Brussels, 11 May 1999

Kosovo: action by the European Commission

The European Commission has reviewed the action taken and to be taken to cope with events in Kosovo. The primary objective is to restore peace and meet the refugees' immediate humanitarian needs. In the longer term the Union will need to organise and finance the return of refugees, the rebuilding of Kosovo, solidarity with neighbouring regions and stability in south-eastern Europe.

The main points of the memo presented to the Commission are set out below.

Faced by an unusually grave crisis in Europe, the Commission has in recent weeks embarked on a series of measures and preparatory discussions aimed at :

•meeting pressing humanitarian needs;

•providing assistance to neighbouring regions and countries sheltering large numbers of displaced persons and refugees;

•setting up an effective structure to handle the subsequent reconstruction and establishing the requisite coordination machinery with the international financial institutions, and in particular the World Bank;

•helping shape a European strategy for stability in south-eastern Europe.

The refugee crisis

•Refugees in regions bordering on Kosovo

Europe is facing a dramatic humanitarian crisis. Though the neighbouring regions of Montenegro, the Former Yugoslav Republic of Macedonia and Albania have been affected most, account must also be taken of displaced persons inside Kosovo.

The Commission's immediate aim has been to employ the Community's resources to address the most pressing needs. It is doing so in close cooperation with the United Nations High Commissioner for Refugees.

With over 700 000 refugees and displaced persons in the region and some 660 000 displaced persons inside Kosovo, the humanitarian situation is becoming increasingly alarming.

The Humanitarian Office (ECHO) has already committed EUR 32 million from its 1999 budget. Now that the budgetary authority has approved a request to transfer funds from the Community's emergency aid reserve to the humanitarian aid chapter, the Commission will shortly be presented with a commitment decision for EUR 150 million, bringing total aid to EUR 182 million. A global plan drawn up for the purpose was unanimously approved by the Humanitarian Aid Committee on 7 May.

This plan covers humanitarian needs arising from the Kosovo crisis until September. The sum of EUR 100 million has been earmarked for financing emergency humanitarian action in the region, in particular by the Red Cross, the UN High Commissioner for Refugees, UNICEF and non-governmental organisations. Events permitting, the remaining EUR 50 million is intended to help refugees and displaced persons return to their places of origin in Kosovo.

Should the crisis continue, even in the event of a negotiated settlement, the funds allocated to date will not be enough to meet humanitarian needs beyond September. The Commission will therefore have to consider whether to seek the mobilisation of the remaining EUR 196 million in the Community budget's emergency aid reserve once the EUR 150 million recently mobilised has been used up.

ECHO has stepped up its presence in the field. Fifteen officials and specialists are currently in Albania, the Former Yugoslav Republic of Macedonia and Montenegro. Ms Bonino visited the region from 6 to 9 May.

•Coordination between Member States

To permit the Community budget to help Member States providing temporary shelter for refugees in response to the UNHCR's evacuation pleas, the Council, on 26 April, approved the Commission's proposal for a joint action permitting the use of the EUR 15 million in the European Fund for Refugees. Under the Odysseus programme for cooperation on asylum, immigration and controls at external borders, the Commission will see that the most vulnerable groups, and in particular women who have suffered sexual abuse, receive particular care.

•Solidarity with regions bordering on Kosovo

The decision to give priority to sheltering refugees temporarily inside the region requires the Union and its partners to provide special assistance to help neighbouring regions and countries cope with the considerable demands on their budgets.

On 7 April the Council approved the Commission's proposals in this matter. Albania, the Former Yugoslav Republic of Macedonia and Montenegro are likely to be the main beneficiaries of such assistance, but other regions taking in large numbers of refugees could benefit.

The Commission is planning to provide up to EUR 100 million to cover direct costs related to taking in refugees: the cost of ensuring their safety, administrative costs, additional transport, electricity and water-supply costs, etc. A Commission team visited the region from 12 to 17 April to assess needs. On the basis of meetings on the spot and information provided by the countries concerned and the IMF, the Commission proposed that Albania be granted budget aid of EUR 62 million, the Former Yugoslav Republic of Macedonia EUR 25 million and Montenegro EUR 13 million. On 21 April the Commission authorised Mr Van den Broek to decide on financing proposals for these countries.

This aid will only be granted if the countries receiving it fulfil their international obligations, particularly under the Geneva Convention.

To finance this operation, EUR 100 million has been drawn from the following budget headings: EUR 54 million from the Phare reserve, EUR 30 million from the Obnova reserve and EUR 16 million from the TACIS and MEDA headings. The Commission will propose that the appropriations drawn from these budget headings be restored by a supplementary and amending budget: it would not be politically acceptable for needs arising from the Kosovo crisis to be covered by raiding assistance to other countries in the region, and in particular applicant countries, some of which, such as Romania and Bulgaria, are directly affected by the current crisis, or the former Soviet republics and Mediterranean countries.

•Coping with the economic consequences of the crisis and preparing for reconstruction

Though the economic impact of the Kosovo crisis will vary from one country to another, certain questions of regional interest will require a coherent approach, among them trade and infrastructure. Given the complexity of the situation and the need to mobilise all available economic and financial instruments in an effective and complementary manner, close coordination between the main donors is vital. A meeting co-chaired by the IMF and the World Bank in Washington on 27 April called on the World Bank and the Commission to set up the requisite coordination apparatus.

Without creating new structures, the aim is to coordinate existing international initiatives with a minimum of red tape.

On 12 May Mr de Silguy will be meeting the President of the World Bank, Mr James Wolfensohn, in London with a view to finalising and approving this apparatus.

The European Union will play a major role in rebuilding Kosovo and the whole of the Federal Republic of Yugoslavia. As soon as security conditions permit, a large-scale reconstruction programme will be needed to enable refugees and displaced persons gradually to return to the safe areas.

•Contributing to stability in south-eastern Europe

The proposal for a stability pact for south-eastern Europe was tabled by the Presidency at the Council meeting of 8 April and confirmed by the European Council on 14 April. Work on this proposal is proceeding in the Council working parties, which expect a substantial contribution from the Commission.

The stability pact is to be established in June at a ministerial conference to be preceded by a high-level meeting in Bonn on 27 May. As matters stand, the meeting will be attended by :

•the Member States and the Commission for the EU;

•the countries of the region: Albania, the Former Yugoslav Republic of Macedonia, Bosnia-Herzegovina, Bulgaria, Croatia, Federal Republic of Yugoslavia (if it fulfils the conditions for its attendance), Hungary, Romania, Slovenia and Turkey;

•the United States, Russia, Canada and Japan;

•representatives of the United Nations, the UN High Commissioner for Refugees, the Council of Europe, NATO and the international financial institutions (IMF, World Bank, EIB and EBRD);

•representatives of various regional initiatives (SECI, BSEC, SEECP, CIS).

The purpose of the pact will be to set up machinery actively contributing to the democratic and economic stabilisation of the region by means of "round tables" on democracy and human rights, reconstruction, economic reform and security. A donor conference for south-eastern Europe is also planned, though a date and arrangements remain to be fixed.

Pending the stability pact, the Commission will have to review the working of contractual relations with some countries of the region against the background of the regional approach developed by the Union since 1996. The Commission intends to spark discussions among the countries concerned in preparation for the drafting by the Community of a common strategy for the Balkans, in accordance with the new provisions inserted in the Treaty at Amsterdam.