As recognised by the Ministerial Meeting of the Peace Implementation Council (PIC) in Madrid on 15-16 December 1998, substantial efforts are still required from the international community to consolidate the implementation of the General Framework Agreement for Peace in Bosnia and Herzegovina and to make the peace process self-sustainable. The PIC conclusions stressed in particular that the next two years would be vital in strengthening the peace process and building democratic and market-oriented institutions¹. It is indeed acknowledged that the efforts of the international community can not alone solve the difficult issue of the return of refugees and displaced persons as well as the transition to a sustainable economical and political environment. This can only be achieved with the full commitment of the local authorities as well as the good will of the inhabitants of Bosnia and Herzegovina.

In spite of important assistance programmes, including that of the European Union which since the signing of the Dayton/Paris Peace Agreements has earmarked EURO 1 billion for reconstruction and reform purposes (in addition to the humanitarian aid granted since 1992), the slow return of refugees and displaced persons continues to hamper the realisation of sustainable peace.

For 1999, the European Commission is therefore proposing to pursue the focus on refugee return together with activities which will foster economic development and democratic institutions (moving from "reconstruction" to a phase of "stabilisation and consolidation"). The 1999 programme should be seen in the context of a multi-year approach with the Commission, on the basis of a new Regulation currently under preparation, starting to consider with the local authorities the orientations for the period 2000-2006.

Following a review of the socio-economic and political situations, an assessment of the past EC assistance schemes, an evaluation of the implementation environment, and the definition of objectives and guidelines (including the regional approach, the conclusions reached at the December PIC meeting, the recommendations made by the Reconstruction and Return Task Force (RRTF) and the continued need to address return related issues, in close coordination with the ECHO programme), the following orientations have been retained for the Phare and Obnova 1999 programmes for which EURO 146 million are tentatively earmarked :

Phare and Obnova 1999

1. Democratisation and Institution Building EURO 17 million

2. Sustainable Economic Development EURO 37 million

3. Integrated Activities to Encourage Refugee Return EURO 69 million

4. Civil Society and Social Development EURO 15 million

5. Implementation support, Monitoring, Audits (ATA) EURO 8 million

Total: EURO 146 million

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