Commissioner’s speech at the Annual EaP Forum in Vienna

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Ministers, Excellences, Ladies and Gentlemen,

I am truly delighted to be here today and I would like to welcome you to my hometown Vienna in full Christmas spirit, which I hope you will also enjoy later. I want to thank you and your countries for supporting this important event and the Austrian Presidency for co-hosting it.

It is a pleasure to be here at the Eastern Partnership Annual Conference together with the Austrian Federal Minister for Europe, Integration and Foreign Affairs, Dr Karin Kneissl.

I also want to welcome all the panellists who have taken on the challenge of shaping today's discussions on the interconnections between the economy, education and skills development.

I firmly believe that we have to get rid of our silo-mentality in order to find solutions for today´s complex challenges.

Therefore, I am glad that so many businessmen, financial experts and representatives of international organisations, civil society, think tanks and academia are with us today.

Already yesterday I attended the Eastern Partnership Business Forum here in Vienna which gave us important food for thought.

Introduction

The hosting of today's first annual conference on Eastern Partnership sends the right signal, also in the light of the upcoming 10^th anniversary of the Eastern Partnership next year.

Last year in Brussels, the Eastern Partnership Summit successfully renewed our joint engagement towards comprehensive reforms in the Partner Countries and set out a concrete vision with four priorities:

1) Stronger economy,

2) Stronger governance,

3) Stronger connectivity and

4) Stronger society.

I am proud to say that together we have made clear progress in all areas, notably when it comes to economy, connectivity and people-to-people.

However, there is room for improvement in the field of stronger governance, which is also key to a favourable business environment and improving citizens’ daily lives. I want to highlight in particular that judicial reforms need urgent attention. We also need to ensure an enabling environment for civil society and independent media.

Implementation of our 20 deliverables for 2020 is NOT just a technical exercise; it is about delivering tangible results for citizens. It is a political project of strategic importance requiring political will and ownership.

This being said, I would now like to focus on the theme of today's conference “A stronger economy for stronger societies – Investing in people for sustainable growth”.

Strengthening the economic development of our Eastern Partners is at the heart of our efforts towards ensuring a stable and prosperous neighbourhood.

This is closely related to the development of education and skills, which are crucial for strengthening competitiveness. It is also the best investment for the future of the young people in the region.

Let me first highlight some tangible results achieved in 2018 in particular regarding small and medium enterprises and then turn to the topic of education and skills

Economy

Small businesses play an essential role in building modern economies, due to their capacity to innovate and adapt to fast changing markets. Therefore they are absolutely crucial for job creation.

This is why EU support for small and medium Enterprises is and will remain a priority in our work with our Eastern Partners.

Access to finance is critical for small businesses but it is often limited to foreign currencies, exposing them to currency risks.

This is exactly why EUR 100 million of EU funds were pledged at the Eastern Partnership Summit in Brussels last year aiming to make local currency lending easier.

More than 50% of the EU’s loans to Small and Medium Enterprises are now in local currency.

Thanks to the EU4Business initiative:

• almost 100,000 enterprises in the Eastern Partnership region have received EUR 1.5 billion in loans ;
• over 20,000 people working in small and medium enterprises, business organisations and partner financial institutions have benefited from training;
• and 14,000 new jobs have been created through this initiative.

Furthermore, the External Investment Plan that we designed last year, will help unlock the investment potential that exist in our partner countries.

By supporting and involving the private sector, the Plan will facilitate and demonstrate the benefits of investing in those countries. Our ambition is that this will have a significant multiplier effect triggering more investment for development.

Indeed, investment in our countries of operation are often perceived as too risky for private business, while we believe there are significant investment opportunities which are currently untapped.

I am proud to announce that following the approval of 12 guarantee tools in July this year 16 new ones have recently been approved.

This means that up to EUR 1.54 billion of European Fund for Sustainable Development Guarantee funds are now being allocated and expected to leverage over EUR 17.5 billion in public and private investment in External Investment Plan partner countries with a particular focus on support to SMEs.

We are also supporting local authorities to implement smart local economic development through the Mayors for Economic Growth initiative.

However, Small and Medium Enterprises in the Eastern Partnership countries still play a rather modest role when it comes to contributing to employment and GDP compared to those in the EU.

This is why more needs to be done!

The EU will therefore continue to support efforts of our Eastern Partners and directly support small businesses in your countries in order to help them develop their full potential.

We need to take a more comprehensive approach looking also at wider governance issues to ensure a good business environment.

Education & skills

Apart from the need for a stronger role for SMEs, an economy cannot function if human capital is lacking, especially when it comes to matching skills and qualifications.

I know from my own experience as Minister for Science and Research how difficult it is to match qualifications and the labour market.

Strengthening investment in young people’s skills, entrepreneurship and employability have been and will remain a priority.

Last September, I had the pleasure to open the first European School outside EU borders, delivering on a long-standing commitment.

The Eastern Partnership European School started its academic year with 30 pupils from all partner countries and I personally had the pleasure to welcome in Tbilisi some of the brightest students to the school.

These students will not only receive a high quality education, but also have the opportunity to learn different languages and experience a wide range of cultures. Bringing more opportunities to the young people of our six Eastern Partner countries goes far beyond the establishment of this School.

Youth is at the heart of the whole Eastern Partnership, as demonstrated at the last Eastern Partnership Summit which endorsed a new Youth and Education Package of EUR 340 million as one of the “20 Deliverables for 2020”.

As part of this package, we agreed to reinforce our successful Erasmus+ programme with increased funding of EUR 120 million until 2020.

Erasmus+ already enabled 17.000 people to participate in academic exchanges and involved 30.000 young people in youth exchanges, mobility and volunteering from all six Partner Countries.

In addition, the EU4Youth initiative will ultimately reach out to 23.000 young people, helping them to become active citizens and develop the skills they need for the labour market.

The EU4Youth initiative includes in particular a Civil Society Fellowship Programme to enable young people to shape the future of their countries and region with their ideas and actions.

Moreover, this initiative is supporting the set-up of business incubators, innovation clusters, mentoring schemes for new entrepreneurs and non-formal catch-up programmes for school leavers.

We are also reinforcing support for Vocational Education and Training with over EUR 80 million allocated until 2020, with a focus on improving skills, boosting private sector involvement in skills development, and modernising qualifications.

Lastly, the successful Young European Ambassadors initiative supports almost 500 young leaders from both the Eastern Partnership and the EU in becoming drivers of change.

Today we have 12 young European Ambassadors here in the room and I look forward to Harutyun Tsatryan’s intervention during the third panel.

But beyond education and skills development we need additional measures to also boost entrepreneurship and start-ups in order to create jobs and increase youth employability.

Public authorities, businesses and public employment services also need to come on board on this. Only then, can we reduce inequalities and achieve a favourable environment for small businesses.

Ladies and Gentleman,

In 2018 and 2019, implementation of reforms and delivering tangible benefits for citizens will be key. Therefore, we need to ensure that partner countries deliver on their commitments.

I wish you fruitful discussions and I look forward to a frank and open exchange of views.

Thank you