Former Yugoslavia: prospects for developping regional cooperation

OBJECTIVE: The report examines the prospects for the development of cooperation between the countries of the former Yugoslavia and what the Community and its Member States could do to foster such cooperation as part of the assistance it provides to the region. SUBSTANCE: In order to implement cooperation among the countries of the former Yugoslavia, which is the key to the long-term consolidation of the political situation in the region, the Commission has two main types of instrument available: . contractual relations between the Union and the countries concerned: conclusion of a first generation of agreements meeting the following four criteria: - fostering of regional cooperation, - improvement and enhancement of relations with the Union, - the Union's contribution to peace and stability in the region, - the Community contribution to reconstruction of the former Yugoslavia. They will also include: - a political dialogue based on the stability pact model, - a conditional clause (concerning in particular respect for commitments given under the peace agreements and economic reforms), - provisions on free movement subject to a commitment to freedom of movement with the country's neigbours, - trade cooperation with preferential access to EU markets for industrial products from these countries, - regional accumulation of origin and creation of a regional free trade area (to be negotiated within the WTO) and concessions on agriculture, - a flexible most favoured nation clause enabling these countries to grant each other reciprocal preferences, - economic cooperation based essentially on regional cooperation. . application of the Union's financial instruments: - PHARE (ECU 62.5 m to date) and humanitarian aid (a precise definition of needs will be required, together with close coordination of aid between the Commission and the Member States). - use of instruments as incentives for cooperation: regional cooperation should be encouraged through the PHARE multi-country programme (PHARE funds for cross-border measures for regional networks, training, environment, anti-drug measures, etc.), improved liaison for regional networks and regional cooperation schemes focusing on industrial cooperation, education and research. In conclusion, the Commission calls for regional cooperation to be fully taken into account in the application of the EU's financial instruments and for it to be a central component of the agreements to be negotiated. �