European Western Balkans

Remarks by Commissioner Hahn at the Economy Ministerial

Johannes Hahn; Photo: European Union

Ministers, distinguished guests, Ladies and Gentlemen,

Thank you for giving me the opportunity to address you at this working lunch for Economy Ministers.

Even at this difficult moment for the EU, we cannot afford to risk the stabilisation process in South Est Europe. The enlargement process will therefore continue moving forward. More than ever we need to work on restructuring the economic model to ensure that all countries are functioning market economies, and driven by export and investments rather than import and consumption. Connectivity measures are an important element in this respect.

Major progress has been achieved since the first meeting in Berlin two years ago, in particular regarding connectivity.

You have agreed to focus investment priorities on the core transport network and corridors as well as the projects of energy community interest. You have strengthened national investment planning systems through national investment committees and the establishment of single project pipelines.

Let me first give you a brief overview of where we stand as regards the 10 investment projects approved last year in Vienna for EU co-financing of just over € 200 million. The implementation of these projects has been mixed, but we should be able to “start digging” on two projects still this year.

The first is the Svilaj bridge between Bosnia and Herzegovina and Croatia on the “Mediterranean Corridor”. The second is the Electricity Inter-connector project in Montenegro. Construction will start in 2017 for the other projects with the notable exception of two: The first exception is the Albanian part of the electricity interconnector between Albania and the former Yugoslav Republic of Macedonia. The second is the Gradiska bridge between Bosnia and Herzegovina and Croatia on the “Mediterranean Corridor”. Overall, this is a reasonable result given the complexity of mobilising funds and the fact that less than 12 months have passed since the last summit. Still, we should aim to do even better in the future. This is the only way to demonstrate that the connectivity agenda is delivering concrete benefits and progress for the citizens.

I would also like to say a few words on the reform measures agreed last year. Investments without reforms make little sense, and the soft measures have been identified because they provide added value to the investment priorities. In the energy sector, it clearly does not make sense to invest in expensive inter-connectors of the transmission grids, if the countries are not willing to trade energy in the region. Trading would increase security of supply and reduce the need for additional expensive generation capacity. It would also ‘green’ the region because the renewables such as hydro-power in Montenegro and Albania could be easily exported to the neighbouring countries during peak production periods. In this context, our experts have already had a first meeting on developing a hydro master-plan for the Western Balkans. In the transport sector, opening of the rail market would clearly benefit consumers in terms of providing a better and more efficient service. It would also more easily attract investors including those from abroad if they could be sure of access to the entire corridor rather than merely national segments. So my overall conclusion on the soft measures is that much more work and will are needed.

Let me finally say a few words about this year’s connectivity funding decisions. We have reflected the progress on the soft measures in our funding decision, which we present today in Paris. We will provide € 96 million for 3 railway infrastructure projects in Serbia, Albania and in Kosovo. We will also provide € 50 million for greening measures such as energy efficiency in residential buildings and small scale Hydro projects. This brings the total investment package for 2016 to just about Eur 150 million. This demonstrates that we are serious about our commitment to making up to 1 billion in EU grant co-financing available for the connectivity agenda provided that reforms are implemented. I therefore urge you to make sure that the outstanding reform issues are implemented without delay. This also applies to the roadmap for the regional electricity market. To further facilitate this, we might need regular meetings at political level including with the advisors of the Prime Ministers.

Thank you

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