Remarks by Commissioner Várhelyi at AFET Committee to present the joint communication on the renewed partnership with the Southern Neighbourhood

Good morning Chair!

Honourable Members!

It is my pleasure to be in the AFET committee today again and to present to you our joint communication on the renewed partnership with the Southern Neighbourhood, which was adopted by the College this Tuesday.

Last autumn we marked the 25th anniversary of the Barcelona Declaration, which launched this partnership for the first time with our Southern Neighbours.

This Commission, as you know, considers all its neighbours to be a priority. You have seen us engaging with the Eastern Partner countries, the Western Balkans and now we have a very clear and ambitious renewed strategy for partnership with the Southern Neighbourhood.

We are still the most important economic partner of the region, both in terms of trade and investments. We are still considered the most important political priority and partner for this region. And we want this to remain so, and we want to reinforce this role in the region, with the region.

This will not be the case unless we renew our vows to each other, unless we renew our partnership.

You have seen that during the COVID-19 crisis we have tried to help this region as much as we could. We have mobilised significant funding: €2.3 billion have been redirected to help during the first wave of the economic crisis. But now we need to establish a common long-term strategy. Ever since the first wave of the pandemic, we have been reaching out to the entire region to identify the common challenges and the common interests on which we can build this renewed partnership.

We see that the biggest challenge for the region - and also for us, because we are interdependent with this region - is instability. Instability, which has been further aggravated by the COVID-19 pandemic, be it social, be it economic or be it linked to security.

We propose with the new Agenda for the Mediterranean, a new partnership, which is based on common ownership that serves both the interests of Europe and of our partners in the Southern Neighbourhood.

The new Agenda is tailor-made, accounting for the region’s diversity and aimed at seizing the new opportunities. It is tailor-made because this is a diverse region with different economic structures, different needs and different social situations. It is for that reason that we wanted to listen to them, held a number of constructive dialogues with them and gave priority to those areas they also considered the most important but which also fit in our internal agenda.

To realise our Agenda, for the period 2021-2027, we propose to mobilise up to EUR 7 billion under the Neighbourhood and Development and International Cooperation Instrument (NDICI), which would in turn help mobilise private and public investments of up to EUR 30 billion in the Southern Neighbourhood. We also call on our Member States to join us in our effort in key sectors of interest, allowing us to pull our respective strengths. And, I count on the cooperation with this esteemed committee and the European Parliament more broadly.

The Economic and Investment Plan for the Southern Neighbours – an integral part of the Agenda - will be the blueprint for our action. It will help to kick-start long-term socio-economic recovery and to unleash the region’s untapped potential.

The Plan includes 12 concrete flagship initiatives in priority sectors to modernise economies, strengthen resilience, build prosperity and increase trade and investment to support competitiveness and inclusive growth. These initiatives can boost jobs and give real perspective to the region, particularly its youth.

Considering the strong interdependence within the region, we also propose regional, sub-regional, and inter-regional cooperation, from security to trade, taking advantage of the Southern Neighbourhood strategic location as a bridge to sub-Saharan Africa and the Gulf.

We will support the development of modern, resilient, inclusive, sustainable and connected economies. We will use all available instruments, including technical assistance, budget support and targeted macro-financial assistance. Reform implementation will continue to be key, including for a conducive business environment and investment climate.

We have designed the partnership around five priorities:

1. Human capital development, good governance and the rule of law, including health and vaccines, fair distribution of resources, and access to justice. Respect for human rights and fundamental values as well as efficient, transparent and accountable institutions are the bedrock to sustainable economic development. They are integral to efforts to fight inequalities and making sure that people have access to economic opportunities that will allow them to contribute to their societies and reduce brain drain. We will in particular support young people so they expand their skills, take advantage of the digital transition and reduce the mismatch with labour needs.
2. Economy, mainly strengthening resilience, building prosperity and seizing the digital transition: The impact of the pandemic on the region has been shocking, not only in health terms. It has worsened existing imbalances and sent our neighbours into recession. Looking back at 2020, foreign direct investments have plummeted by over 45 per cent compared to 2019, the 2020 growth projections turned negative (between -5% and -15% on average), trade flows were disrupted for part of the year, public finances were destabilised in an effort to counter the crisis’ effect, with sizeable job losses and increased unemployment (from 5% to over 25% on average), leading to rising inequalities. We need to turn this trend around. We need to have prosperity in the region and the region is ready to reform itself, but it needs help. It needs to create a diverse economy; it needs to become an attractive investors’ hub, including for those looking to shorten their value chains. There is a common interest to invest directly into the economy and create growth and jobs, directly in the region. Digitalisation also offers an enormous opportunity to the region. We therefore propose to strengthen the infrastructure and skills that can support further digitalisation and help to build trust through a legal framework that allows doing business online, especially for SMEs. And with this, we have to create a future, an economic future, also for the youth of this region.
3. Peace and security: Security and peace have been jeopardised in our Southern Neighbourhood for too long. We have seen terrorism, organised crime, illegal migration, including smuggler organisations, drug trafficking and money laundering affect both sides of the Mediterranean. Since the Arab Spring we have seen terrorism on the rise, we have seen irregular migration on the rise, and we have seen the new emergence of organised crime. We have been able to come to a common understanding with our neighbours, our Southern partners, that it is a common interest to stabilise the region. Peace is the essential pre-condition to prosperity. We are also ready to engage even more to help them to fight terrorism, to help them to crack down on organised crime and on irregular migration, breaking up the business models of the smugglers. And we are ready to contribute to this, to stabilise the region together and we are ready to contribute to this long-term.
4. Migration and mobility: We are implementing the external dimension of the Migration Pact, including the support that we are providing for this region to fight irregular migration and forced displacement, through conflict resolution and by addressing socio-economic challenges and providing economic opportunities. You will see very tangible projects will contribute to the emergence of a stronger economy and also a more socially-just economy, meaning that the youth will get the right skills, the right skills for their own economies - for a greener, more digital, more inclusive recovery they are needed at home.
5. Green transition, climate resilience, energy and environment: We will also support investments in energy, environment-friendly infrastructure and innovative solutions that will help keep our common sea clean, our people and livelihoods safe from extreme weather conditions, and create new jobs in pioneering sectors. Addressing both challenges of enhanced energy security and the transition towards low-carbon energy solutions will have to be calibrated to partners’ characteristics and needs. In the Plan, we propose flagships that focus support on the low carbon transition, managing environmental resources, including waste and water, which are critical for long-term food security, as well as measures to protect and restore biodiversity.

To conclude, allow me to underline that the new Agenda for the Mediterranean is just the beginning of the process. Engagement with partners across the board will deepen over the coming months, as we move forward to implementation. Engagement, exchange, and dialogue with our Southern Neighbours, EU Member States, the European Parliament, civil society and social partners will deepen over the coming months. I am determined to bring real change on the ground.

Now I am looking forward to our exchange of views with you.

Thank you for your attention!