A €500 million-per-year initiative to boost development in the 12 Mediterranean partner countries of the EU does not go far enough to prepare the Union's volatile southern flank to become a free trade area by 2010.
Under the scheme hammered out by Euro-Med finance ministers in Barcelona, the European Investment Bank will gradually increase its loans to the region to €2 billion per year. Analysts gave the initiative a qualified welcome.
“[It] is positive in the sense that it promotes direct investment in medium and small enterprises, which will help create jobs,” Noureddine Fridhi, a policy advisor at MEDEA, a Brussels-based think-tank, told me. But Fridhi said the Mediterranean ministers had hoped to come away with a more generous deal to help them meet the challenges of reform, slowing growth and rampant unemployment.
In addition to increased capital transfers, the EU also needs to step up its technical assistance and liberalise its own trading practices, experts say. “The EU should be more flexible on rules of origin, especially for clothing and textiles, which are very restrictive,” said Miriam Manchin, a research fellow at the Centre for European Policy Studies in Brussels. She added that the EU also needs to remove barriers in agricultural and service sectors.
However, Fridhi suggested the Mediterranean could do more to attract investment, such as implementing political, social and economic reforms.
There is also mounting concern that the Israeli-Palestinian conflict and a possible war in Iraq might delay or scupper the Euro-Med integration process, which began in Barcelona in 1995.
This article appeared in the 31 October 2002 issue of European Voice.