Caspian Energy Journal Caspian European Club
Wednesday, 03 February 2016 16:30

There is a large untapped potential for increased trade and investments between EU and Azerbaijan – Malena Mard Featured

Caspian Energy (CE): Ms. Mard, the current stage in the European Union’s development is far from stable (the crisis in Greece, the situation with migrants, the Ukrainian issue). Would you agree that all these problems are too many for the one union? Is it acceptable to suggest now that the EU’s key motto ‘united in diversity’ has ‘run out of steam’? 

Malena Mard, Head of the EU Delegation to the Republic of Azerbaijan: The EU has undergone many challenging periods during the time of its existence. In fact, the fathers of the Union have founded it to exactly tackle some of these challenges. During times of crisis the EU has many times been able to demonstrate the added value of its very existence by safeguarding peace, stability and prosperity in Europe. I think history has proven that the EU has been able to handle many different kind of crisis and this is also what is ongoing today that EU institutions and EUMS discuss and work together to try to find viable and positive solutions as to the many different challenges of today.

CE: What policy will the EU follow in Azerbaijan and other countries of the Caspian Sea region?

Malena Mard: The EU's policy objectives for the Caspian region are enshrined in the ENP (European Neighborhood Policy) and EaP (Eastern Partnership) policies. The revision of the ENP I am confident will bring a number of adjustments that will allow for an even more flexible and individual tailored approach towards our partners  aimed at better responding to challenges in the neighborhood. A democratic, stable and prosperous neighborhood is a strategic priority and a fundamental interest of the EU. Underlining the importance of a special relationship with the EU's neighbors, the stabilization of the neighborhood in political, economic and security terms will be the main political priority for the EU in the next years. In doing so the EU will pursue its interest and promote universal values.  Key interests in the Caspian region in general terms will continue to be focused around issues such as security/stability, democratization, trade and energy.

CE: What will be effects of the recent escalation of tension in the Caspian, driven by the Syrian issue, on the EU’s energy policy?

Malena Mard: One of the features of the EU energy policy is to provide protection against supply shocks in order to safeguard security of supply. We are still working to find the best possible ways for this, but it is clear that best guarantee for the European energy security is healthy competition in our free single market, overseen by the competent authorities under the rule of law.

CE: You have recently said of the opportunities of the Southern Gas Corridor can be extended in the future and various options may be considered within extension. Could you please specify which ones?

Malena Mard: In order to increase its future security of supply, the EU is interested in diversifying both its supply sources as well as transportation routes. The Southern Gas Corridor (SGC) plays an integral role in this strategy. Part of our expectations is that the SGC will be rapidly scaled up.

The Commission is constantly analyzing and evaluating the developments and potential issues of interest in this area. In particular, after the "Ashgabat Declaration", and following its content, we have set up a working group on the vice-ministerial level, to provide a platform to identify, and discuss, any issues that could be hindering the stakeholders from finding additional supply sources. The group met already once in 2015  and should meet again in coming months.

Technically, the Trans Caspian Pipeline seems a fully realistic and feasible project. However, the exporters of the gas, and the investors in various stages of the infrastructure, are the ones who set the pace of future developments. Their decisions will be based on their priorities and assessments of commercial and political value that they can derive.

EU is working on ensuring that the conditions in the EU market are in line with our principles and interests. The prices that can be achieved, and the extent of guarantees mutually required by the sellers and buyers are determined by the market forces. It is up to the exporters to evaluate and decide where to sell their commodities. We will do all we can to facilitate decision making. I am convinced that the EU is an attractive market, thanks to our institutions and to the demand that can be expected to remain stable under most scenarios.

CE: Which areas of cooperation with Azerbaijan does the EU intend to expand?

Malena Mard: The focus of EU assistance to Azerbaijan for the period 2014-2017 is outlined in the Single Support Framework (SSF) adopted by Commission Decision on 25 July 2014.  With an indicative bilateral allocation of €77- €94 m, the three priority areas for assistance are: regional and rural development, justice sector reform and education. The selection of these focal sectors stems from its coherence with the ENP Action Plan and AZ priorities for the diversification of its economy, improved governance and human capital development. The SSF allocates separate funds for support to civil society in addition to CSO support within the three focal sectors.  Finally, a horizontal envelope is foreseen to support capacity building in the area of regulatory approximation to EU best practices and standards. 

Some more information on our support in the three focal sectors:

a) Regional and rural development - aims at supporting the Government's efforts in the diversification of the economy and promotion of more balanced and sustainable and inclusive growth, while reducing disparities between regions. Those are clear stated priorities for the Government as outlined in the "Concept Vision 2020" and in other strategic documents. From its side, the EU will offer policy advice and assistance on integrated approaches towards economic and social cohesion based on experiences in the management of the European Regional Development Fund (ERDF) and Cohesion Fund (ECF) and during the accession process.

b) Justice sector reform, has historically been, and remains, a top priority for the EU in Azerbaijan, both from a developmental point of view, but also as a key area to promote European values. Looking forward, there are substantial policy areas to be tackled, such as access to justice, alternative dispute resolutions, as well as through our support to the Council of Europe, including: further reform of the penitentiary system including introduction of a probation system, strengthening of Academy of Justice.

c) Education and skills development is a new focal sector. The €19m AAP 2014 Programme on education which will be signed in the coming days focuses on enhancement the quality and relevance of the education system through development of a national qualification framework and quality assurance for higher education and VET; increase the attractiveness and labour market relevance of all levels of VET and strengthening civic participation, governance and inclusiveness of the education system. As such, it responds to a clear need of the country. Currently, the sector is not able to supply the workforce with the adequate skills and knowledge to meet the growing demands of the labour market. According to the European Training Foundation, 40% of the workforce in Azerbaijan enters the labour market without any qualification. In view of the modernization of the sector, the Government has clearly expressed its will to approximating its education and training system to EU policies and practices, which grants a clear comparative advantage to the EU.

CE: Could you please provide details on the progress of the investigation into the deal for acquisition of Greek DESFA by SOCAR?

Malena Mard: The EU Delegation in the Republic of Azerbaijan has no mandate to release details for publication. EU institutions, including DG COMP, work strictly according to the rules set out in the treaties. Independence and discretion are an important part of the rules applying to our competition authorities.

CE: How feasible are prospects to lift the visa regime between Azerbaijan and the EU?

Malena Mard: In order to waiver the existing visa requirements certain preconditions have to be met that are usually being discussed with partners in a so called visa liberalization dialogue. Such a dialogue could be started also with AZ once the existing visa facilitation and readmission agreement (VFRA) is being fully implemented.

CE: When is it planned to sign the TTIP agreement with the USA? What effects will it have on the Caspian countries?

Malena Mard: I think it is premature to talk about effects before a final assessment is signed. However in general the EU is a major trade partner and investor in the Caspian countries and we have been so over the last couple of years. I think it is important to continue to develop ways to facilitate trade and investment even further and I am convinced that there is still a large untapped potential for increased trade and investments between EU and Azerbaijan. 


                                                                                                                                                             Thank you for the interview

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