CENTRAL EUROPEAN INITIATIVE

The idea of the Central European regional cooperation developed at the end of 1980s in reaction to the historical changes in Central and East Europe. The objective was to revive co-operation between he countries within the same geographical, cultural and historical context of Central Europe. First came the "4" initiative that evolved into the Pentagonal, then Hexagonal and eventually the Central European Initiative (CEI). It includes 16 countries: Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Czech republic, Croatia, Macedonia, Hungary, Moldova, Poland, Slovakia, Slovenia, Austria, Romania, Italy, and Ukraine.

The major CEI objective is to deepen and expand economic cooperation within the Central Europe. CEI activities are currently based upon the 16 permanent working groups -

There are also ad hoc working groups for youth exchange (co-ordinated by Macedonia), human dimension (Austria) and fight against organised crime (Italy and SR).

Currently the top priority is to assist member states that wish to join the EU in progress of their economic transition and elimination of barriers to their economic integration in the EU. That should facilitate the achievement of the Copenhagen criteria of 1993.

CEI is not an international organisation. It is merely a form of regional co-operation. As such it has no structure or managing bodies, nor any other attributes of an international organisation. It is seen by its members as an adequate platform for mutual exchange of information on current issues concerning the region. The CEI supreme level is the heads-of-states summit attended also by the foreign secretaries. The summits are held annually in Spring. The executive is represented by the Committee of National Co-ordinators. The CEI Sarajevo summit (1997) formed Executive Secretariat with permanent headquarters in Trieste. It is an administrative support to the Presiding country. After an agreement a new cycle of rotation started according to the English alphabet. Croatia held the Presidency in 1998. Starting 1.1.1999 the position will be held by the Czechs.

    CEI HISTORY OUTLINE

The "4" initiative emerged in Budapest in November 1989 (Austria, Italy, Former Yugoslavia, Hungary).

Czechoslovakia joined in Vienna in May 1990 to change the initiative into the PENTAGONAL.

HEXAGONAL emerged after Poland joined in July 1991.

In July 1992 Slovenia, Croatia and Bosnia and Herzegovina joined in Vienna. The group changed into the CENTRAL EUROPEAN INITIATIVE.

In March 1993 in Budapest, the successive states of Czechoslovakia, Czech Republic and Slovakia, were admitted without breaking the continuity, i.e. as of 1. 1. 1993.

In July 1993 in Budapest FYROM was admitted - the former republic of Yugoslavia, Macedonia, bringing the membership to 10.

The group expanded by 5 more members at the CEI ministerial summit in May 1996 in Vienna based on a decision at the heads of governments summitin Warsaw in October 1995. The new members were Albania,Belarus, Bulgaria, Romania, and Ukraine.

In November 1996 at the Graz summit, CEI admitted Moldovaas the 16th and so far the last CEI member.

As a matter of priority, Slovakia supports regional co-operation in project development in transport, small and medium size enterprises, telecommunications, energy, and environment. There is a need to revitalise the CEI operations and return to its original objectives. The CEI output and the original aims as represented by the working groups, are at the end very limited even in the areas of cooperation that used to be most preferred: energy, telecommunications, transport, and environment. The expectations aimed at development of economic cooperation through joint projects have not yet materialised even according tot he assessment by the member states. That is because of lack of funds for even the smallest projects. The list of activities shows, however, that the CEI activity reflects parallel activities of other bodies with Europe-wide impact (e.g. OSCE, CoE) in the fields such as human and national minority rights.

Slovakia regularly participates in all supreme CEI summits and those of foreign secretaries. Its representatives have continuously pointed out the above concerns and called for return to the original CEI aims. Slovakia particularly emphasised support to the economic dimension of the CEI cooperation.

The CEI summit in Warsaw in October 1995 failed to agree on construction of a permanent CEI secretariat proposed by Italy and partly by Austria. The compromise eventually produced CEI Centre for Information and Documentation in Trieste.

In October 1997 on the occasion of ratification of the Agreement between the Austrian Presidency in 1996 and Italy as the host of the CEI Centre, Italy presented a request to change the title of the Centre to the CEI Secretariat. It argued with a more trustworthy or credible position of the CEI Centre in the public view in Italy in connection with its co-funding (the state together with the province Friuli Venezia Giulia).

The heads-of-governments summit in Sarajevo in 1997 changed the title of the Centre to the CEI Executive Secretariat.

The body has a Director General of the Secretariat, Mr Hartig (Austria) and his two deputies from Italy and Slovenia, as well as the Italian administrators. Italy covers the cost of the Secretariat and the salaries of the Italian staff. Austria and Slovenia meet the cost of their representatives.

There are sometimes attempts, particularly by the Director General, to make the other member states contribute to the operation of the Secretariat. Slovakia isn't particularly interested in the operation of the Secretariat in Trieste and thus in its funding.

In 1998 a number of key CEI events were held. They include the summit of foreign secretaries (Brioni, 5-6 June), summit of home secretaries (Graz, 23-25 October), summit of presidents of chambers of commerce (Zagreb, 18 November), round table on direct foreign investment in the CEI countries (Zagreb, 18-19 November), Economic Forum (Zagreb, 20 November), summit of ministers of economy (Zagreb, 20 November). heads-of-governments summit attended also by the foreign secretaries (Zagreb, 20-21 November).

The Slovak delegation to the latter was lead by Prime Minister Mikulas Dzurinda, the one to the Economic Forum included Minster of Economy Ludovit Cernak, his Deputy Minister P. Brno, Head of European Integration and Multilateral Trade Cooperation Section at the Ministry of Economy Anna Jostiakova, and Head of Trade and Economy Department at our Embassy in Zagreb, R. Krb.

The common feature of the CEI countries is insufficient completion of economic and political criteria is the search for partners for privatisation of large enterprises and key sectors of economy. Within the legislation, the countries concentrate, with the assistance of foreign experts, on drafting legislation to facilitate foreign capital input. hey accelerate the legislative process in liberalisation of trade at bilateral level. Agricultural products are sensitive items to a number of countries. The economic forum frequently debated the issue of development of regional cooperation and orientation of foreign trade towards the EU. It emphasised the need to eliminate administrative barriers in certification of goods and facilitation of the system of payments. It is important to deal with legislation of formation of SMEs.

    Communiqué from the ministerial summit

On the conclusion of the summit of Ministers of Economy within the Economic Forum held during the Heads-of-Governments Summit in Zagreb on 20-21 November 1998, a communiqué was adopted. Following are its key points:

  • The ministers of economy and foreign trade of the CEI member states, their representatives from Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Macedonia, Hungary, Moldova, Poland, Austria, Romania, Slovakia, Slovenia, Italy and Ukraine met in Zagreb on 20 November. The summit was presided by Nenad Porges, Minister of Economy of Croatia that holds the CEI Presidency in 1998.
  • The representatives of the UK, EU, EBRD, the World Bank, OSCE, and the Initiative for the South East European Cooperation attended as guests.
  • Representatives of the CEI Secretariat also attended.
  • The ministers exchanged positions on the opportunities and perspective of further trade liberalisation between the CEI member states within the context of European integration.
  • The ministers expressed support to trade liberalisation as an important moment to achieve long term growth and sustainable development in the context of globalisation. Here they emphasised the need to continue in trade policy aimed at elimination of the major trade barriers between the participating states. Its implementation has to reflect multilateral principles and practice of the WTO and the interests of respective countries.
  • In the conclusion the ministers expressed an opinion that regional and multilateral liberalisation are intertwined.
  • Confirming that the strategic objective of enhancement of coexistence in Europe remains the CEI priority, the ministers have emphasised that the development of economic cooperation and trade liberalisation are of utmost importance for the countries in transition.
  • The ministers find it of utmost importance to further develop co-operation between the CEI and the EU. Based on that they called upon the EU to retain closer relations with the CEI member states in mutual implementation of the existing and adoption of new accords. Recognising that the CEI member states have different level of relations with the EU, they expressed hope that further EU enlargement would contribute to the development of trade between the European countries.
  • Reminding that the transition countries face multiple and similar problems connected with privatisation, structural and macroeconomic reforms, the ministers requested multilateral economic organisations, particularly the WTO and the UN developmental organisations, to provide adequate assistance and attention to their particular needs.
  • The ministers emphasised again the importance of the WTO membership and expressed hope that non-members will soon be admitted to the WTO.
  • The ministers expressed concern about the spread of the global financial crisis with extensive impact, not only on the financial sector. Taking in consideration the impact of the crisis, the ministers called for co-operation in formation of strategies to resolve the crisis.
  • Bearing in mind that direct foreign investment (DFI) is the basis for implementation of market economy reforms, the ministers support equal approach in adoption of new decisions on trade, investment and financial flows. In connection with the countries for transition economies, they should make further steps to attract DFI through a transparent legal system and stable macroeconomic and political environment.
  • The ministers positively viewed the first summit of the CEI Economic Forum as an outstanding opportunity of exchange of information and experience between the public and the private sectors on economic, legal and trade issues. They are instrumental of economic development within the region and support to trade and economic relations, as well as financial flows within the region.
  • The ministers emphasised the importance of infrastructure in the context of economic cooperation and, particularly, the role of European corridors.
  • The ministers expressed gratitude to the Croatian government for excellent organisation of the ministerial summit.

The CEI members take a significant part in Slovak foreign trade. In 1997 their share in our foreign trade was 48.6% with active balance of trade at Sk 20 812m. In 1997 trade turnover with the CEI members reached Sk 311 344.50m.

In spite of overall passive trade balance, Slovakia enjoys continuous active trade balance at Sk 10-30md. The improvement of trade balance has been experienced with Belarus, Bulgaria, Poland, Austria, and Romania. The opposite trend occurred with the Czech Republic, Hungary, Italy, and Ukraine.

Low foreign trade turnover is caused by declining share of Slovak trade with the CEI on total foreign trade of SR. The export decline went from 59.7% in 1994 to 56.1% in 1997 with import reduced from 47% in 1994 to 42.1% in 1997. That has been principally caused by the declining trade with the Czech Republic. Trade with Austria has been most promising with the export increasing (from 5.25% in 1994 to 7.15% in 1997) and import decline (from 5.77% in 1994 to 4.86% in 1997).

Slovakia's trade with the CEI member states is quite differentiated. The share of none countries on total trade of Slovakia is less than 1%. Their accumulated export ranges between 2.5-3.5% and import 1-1.5% of total foreign trade of Slovakia. The markets are relatively new and keep on developing. They are very attractive to us because of the size of their territory and population.

In 1997 the Czech Republic was our major trading partner also within the CEI (in 1998 it ranked second after Germany). Its share of Slovakia's trade turnover was 24.7% and 50.7% within the CEI. Last year the turnover reached Sk 158,117.6m. Since 1993 the trade volume between CR and SR increased by 12%. The trade with CR is exercised within the customs union. Its opening (the agreement signed on 29.10.1992) is an important tool for development of economic relations between CR and SR, particularly in trade.

Austria is the second major partner of Slovakia in light of trade turnover. That reached Sk 37,908.1m in 1997 which is 5.9% of total Slovak turnover and 12.2% within the CEI. The growth is dynamic. Since 1993 trade turnover increased by almost 85%. Our trade with Austria in 1997 reached third place in trade balance at Sk 4,383.8m. Trade between the two countries until 1993 was guided by the Association Agreement between SR and EFTA. Through Austria's EU membership the trade has been guided by the Association Agreement between SR and the EU. Austria is an important partner to Slovakia in investment capital as well. Austrian foreign capital in the amount of Sk 8.8md ranks Austria second after Germany. The major companies include Bank Austria, Henkel-Palma, Wienerberger - Slovenske tehelne, Ludova Banka, Kablo Bratislava, Creditanstalt, Tatra banka, etc..

Italy is the third major partner of Slovakia. trade in 1997 reached Sk 35,924.1m with passive balance at Sk 2,555.7m. That was the highest among the CEI. Trade turnover with Italy increased since 1993 by 344% in the value of USD 25,480.7m. It is the major increase of trade turnover within the CEI. The major Italian investment in Slovakia includes white household electronics manufacturer Tatramat-Whirlpool Poprad and Sloveca Bratislava, wholesale with chemical intermediate products.

Among the CEFTA countries, Slovakia's second major and traditional partner after CR is Poland. Trade increased since 1993 by 298% which is Sk 25,892m with the highest active balance at Sk 6,666.6m.

Our fifth major trade partner within the CEI is Hungary. Trade in 1997 reached Sk 21,436.7 with active balance at Sk 6,274m. In five years the trade turnover grew by some 210% with further growth potential.

There are further major trade partners within the CEI - Ukraine, Slovenia, Croatia, and Romania. 1997 trade turnover over Sk 1,000m was also experienced with Belarus and Bulgaria. Trade with Bosnia and Herzegovina, Macedonia and Moldova was slower. Our lowest trade turnover in 1997 within the CEI was with Albania.

Slovak Trade FORUM