EU DONOR COORDINATION IN THE BALKANS (ALBANIA)

UNCLAS SECTION 01 OF 02 BRUSSELS 000098

SIPDIS

SIPDIS

USAID FOR E&E AND ODP; STATE FOR EUR/ACE, EUR/SCE, EUR/ERA

E.O. 12958: N/A
TAGS: EAID PREL EUN XH ZL
SUBJECT: EU DONOR COORDINATION IN THE BALKANS (ALBANIA)

REF: A. BRUSSELS 00034


B. BRUSSELS 00043

C. BRUSSELS 00045


1. SUMMARY: Development programs in Albania were among
several discussed during a recent all-day donor coordination
meeting organized by the European Commission (EC) in
Brussels. EC assistance programs in Albania, estimated at
around 55 million euros in 2007, are expected to increase by
15 percent over the next three years. Areas of particular
programmatic interest for the EC include public
administration, rule of law, corruption and civil society.


2. BACKGROUND: On December 13, the EC hosted an all-day
donor coordination meeting in Brussels to seek bilateral
input in conjunction with the development of a new EC
assistance strategy for the Balkans covering the period
2008-2010. Opened by Michael Leigh, Director-General for
Enlargement, the event was partly a "show and tell" involving
contributions from individual donors. The USAID
Representative to the EU attended on behalf of the US; other
non-EU members represented included Switzerland and Norway.
This is the fourth of a series of cables summarizing current
programs and future plans for various donors now working in
the Balkans.


3. EUROPEAN COMMISSION (EC): The EC described its main areas
of interest in Albania as including public administration,
rule of law, corruption and civil society, with "good
governance" and "rle of law" cited as the two most important
chalenges. Funding levels for 2007 are estimated t 55
million euros. The three-year budget plnning figure for
2008-2010 is placed at 245 euros, representing a 15 percent
increase. Another 20 million euros in "pipeline" projects
from 2005 and 2006 has been set aside for institution
building.


4. ITALY: Italy is the single largest bilateral donor in
Albania and ranks third in terms of total assistance,
trailing only the EC and the World Bank. Overall Italian aid
investments in Albania so far are placed at more than 700
million euros. Areas of specific interest include energy,
water, infrastructure, environment, social welfare, health,
education and business development. A new Italian initiative
will make 27 million euros available for small and medium
enterprise development.


5. GERMANY: Germany ranks with Italy as one of Albania's
largest bilateral donors. In terms of total funding as well
as per capita support, it also ranks among the most important
of all German aid programs in the Balkans. Specific
activities focus heavily on transport, water and wastewater
treatment.


6. SPAIN: The Spanish aid presence in Albania is relatively
modest but includes credits, technical assistance and NGO
support. Funding for 2008 will be around three million euros
in grant assistance, combined with another 6.5 million euros
that is being set aside for micro credit activities. Areas
of interest include training and capacity building in several
sectors, including health, education, good governance and
economic growth. In terms of geographical distribution,
there is a heavy focus on Tirana and the poorer northern
areas.


7. UNITED KINGDOM (UK): Total bilateral aid investments
from the UK in Albania since 1990 amount to 40 million
pounds, with this year's funding level reaching two or three
million pounds. The UK strongly believes that the national
government should lead the development effort. With this in
mind, the UK representative urged foreign donors to encourage
the government to strengthen its coordination effort, not
only vis-a-vis foreign donors but within the Albanian
government itself ("internal coordination is often even worse
than external donor coordination").


8. OTHER COUNTRIES: Austria currently provides some 2.5
million euros in aid to Albania each year. Specific programs
focus on tourism, rural development, water, governance and
anti-trafficking. The Dutch have provided 100 million euros
to Albania since 1991; for 2007-2010, Dutch funding levels
are estimated at 22 million euros. Areas of particular
interest include environmental concerns and good governance.

BRUSSELS 00000098 002 OF 002


The Swiss have allocated 8 million euros for Albania in 2008
and expect this level to continue. Finally, the Swedish aid
program in Albania is shifting more toward integration with
Europe and less toward poverty alleviation. It will also
maintain a strong interest in both good governance and human
rights.


9. COMMENT: This was a working level meeting and the
discussion on Albania was straight-forward and without
controversy. Despite pressing priorities in Kosovo and
elsewhere, it is interesting to note that EC funding for
Albania is expected to increase during each of the next three
years. Issues related to good governance, civil society and
corruption were often cited along with economic growth as
particularly pressing concerns. Donor coordination was also
mentioned as an important concern, especially by the UK which
emphasized that the Albanian government needs to play its
role as the central focal point for coordination in the field.
MURRAY
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