Europe becomes more closely integrated – intensified Norwegian efforts 1This Plan of Action is a follow-up to Report No. 12 to the Storting, Norway and Europe at the Dawn of a New Century, which provides a detailed picture of developments in Europe, including EU enlargement.

Just over 10 years after the fall of the Berlin Wall the post-war vision of a united, peaceful and cooperating Europe is in the process of being realized. Today the countries of Europe are being woven together in an increasingly close and more comprehensive cooperation across former dividing lines, a cooperation that encompasses security, economic affairs, welfare and equitable distribution.

If we are to achieve long-term stability and economic development in Europe as a whole, the welfare gap along the former East-West divide must not be allowed to become fixed or to widen further. The challenge is to ensure that the ideological iron curtain that previously divided Europe is not replaced by a welfare divide that can threaten economic and social stability on the continent.

There is broad agreement both in the EU countries and in Norway that we have a common responsibility to promote further democratic development and greater welfare for the former East-bloc countries. Solidarity in today’s Europe is about expanding the zone of welfare and stability that the countries of Western Europe have enjoyed for decades to encompass all the countries of Europe.

In the decade that has passed since the fall of the Berlin Wall, Norway has allocated over NOK 3 billion to Central and Eastern Europe in the form of assistance and support for measures to consolidate and promote democratic development, a socially oriented market economy and an improved environment. The Central and Eastern European Cooperation Programme, which was developed in the early 1990s, has been an important tool in shaping Norway’s efforts. However, today the situation in Russia is very different from that in the countries that are candidates for EU membership, and this is a logical time to review Norwegian efforts and to define the goals more precisely.

EU enlargement eastwards will be one of the most important contributions to peace, stability and development in Europe. Thus the success of the enlargement process is in the interests of all the countries of Europe. This will make great demands on the candidate countries, on the EU and the EU countries and on the rest of Europe. EU membership will involve a number of challenges for the candidate countries. It will therefore be important to continue to support and develop the cooperation on the necessary reforms and restructuring.

The candidate countries have themselves invested considerable resources in the very difficult transformation from communism to democracy and a market economy. They now have stable democratic governments and functioning market economies. EU enlargement is the main driving force behind the reforms in these countries.

Norway’s cooperation with the Baltic and Central and Eastern European countries must be viewed in this perspective. When they become members of the EU these countries will be cooperating closely with Norway, for example in the European Economic Area (EEA). Thus it is in Norway’s interest to strengthen and develop its relations with these countries.

Norwegian Ministry of Foreign Affairs, 28 March 2001

The process of EU enlargement

The EU is currently negotiating on membership with 10 former East-bloc countries: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. Membership negotiations have also been started with Malta and Cyprus. An enlargement comprising all 12 countries will increase the population of the EU by 105 million, bringing it from about 370 million to about 475 million. Turkey has been given the status of candidate country, with the possibility of negotiating for membership when it meets the necessary political conditions.

The European Commission issues annual progress reports on all the candidate countries. The most recent reports were issued on 8 November 2000 and contain generally positive assessments for most of the countries, even though there is still much to be done before the first of them will be ready for membership. The reports form an important basis for the EU’s technical and financial support and assistance to the restructuring processes, reforms and adaptations that are necessary in order for the countries to meet the obligations contingent on EU membership.

Countries that have applied for membership of the EU (arranged chronologically within each group) and their current stautus

The Copenhagen criteria

In 1993, at the Copenhagen European Council, the Member States made the historic decision that all the countries of Central and Eastern Europe . "that so desire shall become members of the European Union". Accession may take place as soon as the candidate country is able to take on the obligations of membership by satisfying the economic and political conditions required.

At the meeting the heads of state and government of the member countries laid down four criteria for membership:

• The candidate country must have achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.
• It must have a functioning market economy and the capacity to cope with competitive pressure and market forces within the Union.
• • It must have the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.
• It must have created the conditions for its integration through the adjustment of its administrative structures, so that European Community legislation transposed into national legislation is implemented effectively through appropriate administrative and judicial structures.

In a speech in Brussels on 16 January 2001, Commissioner Günter Verheugen, who is responsible for enlargement, stated that:

"Negotiations with candidate countries that are suitably prepared should be concluded by the end of 2002; these countries should be able to take part in the European elections in spring 2004."

Norway and the Candidate Countries

"The Government wants Norway to support the enlargement process and the preparations of the applicant countries for EU membership. The Government is therefore preparing a plan of action for our relations with the candidate countries. The aim is for the plan of action to be followed up by concrete projects in the areas in which Norway has special interests."

(Report No. 12 to the Storting, Norway and Europe at the Dawn of a New Century)

Norway and the candidate countries

Norway has close political contacts and no bilateral problems of any significance in relation to the candidate countries. A broad range of contacts has been established, especially with the Baltic and Central and Eastern European countries, and issues of common interest are regularly discussed during exchanges of visits by politicians and government officials.

More than 10 years after the upheavals in Eastern Europe we have rediscovered old ties and established new ones, together with a broad range of contacts in the political, economic and cultural spheres. This applies particularly to the three Baltic countries, which participate in a number of fora where Norway is active, especially Nordic-Baltic cooperation, the Council of the Baltic Sea States, where Poland also participates, and through increasingly close people-to-people cooperation. Poland occupies a special position because of its location, its size and the fact that it is Norway’s largest trading partner in the region. Together with Poland, Hungary and the Czech Republic are close allies of Norway in NATO. Slovakia has longstanding ties with Norway and Slovenia is an important stabilizing element in its own region. Romania and Bulgaria are large countries with a considerable potential for growth, even though the reform process involves great challenges in both countries. Malta and Cyprus form a separate group of candidate countries with their own needs and interests. All 12 candidate countries are of importance to Norway because of their prospective membership of the EU and participation in the EEA, and our ties with them should therefore be generally strengthened.

In recent years Norway has developed a broad dialogue with Turkey in many areas, such as security policy, economic issues and democracy and human rights. Turkey occupies a special position in relation to the EU. The country has been given candidate status, but no membership negotiations have been begun. Turkey is therefore not dealt with in the same way as the other candidate countries in the present Plan of Action. However, Norway is interested in further developing its close cooperation with Turkey, and follows developments in the country and in the country’s relations with the EU with great attention. Turkey will be included in the Plan of Action when developments make this appropriate.

EU enlargement will be positive for European and Norwegian security. The process is promoting a constructive adaptation to international norms for peaceful conflict resolution at many levels. It is drawing a large number of countries into binding political and practical cooperation. This streng-thens European security. The prospect of being included in a larger European fellowship may also help to stabilize the direction of domestic policy in a number of European countries, even in parts of the continent where EU membership is a relatively distant prospect.

Norway and the candidate countries come together in a number of international fora. The Government intends to take advantage of this to build a closer network with the candidate countries. Norway is supporting a number of measures vis-à-vis these countries under the auspices of the Council of Europe. It may be appropriate to follow this up with further funds. The OECD is also a possible partner for project cooperation, as it has been in relation to the Baltic countries. A number of the UN’s specialized agencies and the OSCE are also central fora where specific cooperation projects between Norway and the candidate countries can be initiated.

• EU enlargement is creating a need for a systematic review of the ties between Norway and the candidate countries with a view to a more systematic utilization of the contacts that have already been formed through bilateral and multilateral channels. The aim is to strengthen the ties with these countries.

The NATO and EU enlargement processes

The NATO and EU enlargement processes are separate, but they are often experienced as being linked since the list of candidates to some extent overlaps. Poland, the Czech Republic and Hungary are applying to join the EU, but have been NATO members since 1999. Turkey, which is also a candidate country for EU membership, has been a member of NATO since 1952. Estonia, Latvia, Lithuania, Slovakia, Slovenia, Romania and Bulgaria are applying for membership of both organizations. Albania and the former Yugoslav Republic of Macedonia are only seeking membership of NATO, while Malta and Cyprus are only seeking membership of the EU. NATO takes account of each individual country’s wishes regarding the form of its affiliation with the Alliance and its security policy orientation, and establishes political and economic criteria as well as military ones for evaluating an applicant country’s suitability for membership. However, the final decision to invite a country to join NATO is a political one, and is influenced by developments in the individual country and an overall assessment of European security and stability.

In both enlargement processes the integration of former East-bloc countries into Western political structures is the overriding objective. The criteria for evaluating the individual countries are very similar as regards political stability, democratic development and solutions to ethnic issues and border conflicts. In practice the Annual National Programmes under NATO’s Membership Action Plan (MAP) often draw on EU assessments of the practical and economic reforms being carried out. In the same way the EU also draws on NATO’s assessment of the ability of the various countries to contribute to European security.

EU enlargement and the EEA

The EEA Agreement is implemented in the EU in the same way as the agreements entered into by the EU with third countries. It is part of EC law. This means that new EU members will also be parties to the EEA cooperation. They will join the EU pillar of the EEA cooperation and enlarge the internal market of which Norway is part. Thus when the candidate countries become members of the EU, the political and economic importance of the EU pillar in the EEA cooperation will increase in relation to that of the EFTA pillar.

The consequences of EU enlargement will be mainly positive for Norway, as for the rest of Europe. The enlargement of the internal market will lead to closer cooperation between Norway and the new member countries within the areas covered by the EEA Agreement. EU enlargement will mean intensified competition for Norwegian business and industry, but it will also create new opportunities because the internal market will be larger. Common rules and stable operating parameters in a larger market will also provide a sound basis for growth and development.

When they join the EU, the candidate countries’ free trade agreements with EFTA will lapse. For Norway this will mean reduced market access for fish and fish products because the EEA Agreement does not provide for free market access.

Norway and the candidate countries – contact between political parties and organizations

A number of networks have been established between political parties, organizations and institutions in Norway and the candidate countries. The Government wishes to encourage these contacts through the Plan of Action so that they can in the long term increase the knowledge and expertise of all parties, to their mutual benefit. The Norwegian foreign service missions play an important role in this work. Under the Plan of Action the embassies will be more actively involved in developing and following up projects and in network-building between Norway and the candidate countries.

Norway has embassies in the three Baltic countries, Poland, the Czech Republic, Hungary and Romania. The Norwegian ambassadors in Austria, Hungary and Romania are also accredited to Slovakia, Slovenia and Bulgaria, respectively.

• The Plan of Action is intended to strengthen civil society and encourage network-building, especially between political parties, youth organizations and the social partners.
• In order to safeguard Norwegian interests in relation to the various candidate countries, the establishment of a Norwegian embassy in all of these countries will be considered.

Exports

(including oil

and gas)

Imports

(including oil

and gas)

(All figures are in NOK million)

Trade and investment in Central and Eastern Europe

Trade between Norway and the 10 candidate countries in Central and Eastern Europe has risen from about NOK 4 billion in 1992 to about NOK 12 billion in 1999, in other words it has trebled in eight years. Altogether trade with these countries only

amounts to 2–3 per cent of total Norwegian trade, but we assume that there is a great potential for economic cooperation with this market. If all 10 candidate countries join the EU the internal market will be increased by over 100 million people.

Norwegian investments in the candidate countries are in general modest. At the same time Norwegian investors occupy an important position in countries like Latvia and to some extent also in Poland, especially in certain sectors. The Baltic Sea region represents a large market, with over 60 million inhabitants, a market that is growing rapidly and that has a great potential as regards trade with Norwegian companies and the establishment of Norwegian companies locally. Some estimates indicate that Norway has an unutilized potential for trade with the Baltic countries and Poland of about NOK 8.5 million, including well over NOK 3 billion in unrealized exports. Norway is therefore focusing on the opportunities offered in this region.

There are a number of European, Nordic and national finance institutions that are potential cooperation partners for Norwegian companies in the candidate countries, for example the Nordic Investment Bank, the European Bank for Reconstruction and Development and the World Bank. With regard to the Norwegian instruments available to the Norwegian business community, reference is made to the account of the Norwegian Guarantee Institute for Export Credits and the Norwegian Industrial and Regional Development Fund below under Existing Instruments. In the Government’s view the existing schemes will continue to function satisfactorily during the enlargement process. What Norwegian companies mainly need is information, knowledge and predictable operating parameters in the countries concerned.

EU enlargement means that the new members will also be part of the EEA. This will require Norway to make considerable efforts to ensure that the agreement and the rights and obligations that follow from it are sufficiently known in the new EU countries, and also to ensure that the agreement is operative immediately when a new country joins the EU. This will be a priority area for the Government during the enlargement process. The Plan of Action can be a useful tool for developing projects that support these efforts at national level and through EFTA. This will include the preparation of material and information for the use of Norwegian embassies and companies vis-à-vis the local authorities in the new member countries.

The Norwegian business sector has on several occasions called for more information on the existing support schemes open to companies. The Government will seek to ensure that the information is easily available, especially for small and medium-sized enterprises.

• There is a need for more accessible information on the schemes available to Norwegian companies in their relations with the candidate countries. This applies especially to small and medium-sized enterprises. There is also a need for measures to increase knowledge of the EEA in order to promote trade between companies.
• Information packages on the EEA should be prepared for the authorities and the business sector. Some material has already been developed. The Ministry of Foreign Affairs and the Ministry of Trade and Industry will follow this up.

The Baltic Sea region – a dynamic region with considerable potential

The fall of the Berlin Wall and the end of the Cold War probably had more positive consequences for the Baltic Sea region than for any other region in Europe. A fifty-year interruption in the contact and ties between peoples and countries has not destroyed the opportunities for social, economic and cultural development and cooperation that have characterized the region for centuries. This is a meeting place where some of Europe’s wealthiest countries come together with new democracies with rapidly growing economies.

Cooperation in the Baltic Sea region has expanded considerably in scope during the last few years. Social conditions in the region have undergone major changes since the Council of the Baltic Sea States (CBSS) was established in 1992, and the cooperation is currently largely influenced by the EU enlargement process and the prospects of EU membership for Poland, Estonia, Latvia and Lithuania.

The prospects for economic development in the Baltic Sea region are very bright. In the next 10 years Poland will be in a position to almost double its GDP, and in Estonia, Latvia and Lithuania the increase is likely to be 60 per cent. This is creating a dynamic situation with great potential for future development in the economic, technological, social and cultural fields, which will have positive ripple effects on neighbouring regions.

Norway’s involvement in the Baltic Sea region is an important part of its policy towards its neighbouring areas. Relations with neighbouring countries, with important current and future EU member states and with Russia are developed in the CBSS. Today the Council plays a central role in promoting dialogue in the region. Together with the Barents Council and the Arctic Council, the CBSS plays a key role in the further development and implementation of the EU’s Northern Dimension.

During the Norwegian chairmanship of the CBSS, from June 1999 to June 2000, a number of initiatives were taken to strengthen the cooperation. Norway gives priority to further developing the cross-border regional cooperation, increasing the investment in regional cooperation on combating communicable diseases, encouraging reforms and cooperation between universities and intensifying crime prevention efforts.

Together with Sweden, Norway has initiated the establishment of an information technology network for use in combating the sexual exploitation of children. The network will provide new opportunities for cooperation and the exchange of information between countries. It will also help to improve the living conditions of vulnerable groups of children and young people by enhancing expertise and focusing on appropriate measures against the abuse and exploitation of children and young people.

For a number of years Norway has also made active efforts to establish and develop energy cooperation within the Baltic Sea region. The goal is to promote sustainable development in the region by encouraging environmental considerations to be taken into account within the framework of more integrated and deregulated energy markets. The Nordic prime ministers agreed on the principles for this at a meeting in Bergen in June 1997. The energy cooperation is now being concretized and a detailed cooperation plan for the period 2000-2002 has been adopted. The priority areas are an integrated electricity market in the region, closer integration of the natural gas markets, climate policy, energy efficiency and renewable energy sources.

Four ad-hoc groups for electricity markets, gas markets, climate issues and energy efficiency respectively have been set up under the cooperation plan. The Nordic Council of Ministers (the energy ministers) has allocated funds for a secretariat and Norway has also contributed funds directly to these efforts.

• The Baltic Sea region is the main focus of Norwegian efforts in relation to the candidate countries. In Norway’s view, it is important to become involved in the dynamic processes taking place in the region, which will be intensified as more and more of the countries become members of the EU. Norway’s links with Poland and the Baltic countries will be strengthened by the greater emphasis being placed on strategically important sectors such as energy, the environment, health, education, children and youth and crime prevention.

The most important institutional cooperation structures in Baltic Sea region are:

• the Nordic Council and the Nordic Council of Ministers, established in 1952 and 1971, respectively,
• the Council of the Baltic Sea States (CBSS), etsablished in 1992,
• the Baltic Sea States Subregional Cooperation (BSSSC), begun in 1993.

The cooperation in this region involves a very large number of actors at different levels and includes a broad range of subjects that are especially suitable for people-to-people contact.

Existing instruments

There are many multilateral and European institutions actively involved in the candidate countries. The World Bank, several UN specialized agencies and the European Bank for Reconstruction and Development are natural cooperation partners for Norway. The same applies to the OECD and a number of Nordic finance institutions such as the Nordic Environment Finance Corporation (NEFCO).

The most important national instruments for providing support and guarantees are the schemes open to the business sector under the auspices of the Guarantee Institute for Export Credits, the Norwegian Industrial and Regional Development Fund and the Norwegian Trade Council. The Central and Eastern European Cooperation Programme directed by the Ministry of Foreign Affairs has played a central part in the general project cooperation in other sectors.

The Norwegian Guarantee Institute for Export Credits (GIEK)

GIEK offers coverage in connection with the export of most types of products and services to over 150 countries. The guarantees are for one or more transactions and cover both commercial risks (that the buyer goes bankrupt or is unable to pay for other reasons) and political risks (war, expropriation and action by the public authorities that prevents payment).

There are special guarantee schemes for the countries in Central and Eastern Europe that involve the highest risks. The most important of these is the CIS/Baltic States Scheme. In exceptional cases, the Guarantee Scheme for Exports to and Investments in Developing Countries may also be used. Today GIEK is an important player in the short-term customer credit insurance market, mainly serving exporters that are unable to secure satisfactory offers on the private market. In practice GIEK is the only agency that offers coverage of long-term loans for the export of capital goods to developing countries, newly industrialized countries and former centrally planned economies. GIEK also offers guarantees in connection with the export of ships. GIEK’s clients come from all over the country and range from small, inexperienced exporters to major industrial corporations. GIEK’s guarantees are furnished on behalf of the Norwegian state and may be used as security when applying for loans from banks and other finance institutions. The conditions and premiums are generally in accordance with the standards and rates for corresponding guarantees in OECD countries.

The Investment Fund for Central and Eastern Europe

The Investment Fund for Central and Eastern Europe is administered by the Norwegian Industrial and Regional Development Fund. The Investment Fund was established in 1997, and originally totalled NOK 70 million. In 2000 a further NOK 50 million was allocated, bringing the total up to NOK 120 million. The rules for dividends were also modified.

The purpose of the Investment Fund is to strengthen cooperation between the Norwegian business sector and companies in the region. The guidelines are similar to those for the Investment Fund for Northwest Russia.

The Investment Fund for Central and Eastern Europe has received many applications from Norwegian investors. Most of the investments financed by the Fund have been made in the Baltic countries, Poland, Hungary and the Czech Republic.

The investments in Poland have been in wood products, fish processing and metals.

Norwegian investors consider it very important to have a partner in the state sector when investing in these areas, and many of the investments would never have been carried out without support from the Fund.

The Norwegian Trade Council

The Norwegian Trade Council was established in 1945.

It promotes the export of Norwegian goods and services and is financed by the Confederation of Norwegian Business and Industry and the Ministry of Trade and Industry.

The head office is in Oslo and clients are mainly dealt with by approximately 40 offices in 32 countries. The Council’s web site (www.eksport.no) provides information for Norwegian exporters on market opportunities abroad.

The Council’s offices abroad provide guidance and advice to companies and public institutions. The staff at the offices in the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia and Turkey have detailed knowledge of the markets in these countries. The offices have an extensive network that is made available to Norwegian companies. The Council also helps companies and investors wishing to establish themselves in accordance with the intentions of the Investment Fund for Central and Eastern Europe.

The Central and Eastern European Cooperation Programme

• Russia has received NOK 1.548 billion, i.e. 51.5 per cent. •The CIS countries have received NOK 0.057 billion, i.e. 2 per cent.
• The Baltic countries have received NOK 0.468 billion, i.e. 15.5 per cent.
• Other Central and Eastern European countries have received NOK 0.350 billion, i.e. 11.5 per cent.
• •Regional measures in the area have received NOK 0.577 billion, i.e. 19.5 per cent.

The total figure is NOK 3.023 billion.

The Central and Eastern European Cooperation Programme

The Government’s Action Programme for Eastern Europe was adopted by the Storting in 1992 for a four-year period. As from 1997 the programme was continued under the name of the Central and Eastern European Cooperation Programme. The main objective has been to support the transformation to democratic government and a market economy and to improve the environmental situation.

The programme is mainly a bilateral instrument targeted towards specific projects relating to countries in the former East bloc, and is based on the principle of helping these countries to help themselves. The countries have considerable human resources, which can be mobilized to solve many of the restructuring problems they are facing. Support for the development of closer European cooperation and stability is also emphasized.

Priority has been given to measures that promote competence-building through close and active technical cooperation with Norwegian experts and other actors. In this way many organizations, companies, government bodies and individuals have taken part in cooperation projects.

Geographically speaking, priority has been given under the programme to Norway’s neighbouring areas in northwestern Russia, with special emphasis on the Barents region and the Baltic countries.

* CIS = Commonwealth of Independent States **CEE = Central and Eastern European countries

(All figures are in NOK million. Funding for nuclear safety measures is included.)

Since the grant scheme was introduced in 1992, over NOK 3 billion has been paid out. The funds have been allocated as shown in the above table.

Up to and including 1996 priority was given to northwestern Russia, the Baltic countries and Poland. As from 1997 Poland was dropped as a priority area, on the grounds that it had advanced relatively far in the reform process. At the same time support for the Baltic countries was increased from 20 per cent to 30 per cent of the total allocations. Well over 4000 projects have been carried out under the cooperation programme since it started in 1992. By means of many small projects cooperation and networks have been built up at central and local levels between the project participants in Norway and the other countries, especially the Baltic countries. This has proved to be useful both for the project implementation itself and for more long-term cooperation.

The Central and Eastern European Cooperation Programme, and before that the Action Programme for Eastern Europe, was set up and implemented in the early 1990s. The upheavals in the east were at this time a fact. The main task was to consolidate and promote democratization and the establishment of a market economy in Central and Eastern Europe, including Russia. Because the situation in the new democracies in the east was so complex and uncertain, project support was based on cooperation with Norwegian partners that already had contacts in the east. This arrangement has functioned well in relation to the aims and goals of the programme.

The situation of the countries of Central and Eastern Europe has changed radically since the cooperation programme was first started. Apart from Russia and the CIS countries, all the countries are now candidates for membership of the EU, and are well under way with negotiations. The reason why they have come so far is that they fulfil the political and to varying degrees the economic conditions for membership set by the EU. There are, however, considerable differences between the candidate countries, and Norway’s efforts must therefore to a greater extent be adapted to each individual country.

For these reasons it has become necessary to reorganize the cooperation programme. It is no longer logical to group the candidate countries together with Russia in the planning and implementation of

Norwegian cooperation policy. Russia’s importance internationally and in relation to Norway, especially in the north, has justified the establishment of a separate Norwegian strategy for Russia, with its own follow-up. In the same way the future members of the EU are the object of a separate plan of action that focuses on their needs and Norway’s interests.

In the budget proposition for 2001, the funds under chapter 197.70 will from now on be divided into two parts, one for the Russia strategy and one for the Plan of Action for the EU candidate countries. This will be followed up in forthcoming budget propositions.

EU support for the candidate countries

Most of the EU’s multilateral assistance to the candidate countries in Central and Eastern Europe is provided through the programmes PHARE, SAPARD (agriculture and regional development) and ISPA (the environmental and transport sectors). The objective of the three programmes is to prepare the countries for membership of the EU as soon as possible. A total of about EUR 3 billion will be allocated annually to the region up to 2006: about EUR 1.5 billion through PHARE, about EUR 1.0 billion through ISPA and about EUR 0.5 billion through SAPARD.

Since 1994 there has been a considerable increase in PHARE support for measures in the judicial system and administrative structures, democratization and the strengthening of civil society, and investment in infrastructure. The PHARE programme also serves as a catalyst for funding from international finance institutions, mainly in areas such as the environment, transport, industry, product quality, labour standards, etc. In this connection the EU has concluded agreements with the European Bank for Reconstruction and Development, the World Bank, the Nordic Environment Finance Corporation NEFCO, the Nordic Investment Bank, the International Finance Corporation and the Social Development Fund of the Council of Europe. During the period 1997-99 the EU allocated EUR 3.5 billion to the European Investment Bank in connection with the latter’s lending activities. About two-thirds of the PHARE funds are used for investment support and measures that promote economic and social cohesion.

SAPARD is part of the follow-up to the European Commission’s Agenda 2000 report, which was adopted in 1999, and is intended to complement PHARE in the agricultural sector and the field of regional development. ISPA is also part of the follow-up to the Agenda 2000 report and like SAPARD is intended to complement PHARE. ISPA is intended to fund measures and programmes in the environmental and transport sectors.

The PHARE programme

PHARE is today the main source of the EU’s financial and technical support for the candidate countries of Central and Eastern Europe, and the budget has increased from EUR 4.2 billion for the period 1990-94 to EUR 6.7 billion for the period 1995-99.

For the current period (2000-06) the total budget is about EUR 9.5 billion (EUR 1.58 billion per annum). PHARE support is provided in the form of donations, and covers a broad range of measures. It is targeted particularly at the candidate countries’ own priorities in their preparations for EU membership.

Under the current PHARE guidelines the implementation of the programmes is linked more closely to the candidate country concerned. The European Commission’s delegations in the candidate countries will have greater responsibility for supervising the projects, while the recipient countries will be responsible for the actual implementation and financing. National funds have been established for receiving and administering PHARE funds and for helping to coordinate other project funds. Financing and Contracting Units have been set up in each recipient country. The units carry out tendering and contracting of the programmes and payment of the financial support on behalf of the authorities in the country concerned.

Cooperation sectors in the candidate countries

This chapter gives a brief description of sectors where Norway will be cooperating more closely with the candidate countries. The efforts in the individual country will be concentrated on a limited number of projects chosen on the basis of the country’s own priorities and in close cooperation with Norwegian embassies. This will help to ensure a better use of resources and better follow-up and evaluation. It will also make Norway’s efforts more visible. Other Norwegian ministries will play an important role in the selection of relevant projects where appropriate.

Competence-building and dissemination of information

The Government’s aim in preparing this Plan of Action is to forge new contacts and reinforce existing ties – political, economic and cultural – with the candidate countries. This will make Norway more visible, which is essential to the promotion and safeguarding of Norwegian interests in relation to developments in Europe in the long term.

In Norway and in the candidate countries, there is an enormous need for more information and knowledge about each other in terms of social conditions, economic and commercial operating par-ameters and the various programmes and measures that exist for promoting contact and collaboration. Norway’s embassies in these countries play a key role in this effort, partly as providers of knowledge and information in both directions and partly as trail-blazers and pathfinders into various areas of activity. The Norwegian Government has a particular responsibility for maintaining and increasing an effective flow of information on official measures and support schemes for economic cooperation, trade, contact and collaboration.

One important challenge facing the Norwegian authorities is to communicate information on the EEA Agreement to the Central and Eastern European and Baltic countries. As future partners in the EEA, it is of major importance that government authorities, the social partners, special interest groups and civil society in these countries know and understand how the EEA functions, and are aware of the rights and obligations it entails for all parties. Seminars and other means of disseminating information on the EEA Agreement in each candidate country are important measures, and will be implemented at national level and in cooperation with EFTA. These efforts are already under way, and the Government puts considerable emphasis on supporting measures and initiatives with these goals in mind. Norway’s embassies can play an active role in making the most of commercial initiatives, political visits and other events that are held in the countries where they are established in order to ensure a broader industrial policy framework for the spread of information.

Democratic institutions and network-building

Democratic structures and institutions will continue to be one of the main focuses of Norwegian cooperation with the candidate countries. Although pluralism and free elections have been established in all of these countries, and all of them meet the political Copenhagen criteria, there is still a need for contact between political parties and NGOs for the purpose of laying a foundation for and developing the concept of participatory democracy. The principles of the rule of law and respect for fundamental human rights, including gender equality, are also fundamental issues that must influence this networking effort. The same applies to conditions that ensure real freedom of expression, and priority will be given to media policy issues. Social security and the needs of children and young people are also obvious areas that require attention.

Protection of minorities and bridge-building between ethnic groups is one area that has been in focus in Europe since the dissolution of the Warsaw Pact. Most countries have signed treaties with neighbouring countries on issues of joint concern, including commitments to groups of people belonging to neighbouring nationalities that are resident in their own territories. Supporting projects designed to build bridges between ethnic groups will continue to be important. This is of particular importance with respect to Latvia and Estonia, where there are large Russian-speaking populations.

Europe’s Roma (Gypsies) are in a vulnerable position due to the extensive social changes now taking place. Most of Europe’s Roma – around 4 million – live in Central and Eastern Europe. Seven out of ten of the candidate countries have a Roma population. The largest group – approximately 1.6 million – lives in Romania, followed by Bulgaria (600 000) and Hungary (600 000). Poor living conditions, discrimination and violence provide fertile ground for conflict at the local and national levels, creating a situation which encourages migration and has caused a large number of Roma to seek asylum in the EU countries and in Norway.

The principles of the rule of law – the independence of the courts and the judiciary, and the establishment of structures to prevent abuse and ensure individuals the protection of law – are central elements in the process of institution-building. Corruption, organized crime, the sex trade and child abuse are threats to democracy and to the whole fellowship of European nations.

Cooperation between European countries in the area of law is a field that is constantly developing. This is based partly on the cooperation through the Council of Europe, but the EU both deepens and furthers this process. The EU has pointed out that some of the candidate countries are not party to key Council of Europe conventions, and that certain structural deficiencies exist, among other things in the courts. Representatives of individual countries are already visiting Norwegian courts under the auspices of the Council of Europe for the purpose of developing their own court systems. One important measure would be to coordinate the resources involved in these visits so that larger groups from a larger number of countries can visit Norwegian courts at the same time.

Justice and home affairs, and police cooperation

The fall of the Berlin Wall altered the economic and political structures of the old Communist regimes. The dissolution of the social structures of the former East-bloc countries has provided fertile ground for organized crime in the form of trafficking in drugs, illegal trafficking in stolen goods and weapons, smuggling of human beings and money laundering. There is now heavy traffic through countries that formerly maintained a close guard on their borders and severely restricted the movement of their people. This poses new challenges in such areas as illegal immigration.

Norway shares the EU’s interest in developing close, effective cooperation with the candidate countries in the areas of law, justice and home affairs, and police collaboration. Full implementation and enforcement of Community legislation in these areas is essential for building the mutual confidence between the parties that is necessary in these areas.

Schengen issues also dominate the negotiations with candidate countries in the field of justice and home affairs. The Schengen provisions aimed at reinforcing border controls along EU/Schengen external borders will present a particular challenge. The new member countries will also be responsible for controlling external borders on behalf of Norway. Some of the problems this poses for the candidate countries are linked to inadequacies in the organization and capacity of border guard services. The rules are extensive and complicated. It is in Norway’s best interests that the candidate countries are assured of technical assistance and acquire the expertise necessary to implement and enforce the Schengen acquis effectively. A number of the candidate countries have expressed a desire to cooperate with Norway in this area.

Police cooperation, especially within the framework of Schengen and EUROPOL, also poses a number of challenges for the candidate countries as regards, for example, police organization and equipment, as well as the lack of plans for fighting certain types of international crime. The EU has also pointed out that a number of these countries have no specific plans for combating drugs. Some of them have also become known as hubs of organized crime, particularly drug-related crime.

One important measure is to assist with infrastructure and other technical facilities, including police communication systems. Training is another field in which Norwegian police have considerable expertise. Through the Nordic Baltic Police Academy, Norway is currently responsible for training in narcotics investigation and general crime prevention in the Baltic countries. This work is being carried out by the Norwegian National Police Academy. This training programme can be expanded to include other candidate countries outside the Baltic region, and it can be broadened to include other fields. Cooperation between Norwegian institutions and their counterparts in applicant countries could also be a worthwhile approach. A successful programme of cooperation is currently being implemented in the prison sector in Latvia. Cooperation in the entire chain of criminal procedure is a possibility, although focusing on a certain stages would probably yield results that are more in keeping with the resources invested.

The workplace and the business world

One important aspect of democracy-building in the workplace concerns the development of respon-sible social partners who are prepared to work for sustainable economic development, social standards, health and environmental standards and workers’ rights. Employers’ organizations in many countries are poorly developed, and unions in many countries are struggling to find their role in a time of far-reaching social restructuring. Stimulating the building of networks across national borders would be one constructive way of encouraging knowledge transfers and the strengthening of civil society in the candidate countries. The Confederation of Norwegian Business and Industry and the Norwegian Confederation of Trade Unions have both proposed measures that will be assessed in the follow-up to this Plan of Action.

The positive consequences of enlargement for the Norwegian business sector will be partly due to the implementation of common rules that will create stable operating conditions in a common market. However, they are also partly linked to the developments and processes of change taking place in the candidate countries in the run-up to membership. The elimination of many of the formal restrictions on trade, investment and other economic relations has already triggered some of the growth and development that are expected to result from membership.

Through the Plan of Action the Government wishes to emphasize the importance of cooperation and measures that will make more people aware of the opportunities for cooperation with the candidate countries in the business sector.

All the countries of Europe are facing considerable challenges in connection with the transition to a modern information- and knowledge-based economy. The EU countries have therefore developed a comprehensive plan of action, eEurope, to meet these challenges. Earlier this year the EU also took the initiative for "the Northern eDimension", based on eEurope, which will encompass the Nordic EU and EEA countries, Germany, Poland, the Baltic countries and Russia. This will also create opportunities for cooperation within the framework of the present Plan of Action.

When new EU members accede to the EEA Agreement, this is likely to have an impact on the labour market in Norway. The Norwegian labour market is currently struggling with manpower shortages in a number of occupations. This, combined with the disparities in wages and purchasing power between Norway and the candidate countries, could lead to more job-related immigration to Norway. The high cost of living in Norway, however, would have the opposite effect, with the result that job-related immigration could tend to be mainly limited to temporary and seasonal work. The 2001 quota for seasonal agricultural workers is about 12,000, most of whom come from the candidate countries. In January 2001 an agreement was concluded between Poland and Norway concerning recruitment to jobs in Norway, and contact has been established with several other candidate countries with a view to concluding corresponding agreements. These will primarily focus on the need for workers in the health sector in Norway. The opportunities available to employees from these countries to gain work experience in Norway will have a positive effect on transfers of expertise and network-building in the candidate countries.

In the Government’s view, there is a need for further analysis and investigation of the potential for higher job-related immigration and its possible impact on the Norwegian labour market.

Health

Health has been singled out as an important sector for cooperative efforts, particularly in Norway’s neighbouring areas. Norway is already involved in combating diseases such as HIV/AIDS and tuberculosis through its participation in the Task Force on Communicable Disease Control in the Baltic Sea region. The Government is giving this priority and it has an impact on both bilateral and regional cooperation. There are also signs in many of the other candidate countries that primary health care services are inadequate and that the public health service is facing major challenges. Cooperation with other actors and international organizations such as the WHO and the EU’s action programme for improving public health are important aspects of Norway’s national measures and should also influence project development in this area.

Food security is another central field in an environmental/health perspective. There are considerable differences between the EU countries and the candidate countries in a number of areas in the fields of plant and animal health, the use of toxic chemicals, hygiene conditions in the food industry, etc. It is unlikely that the EU will accept a lower level of protection against risk factors that threaten human, plant or animal health. A rapid adjustment to EC legislation in this area will therefore be important for the candidate countries, among other things so that their products are ensured access to the internal market and the EEA. Norway possesses expertise that the candidate countries need, and we will be able to help develop systems for quality assurance and monitoring of food production in accordance with EC legislation if the candidate countries so desire and as a supplement to EU efforts.

Health problems resulting from air and water pollution are a source of concern in many of the candidate countries, and the lower standard of living in certain regions is raising the issue of children’s health. These issues will have to be incorporated into Norwegian cooperation projects, especially those at local level.

Education and research

The opening of the EU’s Socrates and Leonardo da Vinci programmes in education and the EU’s Fifth Framework Programme for research, which Norway participates in through its membership of the EEA, to include the candidate countries, provides a good basis for expanding educational and research cooperation between Norway and these countries. The Government wishes to assist in this by encouraging Norwegian colleges and universities to take a more active part in projects in the field of education and research in which EU countries, as well as one or more candidate countries, also participate. Participating in activities of this kind together with EU countries will enable Norway to take advantage of funds made available by the EU for cooperation in the fields of education and research.

Moreover, the networks, contacts and academic collaboration initiated by Norwegian education and research institutions directly with individual candidate countries also represent a significant gain. In its efforts in this direction, the Government wishes to continue, in revised form, the cooperation established by the Norwegian Council of Universities and the Research Council of Norway with colleges and universities in Russia and the Baltic countries. One important element in cooperation in the field of education will be to make a closer assessment of the potential for establishing and training Norwegian visiting lecturers, contributing Norwegian language-teaching materials to institutions in the candidate countries and establishing scholarship programmes for students of Norwegian from the candidate countries who are studying in Norway.

Through the Council of the Baltic Sea States Norway has actively supported EuroFaculty in its work on the reform of higher education programmes in law, economics and administration.

Fisheries

EU enlargement represents a major challenge for the Norwegian fishing industry in that market access for Norwegian seafood will suffer. Instead of full free trade in fish, EEA terms and conditions will throw up a number of high trade barriers. Herring and mackerel, which are not covered by tariff reductions set out in the EEA Agreement, will be particularly affected. The provisions of the EEA Agreement are poorly suited to safeguarding the interests of the fishing industry in the face of an enlarged EU. This aspect of EU enlargement poses a considerable challenge for Norway. We will have to work actively to ensure that the Norwegian fishing industry enjoys the best possible trading conditions. Poland, in particular, occupies an important place in Norwegian seafood exports, as over 60 per cent of Norway’s seafood exports to the candidate countries go to Poland. Poland has a growing fish processing industry, but it depends on imports of raw materials, and its need for fish imports is likely to grow. A cooperation forum has been established between Norway and Poland for the purpose of promoting specific cooperation in such areas as export certification, quality control systems, resource control, marketing and competence-building. Those taking part include the fisheries authorities in both countries, the Norwegian Directorate of Fisheries, the Norwegian Fishermen’s Sales Organization for Pelagic Fish, the Norwegian Seafood Export Council, the Norwegian Seafood Association, the Norwegian Federation of Fish and Aquaculture Industries, and the Norwegian Fishermen’s Association.

The Seafood Export Council has presented a regional plan for Central and Eastern Europe in which Poland figures prominently.

The Government’s intention with this Plan of Action is to help the fisheries sector coordinate its efforts with regard to the candidate countries. In addition to assisting the industry in taking important steps on its own, one of the Government’s major aims is to support cooperation fora and projects of the type now established in Poland.

Energy

As part of their preparations for EU membership, the candidate countries will adapt to EC legislation governing the internal energy market in the fields of electricity and gas. They will thus be part of the future integrated electricity and gas markets.

Norway views the countries of Central and Eastern Europe as an emerging market for Norwegian natural gas. The proximity of the market makes it an interesting one. The potential for new sales of gas to Central and Eastern European countries in addition to contracts already concluded with Poland and the Czech Republic, as well as the possibility of further contracts with these two countries, will depend on a rise in the demand for gas, which in turn will depend among other things on economic growth and the development of the energy policy framework for gas and competing sources of energy. It will also depend on the degree to which each country wishes to diversify its sources of gas. A number of candidate countries have expressed an interest in Norwegian gas.

However, Central and Eastern Europe and the Baltic countries can only be supplied with gas from Norway if a new infrastructure for gas is developed. It is therefore of paramount importance that the operating parameters are predictable. The general trends in operating parameters in the European gas market are thus one of the main factors that must be taken into account by Norwegian gas suppliers in their assessment of the move into the new markets of the candidate countries. If the candidate countries are interested, Norwegian technical and administrative assistance for plans for developing and coordinating the energy markets for electricity and gas should be considered.

Separate cooperation fora for energy have been established under the Nordic energy ministers and the Council of the Baltic Sea States. These include the issues of climate policy, energy efficiency and renewable energy sources as well as the integration of gas and electricity markets. The Committee on Energy under the Baltic Council of Ministers has had close contact with the energy cooperation being carried out in the Nordic Council of Ministers, in which the Baltic energy authorities have emphasized the need for competence-building on issues related to integrated electricity and gas markets. Many central aspects of Nordic-Baltic energy cooperation and the energy cooperation under the Council of the Baltic Sea States are concerned with areas that are very relevant in an EU context. Norway will intensify its efforts in these areas vis-à-vis the candidate countries through specific project cooperation, both bilaterally and through established cooperation fora.

The environment

Environmental issues are among the main challenges facing the candidate countries in their negotiations with the EU, not least as regards their adaptation to and implementation of EC legislation.

EU enlargement will have environmental benefits for the entire European continent due to more effective implementation of legislation relating to the environment, alongside the economic growth that preparations for membership and membership itself are expected to bring. In principle, the EU’s environmental legislation is to be implemented in the candidate countries prior to their accession. From that point on, all new products manufactured in the candidate countries and all new facilities built there are to conform to existing Community legislation.

The candidate countries’ alignment with the EU’s environmental legislation will be good for Norway. Most of Europe will thus, for all intents and purposes, have common environmental legislation. This is expected to considerably upgrade national environmental standards and effect corresponding reductions in transboundary pollution. Discharges to air and to the Baltic Sea are where Norway, like Sweden, is likely to notice the most significant reduction in Polish transboundary pollution. The EU’s insistence on implementation of environmental legislation, together with the candidate countries’ own desire to join the EU, have meant that environmental issues are being given priority more quickly than they would have otherwise.

Enlargement is expected to accelerate economic growth and consumption throughout Europe. Trade and transport will keep pace, adding to pollution and putting heavily exploited natural resources under further strain. "Environment in the European Union at the turn of the century", a report issued by the European Environmental Agency (EEA) in 1999, presents a relatively gloomy picture of the future of the environment in Europe.

Project cooperation and support to the candidate countries in the environmental field will be given high priority, particularly in connection with long-term cooperation between government agencies.

Norwegian membership of the Polish Ecofund

Poland’s Ecofund was created in 1992 as part of its debt-relief agreement with "the Paris Club", a group of Western creditor governments. Through this agreement, the creditor countries were able to convert up to 10 per cent of Poland’s debt into environmental allocations. Half of Poland’s foreign debt was cancelled in 1992 and the funds were channelled into the Polish Ecofund.

In 2000, the Norwegian Government cancelled 10 per cent, or NOK 180 million, of Poland’s debt to Norway on the understanding that the funds thus freed would be deposited in the Ecofund and that Norway would be given a seat on the Ecofund’s Supervisory Council. In July 2000, Poland and Norway signed an agreement according Norway membership of the Ecofund, and Norway took its place on the Council in September the same year.

The Ecofund targets emissions of greenhouse gasses, local and regional air pollution, environmentally hazardous substances, contamination of the Baltic Sea and contamination of drinking water, waste management, reclamation of contaminated soil and the protection of biodiversity. For the entire period from 1992 to 2010, the Ecofund will have around USD 475 million at its disposal. This is the largest amount of money administered by any single institution so far in the context of a "debt-for-environment swap fund". This amount could become even larger if additional creditor countries become members.

Cooperating with Poland to reduce these environmental problems through Norwegian participation in the Ecofund will help to reduce environmental pressures in Poland and enhance Poland’s ability to meet EU environmental standards. It will also assist Poland to fulfil its basic obligations under the Kyoto Protocol and the Gothenburg Protocol in respect of transboundary air pollution and to comply with protocols calling for reductions in the spread of POPs and heavy metals.

Norway’s membership of the Council of the Ecofund will allow the Norwegian business community to participate in Ecofund projects. The Ecofund will therefore be to the mutual advantage of both countries.

Nuclear safety

Through its Plan of Action for Nuclear Safety Issues, Norway also supports nuclear safety measures in several of the candidate countries. We are currently supporting projects in Lithuania involving safety upgrades and the decommissioning of the Ignalina nuclear power plant with approximately NOK 24 million, projects in Estonia involving safety measures at the Sillamae radioactive waste disposal site with NOK 18 million, and projects in Slovakia involving safety upgrades at the Bohunice nuclear power plant with NOK 2 million.

Norway’s strategy is to work for the closure of high-risk reactors while supporting measures to enable their operation at higher levels of safety until they are closed. Our efforts are also aimed at improving the supervision and control of nuclear facilities and radioactive materials. One of Norway’s priority goals is to help former East-bloc countries accede to international agreements and other rules governing nuclear activities.

In addition to its bilateral efforts, Norway supports measures implemented by the EU and the G7 under the Nuclear Safety Account (EBRD). The EU has set up a fund for upgrading the safety of nuclear power plants in Lithuania, Ukraine, Bulgaria and Slovakia. To date, Norway has so far contributed to the funds for closing the Ignalina plant in Lithuania and Chernobyl in Ukraine.

Through its Plan of Action for Nuclear Safety Issues, Norway also contributes NOK 1 million annually (so far up to and including 2002) to EURATOM, the nuclear part of the EU’s framework programme for research. In addition to the funds contributed by the Ministry of Foreign Affairs, equal amounts are also contributed every year by the Ministries of Health and Social Affairs, Finance, Agriculture and the Environment, for Norway’s participation in EURATOM.

Cooperation with the individual candidate countries. Priorities

The Norwegian embassies are expected to play a very active role in following up the Plan of Action, both as network-builders and as door-openers for project cooperation development. "Country strategies" are to be drawn up for each individual candidate country, dealing with priority areas and central aspects of the bilateral relations. The following sections deal with the areas of cooperation in each country that have been selected on the basis of talks with national authorities and preliminary responses from our embassies in each country. These areas will be given priority in project development, but will not necessarily prevent other projects from receiving support.

Estonia

• Democracy-building, strengthening administrative capacity, especially in the areas of justice and the courts, networks and NGOs, strengthening civil society.
• Integrating the Russian-speaking population, including support for language training measures.
• Combating communicable diseases (the Task Force on Communicable Disease Control).
• The natural resource sector, including the formulation of policies, plans and legislation especially in the fields of fisheries, the environment (waste disposal, etc.) and energy (conservation and efficiency upgrades, etc.).
• The maritime sector, maritime safety, search and rescue cooperation, satellite-based infrastructure.

Latvia

• Democracy-building, including public administration, NGOs, local self-government and administration.
• Integrating the Russian-speaking population, including support for language training measures.
• Justice and home affairs, including the courts, the police and prison administration.
• Combating communicable diseases (the Task Force on Communicable Disease Control).
• Education and research.
• Natural resources, including development of policy, plans and legislation, especially in
• relation to fisheries, the environment (waste management, etc.) and energy (internal energy market, energy efficiency).

Lithuania

• Democracy-building, including administrative capacity, justice and home affairs and regional and local administration.
• Health, including combating communicable diseases (the Task Force on Communicable Disease Control).
• Competence-building, education and research.
• Natural resources, including development of policy, plans and legislation, especially in relation to fisheries, the environment (waste management, etc.) and energy (internal energy market, energy efficiency).
• Decommissioning the Ignalina nuclear power plant and supporting the social restructuring that the closure of this plant will entail.

Poland

• The environment: the Ecofund and following up membership in the fund. Projects in the environmental sector under the Plan of Action will be a supplement to participation in the Ecofund.
• Fisheries: support for the Polish-Norwegian cooperation forum.
• Health: close contact has been established between the Polish and Norwegian health authorities within the framework of the Council of the Baltic Sea States. Moreover, 300 Norwegians are studying medicine in Poland. In the long term this will establish a good basis for cooperation between Poland and Norway in the health sector.
• Gender equality.

The Czech Republic

• The environment, especially projects focusing on water and sewage treatment and the reduction of air pollution.
• Justice and home affairs: the rule of law, the courts.
• Minorities: the situation of the Roma. Studies of living conditions/statistics, institution-building and NGO contacts.
• Schengen: bringing administrative procedures, equipment and physical border facilities into conformity with Schengen standards.
• Gender equality.

Slovakia

• The environment.
• Minorities: the Roma.
• Development of local democracy.
• Development of the judicial system and cooperation in justice and home affairs.
• Gender equality.

Slovenia

• Reforms in public administration, including the drafting of a civil service act.
• Cooperation in justice and home affairs, border controls, the legal system.
• Consumer organizations.

Hungary

• Border controls/Schengen standards. The EU has already invested a good deal in this area, particularly with regard to the external border crossings with Ukraine and at airports, although there are considerable unmet needs at the other borders as well. Norwegian support in this area could include the provision of further training of Interior Ministry personnel, offering relevant Norwegian expertise, or sharing Norway’s experience in achieving alignment with the Schengen acquis, with twinning as a good example.
• The environment. Niches should be found where Norway will be able to "supplement" EU programmes.

Romania

• Democracy-building, strengthening civil society and minority rights.
• Justice and home affairs, including the courts, the reset of the legal system, combating corruption, etc.
• Training and/or further education in the public sector and central administration.
• Environmental measures at the municipal level.

Bulgaria

• The administration of justice, including the fight against corruption.
• Institution- and democracy-building.

Malta

• The environment, including air pollution, discharges to seawater, and solid waste.

Cyprus

At the beginning of the negotiations in April 1998, the EU made it clear that it was negotiating with the recognized government of Cyprus (the Republic of Cyprus), which was acting on behalf of the entire island. The Greek-Cypriot Government invited Turkish Cypriots to be part of the negotiating team, but the authorities on the northern part of the island rejected the offer. Cyprus meets the Copenhagen criteria, and its goal is full membership in 2003. The Government has already pushed through far-reaching liberalization measures in the areas of foreign exchange, capital and credit. All chapters have been opened for negotiation and 16 chapters have been concluded. Cyprus received EUR 9 million in 2000, of which EUR 6 million was allocated to approximation measures and EUR 3 million to bi-communal projects. It is estimated that the EU will spend EUR 57 million on Cyprus between 2000 and 2004. An agreement on Cypriot participation in the Leonardo, Socrates and Youth for Europe programmes was signed in January 2001.

There seem to be no major problems in the technical negotiations between the Republic of Cyprus and the EU. The main problem is the de facto partition of the island. Through the Peace Research Institute in Oslo, the Norwegian authorities support a number of bi-communal activities on Cyprus.

• Norwegian projects under the Plan of Action will concentrate on bi-communal projects aiming to build confidence between Turkish-Cypriots and Greek-Cypriots, organized for example in collaboration with labour unions, women’s groups and environmental groups.

The Norwegian Plan of Action for the EU Candidate Countries. A summary

Objectives

The Government’s aims with this Plan of Action are to create a platform for broad and strengthened Norwegian cooperation with the candidate countries over the next few years, by encouraging closer contact, network-building and cooperation in a broad range of areas between the authorities and NGOs in the various countries and in the business sector, the working community, civil society and the academic and cultural spheres.

The objectives are:

• to promote security, stability and sustainable growth and development in Europe, by supporting the integration of the Baltic and Central and Eastern European countries into the economic and political cooperation in Europe through membership of the EU.
• to create a platform for broad and strengthened Norwegian cooperation with all the candidate countries, especially the Baltic and Central and Eastern European countries, by encouraging closer contact, network-building and cooperation in selected areas.

Priorities

In the view of the Government, Norway’s efforts in relation to the candidate countries should mainly be directed towards the countries in the Baltic Sea region, i.e. Estonia, Latvia, Lithuania and Poland. Norway’s efforts should also be harmonized with those of others, particularly the EU, in order to avoid duplication of effort, and should be based on Norwegian interests and comparative advantages. In assessments of projects and other support to the candidate countries, the Government puts particular emphasis on the following factors:

• • the priorities of the candidate countries themselves,
• Norwegian interests in relation to the individual country,
• the EU’s assessment of each country and the support and measures it provides.

Target areas

In cooperation with the candidate countries, and on the basis of their priorities, the Government wishes projects to be developed and implemented that can smooth the candidate countries’ path to the EU and to participation in the internal market (EEA), and that can contribute to an effective follow-up to the commitments that membership will involve. In this way we can also safeguard important Norwegian interests in an enlarged internal market and cooperation in the EEA, interests related to, among other things, steering parameters for business activities, enlargement of the market for Norwegian oil and gas, integration of the electricity markets and implementation of common environmental rules.

In the Government’s view, the main focus of Norwegian efforts should be directed towards measures within the following areas:

• democracy, fundamental rights, gender equality and an active civil society
• the environment and sustainable development, research, education and culture
• public administration, administrative systems and market orientation
• the justice and home affairs sector

Implementation of the Plan of Action during the period 2001-2006

The implementation of the Plan of Action is scheduled to take place during the period 2001-2006. This time interval is the same as for the EU’s Agenda 2000. The Plan of Action will have to be continually adjusted and revised in the light of experience and developments in the region. As some of the candidate countries become members of the EU, it will be necessary to re-evaluate Norway’s project cooperation with them.

The most important financial instrument for promoting the objectives of the Plan of Action is the annual appropriation in Chapter 197.70 of the budget of the Ministry of Foreign Affairs allocated to the programmes currently known as the Central and Eastern European Cooperation Programme and the Plan of Action for Nuclear Safety Issues. From now on this appropriation will be divided into three parts: nuclear safety projects, project support to Russia/CIS (Commonwealth of Independent States) and project support under the Plan of Action for the candidate countries.

Future project support awarded under this Plan of Action will build on the positive network that has been established through the Cooperation Programme. Project support to the Baltic countries will be phased in under the objectives of the Plan of Action, but in a more focused way.

New guidelines for project support and a separate application form will be drawn up on the basis of the present Plan of Action.

If the Plan of Action is to be successful in establishing a broader platform for contact between Norway and the applicant countries, it must have a specified period in which to operate. Thus the plan must be ensured adequate funds throughout the period.

• The perspective of the Plan of Action extends to 2006. It will be revised as and when the projects are expanded and country strategies are developed.

Budgetary funding 2001-2002

In the budget of the Ministry of Foreign Affairs, NOK 169 million has already been allocated (disbursements and commitments) for a collective effort in the candidate countries in 2001 and 2002.

Projects that are already under way in the Baltic countries will be phased in under the Plan of Action during 2001-2002 and evaluated according to the guidelines in the Plan of Action. Because of the established networks and the geographical proximity of the Baltic countries, the projects in these countries are likely to be greater in number and smaller, compared with the projects developed in the other candidate countries.

Geographically speaking, for the first period, 2001-2002, Norway plans to increase its support to the three Baltic countries, including projects that are already under way. Poland will become a new target area and project cooperation will be developed with all the candidate countries, based on the criteria in the Plan of Action. Up to 60 per cent of the support will be reserved for the countries in the Baltic Sea region during this first period.

Implementation

The Plan of Action lays down guiding principles for Norway’s cooperation with the candidate countries but does not exclude projects in other areas that meet the main criteria. Greater emphasis will be given to long-term cooperation. The annual allocations to the Plan of Action in the budget of the Ministry of Foreign Affairs provide the framework for the scope and number of cooperation projects that can be implemented.

The Ministry of Foreign Affairs wishes to conduct an active dialogue with external cooperation partners, both the public authorities involved and other actors. Cooperation structures will be established in order to ensure that this takes place.

Projects under the Plan of Action may be initiated by the following actors: Norwegian institutions and actors that have contacts in the candidate countries, actors and institutions in the candidate countries through the embassies, NGOs and multilateral actors.

Separate guidelines and an application form will be drawn up for the Plan of Action. These can be obtained from the Section for Bilateral Relations with Europe and North America, Department for Bilateral European Affairs and the EEA at the Ministry of Foreign Affairs.

Published by

The Norwegian Ministry of Foreign Affairs
7. juniplassen/Victoria terrasse
P.O. Box 8114 Dep, 0032 Oslo
E-mail: infosek@mfa.no