The events that played out in Tunisia and Egypt in early 2011 have led the European Union to question the relevance of its neighbourhood policy, and this at a time of revolutions in Libya and even in Syria. Having accepted its failure, the time has come to renew it and to adapt it to new situations. On 8 March, the European Commission and the EU’s high representative for foreign affairs issued a joint communication entitled a ‘Partnership for democracy and shared prosperity’. Democratic transformation, economic development and ‘mobility’ (in EU jargon, this term covers visa policies and legal immigration) are the three cornerstones of a new approach, which still needs to be fine-tuned.

Welcomed by the extraordinary European Council on Libya and the Mediterranean region, on 11 March, the next Council, on 23-24 March, will no doubt adopt new conclusions on the subject. A second communication devoted more broadly to Europe’s neighbourhood policy, which is due to be published in May, will be a chance to fine-tune the strategy. Finally, the June European Council is due to take a stance on a package of measures to be adopted.

CONDITIONALITY

Overall, the new approach aims to be based on incentives and on greater differentiation.

“Those [countries] that go further and faster with reforms will be able to count on greater support from the EU,” says the communication. Respect for human rights and good governance are now likely to be the basis for any political cooperation between the EU and every Mediterranean partner. Cooperation may go as far as granting advanced status. This status is designed to establish deeper relations than simply an association agreement but it still needs to be further defined. For the time being, the communication underlines that “this will encompass deeper engagement on mobility and improved access to the EU market”.

STABILITY AND DEMOCRACY

As the aim is to help Mediterranean countries create a democratic and stable environment, the emphasis is put, in the first instance, on justice reforms, stepping up transparency and fighting corruption. The text also stresses more support from civil society by proposing the establishment of a neighbourhood facility for civil society.

But strengthening Euro-Mediterranean cooperation also needs to take up the mobility challenge for people on the two sides of the Mediterranean. ‘Mobility partnerships’, visa facilitation and even visa liberalisation partnerships are listed in the longer term in exchange for the stepping up of measures to combat illegal immigration.

Trade and investment – whose development requires a stable environment and more mobility – are areas already put forward. The communication therefore suggests accelerating the adoption of different procedures, including in particular pan-Euro-Mediterranean preferential rules of origin, agreements on agricultural and fisheries products (Morocco and Tunisia) and negotiations on trade in services. Finally, in the longer term, the aim is to conclude in-depth free trade agreements.

EIB’S ROLE UNDERLINED

In terms of economic development, international financial institutions should play a significant role in the promotion of small and medium-sized enterprises (SMEs). The communication urges member states to approve the European Parliament’s proposal to increase loans granted by the European Investment Bank (EIB) in the region by one billion euro.

The EIB’s resources are set to come to €6 billion by 2013. The EU’s 27 member states are also asked to adopt the Commission’s May 2008 proposal on reusing funds from the reimbursement of previous operations by beneficiary countries. This measure would allow it to generate some €120 million quickly. However, it remains to be seen if shareholder member states are ready to part with these reimbursements. Finally, while the extension of the EBRD’s (European Bank for Reconstruction and Development) mandate to the region is also proposed, the option of a Euro-Mediterranean bank is ignored for now.

As for financial assistance, provided by the European Neighbourhood and Partnership Instrument (ENPI - see box), the communication envisages a reorientation – and not an increase in aid – of bilateral programmes for 2011-2013. Nothing concrete is put forward except for the fact that the EU has a budget of €4 billion for that period. As for the sensitive issue of increasing aid, private investments are favoured. And, once again, the communication insists here on the key roles of the EIB via the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and international financial institutions. In addition, the communication invites member states to contribute more to strengthening the Neighbourhood Policy Investment Facility. Set up in 2008, the instrument aims to finance big projects in the regions, such as transport, energy and environment projects and the social and private sectors. The communication also stresses the strengthening of sectoral cooperation starting with the establishment of an ‘energy community’ between the EU and the Southern Mediterranean. But it also refers to education, tourism, transport and electronic communications technologies.

UNION FOR THE MEDITERRANEAN

Finally, emphasis is placed on regional integration. The communication comes back to the sensitive issue of the Union for the Mediterranean (UfM). This was created in 2008 under the then French Presidency of the EU. It is an intergovernmental organisation bringing together 44 countries (27 EU member states and 17 countries from the Mediterranean area) and has its headquarters in Barcelona. The UfM was meant to relaunch the 1995 Barcelona process, an objective which failed (see interview).

While France advocates that it is recast, the Commission cautiously sets out some areas to relaunch it, stressing in particular its role in realising projects that create jobs, projects for innovation and projects for growth but also its role in the Middle East peace process.

The text also stresses more support from civil society by proposing the establishment of a neighbourhood facility for civil society

Aid programmes financed by ENPI

Set up in 2007, the European Neighbourhood and Partnership Instrument (ENPI) finances cooperation programmes between the EU and each partner country. For the 2007-2013 period, after having defined a strategic document, the two parties agreed on national indicative programmes for the periods from 2007 to 2010 and from 2011 to 2013. Annual action programmes are developed on the basis of these programmes.

The implementation of the said programmes is done according to a budgetary approach or by project. It is all about finding a balance between the two. Overall, the first approach aims to give money directly to the budget of the beneficiary state mainly to finance reforms. The payments are subject to conditions that the partner has to fulfil in advance. Separately, the second approach supports initiatives and projects that are clearly identified. Generally, its implementation results in a contract between the European Commission and experts, NGOs and, in some cases, the government of the partner country.