Opening address by Prime Minister Anton Rop at the meeting of Cefta member states

Brdo pri Kranju, 7 November 2003

Dear prime ministers, ministers, honoured guests,

It gives me great satisfaction to welcome the member states of the Central European Free Trade Agreement, with new member Croatia, on this, its 10th birthday - a birthday worthy of celebration since it marks a decade of good and fruitful cooperation between countries that share a common outlook on the future. Those gathered here today, representatives of member states, candidate countries and those countries that wish to join at the earliest opportunity, wish to live in a democratic, developed and socially successful Europe. That is our common vision. We wish to live in a Europe with such features and we are working towards that goal.

We will realise these plans and expectations within what is probably the most successful multinational form of integration in the world - the European Union. Today the European Union represents the focus of European prosperity, democratic standards, protection of human rights and the environment, economic and developmental prosperity, stability and security. The European Union drives European development and the free market economy, and with it competition, competitiveness, solidarity and respect for the highest standards. Thorough preparations have to be made in order to join it, both within the borders of one's nation state as well as at the international level, where the demands for excellence are greater still. Our economies must be made capable of conducting business in its most demanding forms and of engaging in the processes of competition that take place within the European Union. The role of Cefta has been of great importance in this regard; it shall continue to be so. Cefta has not only strengthened economic and trading links between its member states; it has also contributed to wider European integration processes. It constitutes an exceptionally useful "learning process" or a process of preparing for transition to the conditions of sharp competition that a single market entails. Cefta is a rehearsal for the complex processes of nominal and real convergence with the high standards of competition that exist in the European Union.

Cefta has discharged its tasks well in the last decade. We have established an efficient free trade zone that covers 100 million people and an area that stretches from the Adriatic to the Baltic and the Black Sea. Economic cooperation has opened the door to other areas as well. Cefta has demonstrated how important, and how successful in so many ways, regional cooperation can be, as well as the power of the "common interest".

The weakest link in this process, however, remains trade in agricultural products. Every year we find that new export subsidies have appeared; along with them come new protective measures. Short-term protection of domestic agriculture is advisable in the event of exceptional imbalances in the market; in the long term, however, these measures do not contribute to more rapid adjustment by producers to the new guidelines and competitive pressures. To keep in step with the times is therefore crucial for the survival of this sector and important for the satisfactory further development of trade in agricultural products between Cefta members themselves.

Next year will bring considerable changes to trade between Cefta members. Cooperation between those countries that will become EU members on 1 May 2004 and Cefta member states will rest on accession agreements - or rather, on stabilisation and accession agreements. These will differ somewhat from current trading arrangements. In order to preserve the basic purpose of the Cefta agreement, as well as of European Union accession agreements, i.e. the preservation and widening of trade flows between countries, Slovenia is in favour of the establishment of a trade regime between EU and Cefta member states that will at least preserve the existing arrangements. We are thus supporting the early signing of harmonisation protocols that will take into account the fact that there are new EU member states and that a certain level of liberalisation has been achieved. Our mutual cooperation enables diversification of our foreign trade and investment activities, and brings stability to our development.

In Slovenia we have, by and large, been satisfied with the development of trade with Cefta countries. Since 1996, when we became a Cefta member state, we have recorded constant growth in goods trade. The level of growth, which has varied from year to year, has been, on average, 17 per cent a year for exports and around 14 per cent for imports (Croatia excluded). The fact that this growth has generally exceeded the level of growth of Slovenia's overall exports and imports, and by over ten per cent, shows the importance of mutual trade. In the last 18 months we have noticed a reduction in the deficit that has been a traditional feature of our mutual trade; this is a positive trend, showing as it does that trade with Cefta member states is becoming more balanced.

The 10th anniversary we are celebrating today is perhaps tinged with regret since it is the last time we will meet in our present form. Next year five member states will be leaving Cefta to become full members of the European Union. I firmly believe, however, that our departure will not hasten the end of Cefta. Three of the member states will continue to work within it. And while the form of our economic cooperation will change, the goal remains a common one - to live side by side within the European Union at the earliest opportunity.

Enlargement of the European Union must not cause new divisions within Europe. Quite the opposite. Enlargement must mean and offer new challenges, new perspectives and new opportunities to those countries that are not part of this enlargement round. The European Union's "open door" policy and the process of enlargement must continue. We are pleased that Bulgaria and Romania are firmly on the path to rejoining us. We hope that Croatia will join these two countries on their journey as soon as possible.

As I have already mentioned, from next year the European Union will have new neighbours on its external borders. With these new neighbours the Union, and us with it, will develop new forms and concepts of cooperation. This provides incentives for Europe to be united. Finland, Austria and Slovenia are among the initiators of this cooperation and of incentives for extra resources and funds for cross-border cooperation between neighbours. These incentives have been put forward with the aim of achieving more rapid convergence for the new neighbours of the European Union, the promotion of regional development and the linking of regions of countries on the new external border of the Union. The goal is to reduce discrepancies within Europe and achieve more rapid integration.

Despite the temporary separation that lies ahead of us, in the future, alongside economic cooperation, we will have to undertake tasks that are of great relevance to all of us in Europe at this moment, the Cefta nations included. Of prime importance is the revival of economic development and growth for the wellbeing of the citizens of all our countries. The European Union is becoming more active in reinvigorating the economy. One of the fundamental proposals for meeting this objective is the Initiative for Growth, with its package of financial and legislative measures to encourage investment in the Trans-European Network and important research and development, innovation and science projects. Together with the national growth programmes, the Initiative for Growth should accelerate implementation of the Lisbon Strategy and encourage private investment in priority projects, which include the trans-European transport, energy and telecommunications networks. This infrastructure is vital to increasing long-term growth. In addition it will be necessary to run a macroeconomic policy aimed at creating new jobs, maintaining stable economic growth, promoting economic and social cohesion and carrying out structural reforms. Of course it will also be necessary to promote investment not only in infrastructure but also in human capital, in education and science, which are among the fundamental elements of development in any modern society. But the financial resources are limited: whether to speed up economic growth through investment in infrastructure or in human capital is at the heart of European Union debate. Is it possible to invest in both at the same time? A middle way? The dilemma needs to be resolved quickly. Raising competitiveness will be of decisive importance. With simultaneous concern for the environment and the social dimension, of course.

Why am I speaking of a common task - increasing economic growth? Because it is a key task in light of the further expansion of the European Union, for otherwise, given low growth, expansion can only increase the effect of economic stagnation, which in return would make it more difficult to successfully integrate the new members.

Alongside economic development and growth, a further fundamental task facing the European Union and the countries who will shortly join it is creating new institutional structures for the future. The Convention laid the basis for these, and they will be given their final form by the Inter-Governmental Conference. The main problems relate to the number of MEPs, the role of national parliaments, the number of commissioners and their roles, the definition of the presidency of the Council and the role of the European Union's foreign minister, the number of votes for individual countries and the model for the presidency of council formations. The balance is being weighted between the large and small countries, and between the Council and the Commission, more emphasis on the inter-governmental principle or the community principle. There is deliberation of how to preserve the identity of very small nations in a large union. And how to bring the union closer to the people. Of greatest significance is the coming European Constitution. The deadline for expansion is May 2004, although December of this year would be preferable. But of course the pressure of time must not affect the quality of the long-term solutions. The constitution will govern the future of us all.

What will happen to Cefta in the years ahead, after Bulgaria, Romania and Croatia have joined the European Union? The institution has been a positive experience for all of us. Will it live on? Can we speak of its prospective future? Are there new members in sight? In Thessaloniki the union gave the countries of the eastern Balkans clear prospects of membership. It offered them a process via Stabilisation and Association agreements, within the framework of which they should strengthen their economies, raise competitiveness and carry out structural reforms, in short, commence the process of convergence with the European Union and ensure their own stable development. As part of this they should conclude free trade agreements among themselves. Perhaps this would be suited to the Cefta framework. As we found, this framework was and is beneficial and successful for all of us. There is a chance, proved the criteria are met of course, for the other countries of the eastern Balkans to work within it to speed up their path to the European Union.

Ladies and gentlemen, may our last meeting be as successful and friendly as the others have been these last ten years in Cefta. Let the fruits of our work contribute to better international cooperation. Some of us are leaving, and some are remaining in Cefta, but all with the same goal - to live in the common European home. I wish Bulgaria every success in its presidency next year. Thank you.