The EU's assistance to Bosnia and Herzegovina is designed for the long term. The aid is not intended solely to restore conditions to what they were before the war. Most of the projects are long term investments with the aim of providing this new state with solid democratic foundations and a viable market economy, and to develop Bosnia and Herzegovina's administrative and legislative institutions in order to bring them closer to European standards, so that the country can take its place in the construction of the future Europe. The launch of the Stabilisation and Association process represents a major step in this direction.

Key steps in the relations between the EU and BiH

1997: Regional Approach

In April 1997, the EU Council of Ministers -- in the framework of the EU's Regional Approach-- established political and economic conditionality for the development of bilateral relations with Bosnia and Herzegovina in particular in the fields of trade, financial assistance and economic cooperation. Progressive implementation of these conditions based on the regional approach will lead to improvement of relations.

At present Bosnia and Herzegovina benefits from autonomous trade preferences by the European Community.

1998: EU Declaration

The EU Declaration on Bosnia and Herzegovina of June 1998 represents an important step in the bilateral relations. It emphasises that the future of Bosnia and Herzegovina is in Europe and provides the framework for closer co-operation. The Council had at that occasion established an "EU/BiH Consultative Task Force" (C.T.F.). The C.T.F. provides a joint European ­ Bosnian vehicle for technical and expert advice in the fields of administration, regulatory framework and policies (see p.13).

1999: Stabilisation and Association process

In the context of the stabilisation of the countries of South-Eastern Europe, the European Commission proposed, on May 26, 1999, the creation of a Stabilisation and Association process for Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia (FRY), the Former Yugoslav Republic of Macedonia (FYROM) and Albania.

By proposing a new Stabilisation and Association Process (SAP) for these five countries, the EU reaffirms its resolve to take up the challenge and responsibility to contribute to the stability of the region, this time by offering a perspective of integration, based on a progressive approach adapted to the situation of the specific countries.

The SAP offers stronger incentives to these five countries, but also places more demanding political and economic conditions on them. The need for regional co-operation is stressed particularly strongly. In return for compliance with the relevant conditions, the EU will offer a new kind of contractual relationship to the five countries, namely Stabilisation and Association Agreements (SAAs).

These SAAs will draw the region closer to the perspective of full integration into EU structures. They would be tailor-made, i.e. taking into account the individual situation of each country, while the timing for the start of negotiation for such agreements will be differentiated according to the countries' compliance with the relevant conditions (established by the EU under the Regional Approach which remains valid).

The Stabilisation and Association process at a glance

What is it?

• The European Union's (EU's) main contribution to the Stability Pact for South-Eastern Europe.
• Enhancement of the Regional Approach, which has until now provided the framework for the development of relations between the EU and Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia, the former Yugoslav Republic of Macedonia and Albania.
• Stronger incentives for the region, but also more demanding conditions regarding political and economic development and regional co-operation.
• A tailor-made, progressive approach that takes into account the individual situation of each country. Some countries can progress faster than others.

• The Stabilisation and Association process will include, as appropriate:
• Stabilisation and Association Agreements: a new kind of contractual relationship offered by the EU -- in return for compliance with the relevant conditions -- to Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia, the former Yugoslav Republic of Macedonia and Albania. This represents a new dimension in the relations with these five countries, offering for the first time a clear prospect of integration into the EU's structures;
• Autonomous Trade Measures and other economic and trade relations;
• economic and financial assistance, inter alia PHARE assistance, OBNOVA assistance, budgetary assistance and balance of payment support;
• assistance for democratisation and civil society;
• humanitarian aid for refugees, returnees and other persons of concern;
• co-operation in justice and home affairs; development of a political dialogue.

• Bring peace, stability and economic development to the region and establish a close, long-term relationship with the EU.

The Stability Pact for South-Eastern Europe, adopted on 10 June 1999 in Cologne, is a European Union initiative. Its aim is to bring peace, stability and economic development to the region. Sarajevo successfully hosted the Stability Pact Summit on 29 and 30 July 1999. The EU's main contribution to the Stability Pact is the new Stabilisation and Association Process.

Hardly a week after the signature of the peace accords on December 21st and 22nd 1995, The European Commission, together with the World Bank, organised the first donors conference. Under the Chairmanship of the World Bank and the European Commission, regular donors conferences have been organised since then, and a joint World Bank / European Commission Office for South-East Europe has been set up in Brussels.

Effective co-ordination is best organised at local level in BiH through the Economic Task Force, the Return and Reconstruction Task Force (RRTF) and other more sector specific Task Forces run by the Office of the High Representative. More than half of the OHR's running costs are funded by the European Commission.

A Future with Europe - Table of Contents