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The European Parliament adopted on 26 February a report on the South Caucasus that urges the EU to strengthen its ties with the region. The report also urges the neighbors of the three South Caucasus countries -- specifically Russia and Turkey -- to play a more constructive role in facilitating reconciliation of the region's so-called "frozen conflicts." However, the report also acknowledges that formidable obstacles exist to a greater rapprochement with the EU.

The 26 February report follows the EU's volte face one month earlier, when on 26 January its members reversed their decision to leave Armenia, Georgia, and Azerbaijan out of the "Wider Europe" initiative unveiled last year. The 26 February report authored by Swedish parliamentarian Per Gahrton welcomes that decision, but demands that the bloc do more. Specifically, it asks the EU to contribute more aid, take steps to establish free trade, improve coordination of its involvement in the region, and extend the powers of its special representative to the South Caucasus. The report also says the EU must bring pressure to bear on Russia and Turkey to help resolve conflicts involving the three countries.

When it comes to foreign policy, however, the European Parliament can only act in an advisory capacity. This was evident in the address to the European Parliament by Chris Patten, the European commissioner for external relations. Reflecting widespread skepticism among EU member states -- with which most decision-making powers in foreign policy rest -- Patten put the onus on Armenia, Azerbaijan, and Georgia to begin implementing reforms themselves: "The European Union is closely monitoring developments in all three countries, to see whether there is continued progress toward democracy and continued progress in the economic sphere. We want to see a credible and a sustained commitment to reform, clearly reflected in concrete steps forward -- for example, in fighting corruption."

Many member states are concerned that the inclusion of the three South Caucasus countries will divert attention from other "new neighbors," especially those on the southern coast of the Mediterranean Sea. The inclusion of Armenia, Azerbaijan, and Georgia in the "Wider Europe" program at the EU's June summit now appears likely. However, key to their hopes will be whether the decision is accompanied by concrete proposals for aid and integration.

Georgia, thanks to the positive international response generated by its November 2003 so-called Rose Revolution, appears best placed. There is some support among the member states to elevate Georgia to the ranks of those "new neighbors" -- such as Moldova and Ukraine -- which will receive concrete EU "action plans" in June.

Although the European Parliament would like to see greater EU involvement in conflict resolution in the South Caucasus, this appears to be a long way off. Patten indicated the bloc is not prepared to play an active mediating role. He said that, "On the issue of conflict resolution and reconciliation, the European Commission continues to provide its full support to the [Organization for Security and Cooperation in Europe] and the United Nations in their efforts to resolve the region's frozen conflicts. I was pleased that we were able to discuss some of these matters with the presidency-in-office of the OSCE at the beginning of this week. We stand ready to assist postconflict reconstruction following peace settlements or to assist measures agreed between parties to the conflict, which would reduce tensions and raise confidence between the two sides."

Gahrton, the author of the parliament's report, described the situation in the South Caucasus in an accompanying explanatory note as resembling a "powder keg." He listed internal divisions, a "democratic deficit," poverty and corruption, as well as the so-called "frozen conflicts," to support that point. But he went on to note that the EU "does not appear to view either its security interests in relation to the South Caucasus, or the benefits of deeper economic relations, as important enough to motivate its greater commitment."

The parliament's report repeats earlier calls by deputies to sponsor a comprehensive "stability pact" for the South Caucasus. But Patten said on 26 February that idea is premature.

"The European Parliament takes note of the call for a stability pact for the region. I have to say when the issue was first raised a couple of years ago, there didn't seem to be all that much support for the idea. I'm not yet wholly convinced that the time is ripe yet to return to it. Certainly, it has budgetary consequences, which we'd want to look at in some detail," Patten said.

Other calls which the member states or the European Commission may find hard to respond to include a suggestion that the EU should bring pressure to bear on Russia to play a more constructive role in conflict resolution in the area. The report also notes that stabilization in the Caucasus cannot be brought about without an end to the war in Chechnya, and urges Russia to honor its commitment to pull its troops out of Georgia. Turkey is also asked to establish "good neighborly" relations with Armenia in accordance with its EU candidate status.

Of the three countries, Azerbaijan comes in for the sharpest criticism, with the report expressing concerns over the human rights situation and curbs on media freedom in the country. Gahrton also suggests in his accompanying note that the Armenian side has carried out an "ethnic cleansing" operation around Nagorno-Karabakh, displacing 1 million Azeris. However, on 26 February deputies deleted from the report a request that Armenia withdraw its troops from the five occupied regions adjacent to Nagorno-Karabakh in exchange for the resumption of rail traffic between Baku and Yerevan.

Gahrton also said on 26 February he is worried that the 7 percent vote threshold in Georgia's 28 March elections could leave opposition parties out of parliament, making Georgia "the world's first democratic one-party state."

KYIV REPORTS 9.3 PERCENT GROWTH IN 2003... First Deputy Prime Minister Mykola Azarov said on 28 February that, according to the most recent calculations, Ukraine's GDP grew by 9.3 percent year-on-year in 2003, which is Ukraine's record high during its independence years, UNIAN reported. Earlier the State Statistics Committee had reported that GDP grew by 8.5 percent in 2003. JM

POLISH ECONOMY MINISTER OFFERS FURTHER AUSTERITY MEASURES. A package of bills related to an austerity plan of Economy Minister Jerzy Hausner that were handed down to lawmakers on 27 February provide for a cut of spending by a total of 54.4 billion zlotys ($14 billion) in 2004-07, not the original 49.4 billion zlotys proposed by Hausner in January (see "RFE/RL Poland, Belarus, and Ukraine Report," 20 and 27 January 2004), PAP reported. "If it turns out that the Hausner package provides for measures to reduce the state's lending needs to approximately 3 percent of GDP in the next two years...it should be supported irrespective of the costs," opposition Civic Platform leader Jan Rokita said on 28 February. Rokita said, however, that the Hausner plan seems to be a propagandistic move intended primarily to make Prime Minister Leszek Miller's cabinet look credible on foreign financial markets. JM