Hard nuts to crack

The Euro-Med Process falls under the European Commission's External Relations Directorate-General, led by Commissioner Chris Patten. The directorate handles the EU's second biggest external relations programme, Meda, and several other regional budgets worth together around €1 billion a year in new commitments.

The DG is actually responsible for the European Commission's external relations and manages relations with any other country and territory that is involved in the EU's various association and cooperation agreements, with the exception of those that might be in line to join the Union.

In fact, relations with Malta and Cyprus have been and are managed by the Enlargement Directorate-General led by Commissioner Günther Verheugen and are based on first generation association agreements. Other countries have to make do with association agreements on the lines of the one signed with Malta in 1970.

Should Malta decide not to join the EU, relations with the Union will revert to the External Relations DG that is also responsible for the Middle East peace process, in particular through assistance to the Palestinian Authority. It will also mean that Malta might be at the receiving end but will certainly not be among those that take decisions on what should be given and what should not.

DG Patten, as it is commonly known, works on two dimensions. In the context of bilateral relations, it handles 11 agreements and looks after their implementation by erecting a network of relationships in the economic field with the aim of bringing about a Mediterranean Free Trade Area by 2010, not any easy task given the various obstacles set out in my first article.

The regional dimension is an even harder nut to crack. In fact, it is taking more time than planned because of the heterogeneous nature of the countries involved.

The varying levels of the several economies make the going quite hard. And the setbacks suffered by the Middle East peace process is of no help at all. "These elements have weighted against us," a normally optimistic DG Patten high official told me.

And yet the directorate still pushes on with varying results according to the various recipients. "Governments are responding, some more, some less," sums up the situation. "We cannot stop everything because someone is not active, and therefore are applying some degree of variable geometry."

The priorities for Meda resources at a bilateral level are: support to economic transition with the aim of preparing for the implementation of free trade through increasing competitiveness with a view to achieving sustainable economic growth, in particular through development of the private sector; and strengthening the socio-economic balance in order to alleviate the short-term costs of economic transition through appropriate measures in social policy.

Meda has financed projects such as structural adjustment programmes in Morocco, Tunisia and Jordan, the setting up of a Syrian-Europe Business Centre, a social fund for employment creation in Egypt, the rehabilitation of public administration in Lebanon, rural development in Morocco and basic education facilities in Turkey.

European Investment Bank loans were directed at projects to improve waste water treatment and management of water resources in Egypt, Lebanon, Jordan, the West Bank and Gaza Strip, and Morocco, to reduce pollution and modernise traffic control systems at airports in Algeria, renovate a train line in Tunisia and reconstruct infrastructures and industry in Turkey following the 1999 earthquake.

These and other projects are intended to bring about two fundamental prerequisites necessary for the accomplishment of the Barcelona Process objective. These are the expansion of the infrastructure and the implementation of structural reforms.

By any standard, this is a tall order. Not because it is not possible to reach these goals but because, given the restraints mentioned in my first article, the ground does not seem to be fertile enough to bear fruit as planned. It is going to take much more time than envisaged to see tangible results.

Not because of any lack of insistence from the EU side. "We have been proactive," an aide of Mr Patten told me, "but the bases for the reforms are not sufficiently dynamic."

The dominance of the role of the state is a hurdle that often proves difficult to surmount. Quite often, the legislation needed to move forward is not in place.

State monopolies do not have the capacity to invest, and privatisation has made some advances only in Egypt, Morocco and Algeria. E-commerce, which plays a vital role in today's world, is slow in taking off the ground. Fixed telephony systems are not spread enough. The private sector is too restricted to exercise any real influence on the development.

In a world where ability to compete is of paramount importance, these are all elements that hinder the Euro-Med process because they strike at its very roots - bringing the "partner" countries in a position to be really competitive.

Concluded