian traders and economic operators will be more transparency in the EU market and a considerable reduction in transaction costs. The single currency is the logical extension of the Union s single market, which now encompasses 370 million consumers, and produces more goods and services than either the USA or Japan. Enlargement of the European Union will add some additional 100 million consumers to that market. 5

6 Enlargement Last month also witnessed another milestone in the development of the EU with the Commission presenting its Opinions on applications by ten Central and East European Countries for membership in the Union. These Opinions provide an objective evaluation of the applicants progress in establishing stable institutions guaranteeing democracy and human rights, putting into place market economies, their competitive capacity and their readiness to fulfil the other obligations of membership. The Opinions formed part of a report Agenda 2000 containing proposals to prepare the Union for the challenges of the first decade of the 21st century. It also highlights the policy implications of such an unprecedented enlargement process. Whilst emphasising that all ten candidates will be part of the enlargement process, the Commission recommended that the Union should commence the accession negotiations next year with six countries - Poland, Hungary, the Czech Republic, Slovenia, Estonia, as well as Cyprus - and simultaneously increase assistance to all applicants. Our heads of state and government meeting in Luxembourg in December will decide on the proposals put forward by the Commission. All the applicants are unlikely to join the Union on the same date. The date of accession will depend on progress in preparing for membership and the complexity of issues to be resolved with each applicant. The enlargement of the EU will also increase the importance of regional cooperation in Europe. We are pleased to note that Russia is an active participant in regional co-operation schemes such as those covering the Barents Sea, the Baltic Sea and the Black Sea. Such schemes are important confidence building measures in the new Europe where so many of today s problems can only be tackled successfully by cross-border co-operation. Last month NATO also agreed to enlarge and take in Poland, Hungary and the Czech Republic. We are aware that this was not a popular decision in Russia. However, in our sincere conviction, no one can argue that NATO enlargement is directed against Russia. Indeed the newly established Permanent Joint Council ensures that there will be a continuous close relationship between Russia and NATO on all aspects of European security. Like EU enlargement, NATO enlargement is designed to strengthen stability and security. This is very much in Russia s own interest. 6

7 Conclusion Mr Chairman, Ladies and Gentlemen, The European Union is engaged in unprecedented endeavours to meet internal and external challenges be it the introduction of a single currency called the Euro or the realisation of further EU enlargement. But, we have also reserved part of our energy for the determination to strengthen and deepen our relationship with this great country: the Russian Federation. This stems from the conviction that mutual co-operation provides a vital contribution to the maintenance of peace and stability in Europe, including its further development of economic prosperity. The challenges on the eve of the 21st Century are therefore not only to stimulate a further development of trade and economic links, but, also to diversify our relations and renew our traditional political and cultural ties which are a major component for building a new Europe. Finally, Mr Chairman, I would like to thank the Moscow School of Political Studies for providing me with this platform today. I am confident that it will continue to play an important role in the reform process and help to cement ties between Europe and Russia well into the next century. I thank you for your attention. *** 7