Recommendations for the improvement of the business climate and attraction of foreign-direct investments in the Mediterranean region, as well as ways to develop further Mediterranean energy markets were brought forward at the Facility for Euro-Mediterranean Investment and Partnership's (FEMIP) Experts' Committee Meeting, which closed today in Vienna. The Experts placed a special emphasis on encouraging renewable energy and energy efficiency actions.
Hosted by Mr Philippe de Fontaine Vive, Vice-President of the EIB in charge of FEMIP, the two-day 4th FEMIP Experts' Committee Meeting was held under the Austrian Presidency of the European Union.
Mr Philippe de Fontaine Vive, said: Improving the business climate in the Mediterranean region will not only give new impetus to the local private sector, particularly Small and Medium-Sized enterprises (SMEs), but it will also attract Foreign Direct Investment (FDI), necessary for economic growth and job creation. In a world, however, where energy consumption has almost doubled since 1970 and where the level of economically recoverable oil reserves is uncertain over the next 20 to 25 years, no sustainable development, no economic growth and no social stability can be envisaged without common solutions to the energy challenges. Joint efforts between European countries as well as between Europe and its partners and neighbours, to promote a better business climate and private sector development and to establish a Euro-Mediterranean Free Trade Area, will only succeed if we build a Euro-Mediterranean energy community.
The meeting was attended by some 100 senior representatives of EU and the Mediterranean Partner countries, banks, industry, business organisations, other financial institutions active in the region, academics and the European Commission.
The key note address in the first session, on improving the business climate in the Mediterranean region, was by Mag. Dr. Winfried BRAUMANN, Chairman of the Executive Board of Frauenthal Holding AG (Austria). The topic concerning administrative burden reduction was extensively developed by Mr. Rits de BOER, head of EU section, Ministry of Finance, the Netherlands.
In the second session, devoted to the development of the Mediterranean energy markets, with particular focus on renewable energy, key note adddresses were by Dr. Hans HAIDER, Chairman of the Managing Board, Verbund (Austria), and Mr. Dominique RISTORI, Director, General Affairs and Resources, Directorate-General for Energy and Transport, European Commission.
In his closing remarks, Mr Philippe de Fontaine Vive noted that: Funds are ready to flow into viable private sector projects, as well as the energy sector. Energy issues are of a geo-political and socio-economic nature: sources are unequally distributed between countries, yet demand for energy is increasing rapidly everywhere. This situation represents an opportunity for cooperation between countries and market operators, but if mal-managed it also represents a major threat to stability and peace. Energy production and private sector development require large investments and have a major impact on growth, social welfare, environment and human health.
FEMIP is already a key player in these fields and brings a significant amount of experience and expertise to the table, in line with the conclusions of the Johannesburg Summit on sustainable development held in 2002 and the European Commission's green paper on Energy Strategy for Europe. Further to its lending for energy projects of some EUR 3.5 billion over the last ten years, the FEMIP Trust Fund is financing two key energy studies: on the development of renewable energy and energy efficiency projects in developing countries, and on carbon finance and crediting activities in the Mediterranean region. These will facilitate the identification of priority sectors and the set-up of a pipeline of concrete projects, which FEMIP could help develop and finance. FEMIP is examining the principal infrastructure necessary to establish a large Euro-Mediterranean area as called for by the Barcelona Process, he said.
Set up as a think-tank, the Experts come forward with practical and operational recommendations to FEMIP's Ministerial Committee of the Economics and Finance Ministers of the EU and the Mediterranean Partner Countries. 2006 will be a crucial year for the future of the Euro-Mediterranean Partnership as the the European Council is, to decide on the budgetary resources for the region for 2007-2013 and, to re-examine FEMIP's future. The EU and partner countries' Finance Ministers will have a first exchange of view on this and will consider the Experts recommendations at the FEMIP Ministerial Committee meeting in Tunis on 25 and 26 June.
Since it was set up in October 2002, FEMIP has established itself as the Euro-Mediterranean development bank, striving to foster economic and social modernisation and enhanced regional integration in the partner countries.
Total FEMIP lending in the Mediterranean Partner Countries in 2005 was EUR 2.2 billion, for 23 new operations in Mediterranean Partner Countries, slightly over the already significant figure realised in 2004. Of this, 51% was devoted to FEMIP's top priority private sector support. For the most part (35%), these operations are conducted with the local banking sector, in order to enhance its ability to finance productive investment by SMEs. At the same time, FEMIP is supporting investment in basic infrastructure in the energy (Egypt, Gaza-West Bank, Syria), environmental (Turkey, Lebanon, Morocco) and transport and communications sectors (Syria, Lebanon, Morocco, Turkey). 2005 also saw the resumption of financing operations in Gaza and the West Bank, with two loans improving the living conditions of the Palestinians in practical terms via the supply of electricity and the establishment of a guarantee fund in support of SMEs.
FEMIP has also increased its technical assistance activity: in 2005, 33 operations totalling almost EUR 25 million facilitated the implementation of capital projects or supported the carrying out of studies, helping to support institutional reforms and the definition of sectoral development strategies in the southern and eastern Mediterranean.
In order to identify new ways to develop financial cooperation on the basis of comparative advantages and widen its framework of operation, FEMIP strengthened its cooperation with other donors in the region, by signing agreements with the EDFI members. This will strengthen the EU's support for economic development in the partner countries in the Mediterranean avoid duplication of resources and maximise the impact of EU Member States activities in the region.
In addition to its financing operations, FEMIP has undertaken a survey of the sovereign debt markets in the Mediterranean countries (published in December 2005 ) and defined an ambitious programme of work on access to credit for businesses. On 13 March 2006, it signed a partnership agreement with the Euro-Mediterranean network of economic institutes (FEMISE), and made public the first detailed analysis of financial flows from Mediterranean migrants in Europe.