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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 HOLZAPFEL Chargé d'affaires a.i. Delegation of the European Union to Belarus. Introduction. Current context: International crisis

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The Role of the EU in supporting Belarusian business

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  1. The Role of the EU in supporting Belarusian business The Third Annual Belarus Finance and Investment Conference, Minsk, October 21, 2010 Jean-Eric HOLZAPFEL Chargé d'affaires a.i. Delegation of the European Union to Belarus

  2. Introduction Current 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

  3. 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.

  4. Overview of EU assistance programmes

  5. 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

  6. Bilateral EU-Belarus Cooperation (2) Approximation of Norms and Standards in the following fields: • Food Safety (AAP2009); • Energy Efficiency of Consumer Goods and Industrial Products (AAP2010)

  7. Bilateral EU-Belarus Cooperation (3) Access to EU Market for Milk and Meat Products from Belarus (inspection visits from EU Food and Veterinary Office)

  8. Bilateral EU-Belarus Cooperation (4) 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

  9. Bilateral EU-Belarus Cooperation (5) Education and Training: • TEMPUS • European Training Foundation

  10. Regional Cooperation (1) Cross-Border Cooperation Programmes (CBC) Poland/Belarus/Ukraine Baltic Sea Region Latvia/Lithuania/Belarus

  11. 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

  12. Regional Cooperation (2) Border Management

  13. Regional Cooperation (3) Transport and Transit

  14. Regional Cooperation (4) 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

  15. Eastern Partnership: EU’s strategic initiative that opens new chapter in relations with Eastern neighbours: Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine Regional Cooperation (5)

  16. 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

  17. 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

  18. Eastern Partnership Flagship on SME Three key components: • 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. • 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. • 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.

  19. 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

  20. 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

  21. SME Facility - Funding Facility for SMEs • The EU grantresources of EUR 30 millionwill 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.

  22. Wider Initiatives Northern Dimension (ND): • ND Business Council • Partnership on transport and logistics Participation in EBRD, WB, IMF

  23. EU Export Helpdesk An instrument to facilitate exports from developing countries into the EU

  24. 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/

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

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

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

  28. EU Exports to Belarus Sectoral Breakdown (2009, %)

  29. EU Imports from Belarus Sectoral Breakdown (2009, %)

  30. EU FDI Flows from/to Belarus

  31. EU FDI Stocks with Belarus

  32. 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

  33. 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 EU and Belarus could do to progress in their economic relations

  34. What the European business need A 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)

  35. THANK YOU FOR YOUR ATTENTION! Delegation of the European Union to Belarus Minsk, Engels St, 34A/2 Tel: +375 17 328 6613 Fax: +375 17 289 1281 E-mail: delegation-belarus@ec.europa.eu Web: www.delblr.ec.europa.eu

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