The Commission welcomes the PRIP and appreciates the complexity and size of such a task. It is clearly the beginning of a strategic framework on which to identify further necessary investments in Kosovo. We recognise the effort that has been made by UNMIK and the Joint Interim Administration departments, as well as local municipalities to identify their respective needs and present them in this manner.

The approach to phasing out the level of donors’ direct involvement in the investment sought over the years demonstrates that the interim authority is committed that Kosovo should stand on its own feet as soon as is realistically possible. Moreover, it is a major step forward that this document is taking into account the recurrent costs which lie behind the investments.

We believe that it will become increasingly important for UNMIK to be able to prioritise investment needs, concentrating resources and efforts which directly contribute to the future long term economic development of Kosovo and the overall welfare of its people.

Strong attention must be paid in policy and in practice to development of local capacity and institutional strengthening. We welcome the fact that UNMIK is making the transfer of authority and responsibilities to local people a top priority.

However, the Commission would like to bring attention to some matters which will clearly condition the effectiveness of donors’ assistance:

• The Commission can only stress the importance of going further in establishing and enforcing policy and legislative frameworks inside each of the sectors put forward for investment.

• Policy framework in Kosovo must be coherent with the EU's Stabilisation and Association process for the Western Balkan region. It is therefore vital that a EU-compatible policy and legal framework are put in place from the outset in all sectors.

• In the public sector, it is becoming really very urgent that a proper billing and paying system is put in place and enforced. Clearly, the vast investments made here will not be sustainable if there is no cost recovery mechanism and we must see a sharp improvement in this in the very near future.

• In terms of enterprise and rural development, the Commission welcomes the recent regulations on business organisations, contracts, pledges and foreign investment. However a rapid development of a complete administrative and regulatory business environment and a strict enforcement of all regulations will be necessary. Development of the Commercial Court system and training of the relevant judiciary must be also borne in mind. In the agriculture sector, it will be necessary to accompany this regulatory framework with the swift adoption of food standards and quality control, phyto-sanitary and veterinary legislation.

• On transport infrastructure, the significant investments only make sense if there are accompanying institutional reforms which will enable maintenance costs to be covered and ensure appropriate safety levels. Special attention has to be provided to the development of a comprehensive approach to solve the legal and administrative problems which are hindering the rehabilitation of the "Hanni I Elezit- Gjeneral Jankovic" (Blace) border post with FYROM and obstructing the circulation of goods and people.

• For housing, let us not lose sight of the main objective which is to normalise the housing situation in Kosovo so that the most vulnerable people among all ethnic groups are adequately housed. This will require the continuation of donors’ involvement. A needs assessment which determines the remaining housing requirements of families affected by the war and subsequent conflict in Kosovo is required to make sure that the needs of the most vulnerable are met. Furthermore, a standby plan needs to be presented on the additional funding that must be mobilised in the event of significant numbers of Kosovo Serbs, Roma and other ethnic groups returning home during the lifetime of the PRIP.

• On law and justice, we are concerned by the ongoing violence directed towards ethnic minorities and the generally high levels of crime. Furthermore, intimidation against public officials, in particular customs officers and tax administrators, in the exercise of their essential duties for the sustainability of the Kosovo budget is unacceptable. Fighting against criminality should be a top priority this year as security is a basic condition for maintaining stability and for attracting foreign investment.

It will also become increasingly important to begin to reflect the developments in the wider regional context. Clearly, Kosovo's economic future requires establishing links with neighbouring regions. The donors cannot be expected to finance costly Kosovo only based investments if more viable alternatives exist in a regional framework.

• The EC has provided a huge opportunity to the region, including Kosovo, by unilaterally opening our market. Full advantage should be taken of these autonomous trade measures.

• As far as the assistance is concerned, the EC’s financing has been rapidly implemented in 2000 thanks to the efficiency of the European Agency for Reconstruction. EC interventions mostly went into securing the functioning of basic public utilities and meeting crucial needs, with an emphasis on moving out from the emergency phase to undertake long-term reconstruction of public utilities, infrastructure and the economic sector.

• In 2001, the EC will continue the momentum with a more developmental approach in the main sectors. Among other objectives, the European Agency for Reconstruction is undertaking the complete overhaul of Kosovo B power station, continuing the repairs to the water systems, providing further grants for housing reconstruction, upgrading more of the main transport axes and bridges, providing more support for enterprise growth and for agricultural development, and continuing to bring essential assistance to primary health care. Other activities will focus on waste management, municipal level support, legal aid for civil cases, rehabilitation of judicial premises, support to public media and to civil society. In addition, support to the modernisation of the UNMIK customs service will continue. Within all these sectors, the EC assistance will also tackle both capacity enhancement for local management and staff and institutional building.

Finally, some numbers about our financial commitments in Kosovo: