Банкеръ Weekly

Briefs

STABILITY PACT TURNED OUT TO BE A TRAIN IN THE OPPOSITE DIRECTION

What will happen to the Stability Pact for South Eastern Europe after the mandate of its Special Coordinator Bodo Hombach elapses in end-2001? This is the question asked by everybody following the processes in the Stability Pact since its establishment in June 1999 in Koln till the present day. The Regional Conference held in Bucharest on October 25-26 had to become a water shed for its future. But it can mark instead the end of illusions which South Easter Europe cherished about the Pact. According to diplomatice sources, the Stability Pact's head office in Brussels hinted to the national coordinators that they should not declare in front of thier fellow-countrymen great expectations from the forum in order to avoid bitter disappointment if their promises do not come true. The BANKER weekly learned that the agenda of the Regional Conference was being modified till the last moment, which contradicts the diplomatic protocol.It became known that the forum, organized jointly by the Romanian Government, the World Bank, the European Commission, and the Stability Pact, which was noisily advertised as a donors' summit, would not be extending finances to support new economic projects. Hopes that the forum in Bucharest could give a green light for implementation of new infrastructural projects (in addition to those, whose financing was negotiated at the conference held in Brussels in March 2000) remained vain. EUR2.4BN was raised then for the beginning of 244 projects, included in the so-called quick-start package. According to the Special Coordinator of the Stability Pact, construction of 82% of these facilities has laready begun. The decision made in Bucharest for considering projects from the first donors' conference only, for which financing has already been ensured, has been commented as an acknowledgement of the failure to find more finances. Moreover, the division of projects into short-term, medium-term, and long-term, was approved. The lack of flexibility in discussing the problems within the framework of the three working tables of the Stability Pact, and most of all in the infrastructural one, provoked the indignation of the participant-countries. In that respect, Bulgaria's proposal presented by Foreign Minister Solomon Passi for setting up a permanent mechanism to periodically consider the financing of projects and their priority importance to the region, without having to wait for the summits, seems completely reasonable.

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