The Role of the EU in supporting Belarusian business

The Role of the EU in supporting Belarusian business

The Third Annual Belarus Finance and Investment Conference, Minsk, October 21, 2010

Jean-Eric HOLZAPFELChargé d'affaires a.i.Delegation of the European Union to Belarus

IntroductionCurrent context:

International crisis

New opportunities for Belarus: Customs Union in the East Eastern Partnership in the West

Key changes in the EU and its external dimension: Lisbon Treaty, European External Action Service, Eastern Partnership, Europe 2020

Europe 2020 – New growth strategy for Europe: Key features

Smart, sustainable and inclusive growth and greater national and EU coordination

Main targets: 75% of population aged 20-64 employed; 3% of EU’s GDP invested in R&D; 20/20/20 climate change target; at least 40% of younger generation with higher education; 20 mln less people at risk of poverty

Seven flagship initiatives: innovation, youth, ICT, energy efficiency, industrial policy, labour markets, and platform against poverty.

EU ASSISTANCE TO BELARUS

FROM 2007

ENPI

INSTRUMENT

FOR NUCLEAR

SAFETY

STABILITY

INSTRUMENT

THEMATIC

BUDGET

LINES

PRESS AND

INFORMATION

OTHER EU

PROGRAMMES

EXTERNAL

ACTIVITIES

WITH EU

PARTICIPATIONAnnual Action

Programme

(National)

Energy

Environment

Regional

Programme

Transport

Energy

Border, customs

and migration

management,

fight against

organised crime

Environment

Landmines

Regional

Information and

Communication

Programme

Cross-border

Cooperation

Programmes

(CBC)

Multi-countries

Activities

TAIEX

Global

Allocation

ISTC

SupportEIDHR

NSA / LA

Investing

in People

AENEAS

(Migration

And Asylum)

Norms and

Standards:Food safety

Energy efficiency

of consumer goods

and industrial

products

Erasmus

Mundus

EU Visitors

Programme

Youth in

Action

HIV/ Malaria/

Tuberculosis

Global Fund

Metrex

EBRD

Other

Environment

and sustainable

development

Other

Other

Research

FP7

Support to

capacity building

Overview of EU assistance programmes

Bilateral EU-Belarus Cooperation (1)

Support to the Implementation of Comprehensive Energy Policy in

Belarus (AAP2007)

Key areas of support:

- Policy advice

- Renewable energy

- Energy efficiency


Approximation of Norms and Standards in the following fields:

Food Safety (AAP2009); Energy Efficiency of Consumer Goods and Industrial Products (AAP2010)


Access to EU Market for Milk and Meat Products from Belarus (inspection visits from EU Food and Veterinary Office)


Exchange of Experience and Sharing of Expertise (TAIEX)

TAIEX - Technical Assistance and Information Exchange: short-term technical assistance, in line with the overall policy objectives of the European Commission, and in the field of approximation, application and enforcement of EU legislation


Education and Training: TEMPUS European Training Foundation

Regional Cooperation (1)

Cross-Border Cooperation Programmes (CBC)

Poland/Belarus/Ukraine

Baltic Sea Region

Latvia/Lithuania/Belarus

Regional Cooperation (1) - Example

CBC Project: “EU Enlargement and FDI in Border Regions to the NIS” Cooperation project involving Lubelskie

Voivodship (PL), Volyn Region (UA), Brest Region (BY) and German and

French regional authorities


Border Management


Transport and Transit


INOGATE International cooperation programme between the EU, the

littoral states of the Black & Caspian seas and their neighbours, focused on converging energy markets, enhancing energy security, supporting sustainable energy development and attracting investment


Eastern Partnership:

EU’s strategic initiative that opens new chapter in relations with Eastern neighbours: Armenia, Armenia, Azerbaijan, Belarus, Azerbaijan, Belarus, Georgia, Moldova, Georgia, Moldova, UkraineUkraine

Four thematic platforms of Eastern Partnership

Democracy, good governance & stability (including JLS): Also covers electoral standards, media regulations, the fight

against corruption, civil service reform, judicial and police cooperation, confidence building measures, security related issues etc.

Economic integration and convergence with EU policies Trade and market related approximation, socio-economic development,

poverty reduction, social inclusion, equal opportunities, health, environment and climate change

Energy security Accelerated convergence of energy policies and legislation with EU,

construction and rehabilitation of key energy infrastructure, support for the Southern energy corridor, extension of Odessa-Brody pipeline etc.

Contacts between people Culture, support to NGOs, strengthen civil society, increase

student and academic exchanges, better integration into 7th Framework Research Programme, joint media projects

Six flagship initiatives of Eastern Partnership

Integrated Border Management Programme: Alignment to EU standards, a prerequisite for progress on the mobility;

SME Facility: Small and medium enterprises would receive stimulus through technical

assistance, financial intermediaries, risk capital and loans;

Regional electricity markets, improved energy efficiency and increased use of renewable energy sources This also includes the interlinking of the electricity grids;

Southern energy corridor This is a key infrastructure initiative serving to diversify transit routes

and sources of supply for the EU and its partners;

Prevention of, preparedness for, and response to natural and man-made disasters Strengthen disaster management capacities and establish effective cooperation between the EU and the partner countries and among themselves

Good environmental governance Promote environment protection, including addressing climate change, through

strengthened environmental governance

Eastern Partnership Flagship on SME

Three key components:

1. EAST-INVEST: regional investment and trade facilitation project with a budget of 7 mln EUR. It will contribute to the economic development of the Eastern Neighbours and to the improvement of its business environment within the context of developing interconnections between SMEs from EU and EaP.

2. Enhanced EBRD's TAM/BAS Programme (TurnAround Management/Business Advisory Services) to provide advisory services to SMEs in 6 EaP Partner Countries. Funds will be available later in 2010.

3. SME Facility: The facility will be used by European Investment Bank and EBRD. Belarus is not eligible for EIB loans but might use credit lines of the EBRD.

EAST-INVEST components

SMEs technical assistance: capacity building and individual consultancy in areas of customs regulations, market conditions, internationalisation of SMEs.

Trade Fair Technical Assistance: guided visits to international or regional trade fairs

Business-to-Business Facility: B2B meetings, Technical seminars, Technical visits

Business Facilitator (Operator) Technical Assistance Facility: train associations representing the private sector

Institutional Exchange Facility: improve the reciprocal knowledge of participating operators, sharing work methods, study trips to EaP countries

SME Search facility: web site, Database of Companies Profiles

TAM / BAS TurnAround Management: TAM assists small and

medium sized enterprises to transform themselves. TAM team deliver help in:

developing sales and marketing strategies undertaking financial and strategic planning restructuring the organization to attract external finance

Business Advisory Services: BAS assists individual enterprises to engage with local consultants on narrowly-based, specific projects with a rapid payback. The supported projects typically last around four months and assist enterprises to develop and grow by:

enhancing their competitiveness marketing and financial management quality management systems strategic business planning

SME Facility - Funding Facility for SMEs

The EU grant resources of EUR 30 million will finance: Technical Assistance for Financial Intermediaries Credit Enhancement support for PFIs

The objective is to leverage EUR 250-400 million of new on-lending by Private Financial institutions to SMEs

The SME facility will work at:

rebuilding financial intermediaries’ confidence to extend financing to MSMEs following the financial crisis;

enhancing financial intermediaries’ capacity to assess and monitor the related risks and manage their MSME financing;

strengthening and deepening the SME credit markets;

expanding the number of financing options available to the real economy;

promoting continued development of market-based financial institutions and contribute to institution building;

supporting expansion of private and entrepreneurial initiatives, by working with local and international financial intermediaries.

Wider Initiatives

Northern Dimension (ND):

- ND Business Council

- Partnership on transport and logistics

Participation in EBRD, WB, IMF

EU Export Helpdesk

An instrument to facilitate exports from developing countries into the EU

What is the Export Helpdesk ?

An internet service A database on trade in goods Free of charge and free access User-friendly Interactive In 4 languages (EN, ES, FR, PT)

Accessible at:http://exporthelp.europa.eu/

http://exporthelp.europa.eu/



EU and the World: Top 10 EU Trade Partners (2009, Bln. EUR)

364.0

296.4

180.8

162.0

106.2

91.8

79.9

53.6

52.9

47.2

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0

Brazil

India

South Korea

Turkey

Japan

Norway

Switzerland

Russia

China

United States

EU Trade with Belarus (2007-2009, Bln. EUR)

4.4 4.7

2.6

0.5

1.72.4

4.8

6.4

5.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2007 2008 2009

Imports Exports BalanceBillions of euros

EU Trade with Belarus – Sectoral Breakdown (2009, %)

Machinery and transport equipment

34%

Manufactured goods classified chiefly by

material17%

Chemicals and related prod, n.e.s.

15%Miscellaneous

manufactured articles, 7%

Crude materials, inedible, except fuels

3%

Food and live animals5%

Commodities and transactions n.c.e.

1%

Animal and vegetable oils, fats and waxes

1%

Beverages and tobacco0,4%

Mineral fuels, lubricants and related

materials17%

EU Exports to Belarus Sectoral Breakdown (2009, %)


50.6%

Manufactured goods classified chiefly by

material14.3%

Chemicals and related prod, n.e.s.

16.9%


0.3%Food and live animals6.1%


1.6%

Mineral fuels, lubricants and related materials

0.9%

Miscellaneous manufactured articles

7.6%

Beverages and tobacco0.3%


1.4%

EU Imports from Belarus Sectoral Breakdown (2009, %)

Mineral fuels, lubricants and related materials

50%Chemicals and related prod,

n.e.s.10%

Miscellaneous manufactured articles

6%

Manufactured goods classified chiefly by material

21%

Beverages and tobacco0,3%


0,4%


1%Food and live animals

2%


4%


6%

EU FDI Flows from/to Belarus

-0.00

0.03

0.12

0.05

0.130.11

0.05

0.16

0.23

-0.05

0.00

0.05

0.10

0.15

0.20

0.25

2006 2007 2008

Inf low s Outflow s BalanceBillions of euros

EU FDI Stocks with Belarus

0.10.1

#N/A

0.3

0.4

#N/A#N/A

0.5

0.4

0.0

0.1

0.2

0.3

0.4

0.5

0.6

2006 2007 2008

Inw ard Stocks Outw ard Stocks BalanceBillions of euros

State of play in EU-Belarus relations

Partnership and Cooperation Agreement (PCA) negotiated in 1995 but never ratified by the EU

EU Generalized System of Preferences is temporarily withdrawn from Belarus

European Investment Bank has no mandate for operation in Belarus

No bilateral Action Plan under European Neighbourhood Policy

What the EU and Belarus could do to progress in their economic relations

What the EU could offer- Full participation in ENP;- Full participation in

Eastern Partnership; - Deep and Comprehensive

Free Trade Zone;- Action plan under ENP;- More active cooperation

in various fields.

What Belarus could do

- Make progress on 12 points/5 key areas;

- Ensure independent and impartial judicial system

- Observe ILO recommendations on labour rights;

- WTO accession.

What the European business needA favourable framework for investment and

business

for entering a business for operating a business

Fair and predictable rules

Taxes (complicated system and high tax rates) Free price fixing (existing strict price regulation: limiting price

indices, markups) Judicial system (ensure independent and transparent courts) Customs (confiscation practices) Certification (long and costly procedures) Control activity (high and inadequate penalties, fines) Licensing (recently liberalised but still complicated system)

THANK YOU FOR YOUR ATTENTION!

Delegation of the European Union to BelarusMinsk, Engels St, 34A/2Tel: +375 17 328 6613Fax: +375 17 289 1281E-mail: [email protected] Web: www.delblr.ec.europa.eu

mailto:[email protected]

http://www.delblr.ec.europa.eu/

Documents

The Role of the EU in supporting Belarusian business