PA (05) II.1 E Original: RUSSIAN REPORT FOR THE GENERAL COMMITTEE ON ECONOMIC AFFAIRS, SCIENCE, TECHNOLOGY, AND  ENVIRONMENT “30 Years since Helsinki: hallenges ahead” RAPPORTEUR Mr. Leonid Ivanchenko Russian Federation WASHINGTON D.C., 1 TO 5 JULY 2005

2 Centuries-old experience leaves no doubts as to a unique role that Europe has always played in the global history of human civilization. Therefore, we can positively assert today that  Europe  will  continue  to  determine  the  world  order  for  a  long  time  to  come.  However, under  the  present  circumstances,  in  order  to  head  the  list  of  actors  of  the  global  process Europeans need to take coordinated and consolidated action both within the continent and on the  global  scene.  There  have  been  and  still  are  three  fundamental  issues  to  be  addressed which will, no doubt, determine the geopolitical position of Europe in this century. The   first   one   concerns   the   very   possibility   of   a   successful   completion   of   the integration project. The second one is much more complicated; it concerns the formation of a supranational community in Europe, a completely new process that history has never known. In this connection, a whole range of problems emerge: what form - federative, confederative or some other - this community will take? Will the institute of single citizenship develop? To what extent and how modern democratic norms will be respected, etc? Finally, the third issue relates to the nature of interaction of a united Europe with the rest of the world: whether the European  experience  can  or  should  be  replicated  in  other  regions  of  our  planet?  Will  the European  Union  be  able  to  take  a  leading  role  in  the  economic,  political  and  military  areas without provoking negative attitude, while preserving its social and cultural appeal? The integration idea emerged on the ruins of the Old World after the Second World War.  At  that  time,  arguments  of  Robert  Shuman,  former  foreign  minister  of  France,  and professor  Jacque  Monet -  the  founding  fathers  of  the  European  unity -  concerning  joint building of a new Europe seemed to be naive dreams. However, it was the European Coal and Steel Community established upon their initiative in spring 1951 and composed of six states of Western Europe, that became a cornerstone of the pan-European home. The dream came true. Interstate conflicts (primarily between France and Germany) have passed into oblivion. On  22 November  1972,  consultations  of  35 European  and  North  American  states began   in   suburban   Helsinki   to   prepare   a Pan - European   Conference.   They   marked   the beginning of the Helsinki process. Today, in the beginning of a new century, one should look back at the distance covered by us with all its achievements and frustrations. The first stage of the Conference began in July 1973 in Helsinki, while an intensive meaningful  work  was  carried  out  during  the  second  stage  in  Geneva.  There,  we  had  to consider  a  number  of  positions  of  principle,  first  of  all  the  issue  of  "three  baskets"  (first - political issues, second - economic and trade issues and third - humanitarian problems). The agenda of the Conference on security and cooperation in Europe (CSCE) agreed upon there was established for many years to come. After August 1, 1975, when the Helsinki Act was signed, the CSCE authority began to  rise.  Many  bilateral  treaties  and  agreements  between  European  states  were  signed  which contained a necessary reference to the Final Act, bilateral commissions for cooperation were established  and  pan-European  expert  meetings  on  various  themes  were  held.  The  Soviet Union took certain measures and adopted regulatory acts to improve the condition of stay for foreigners, work of foreign journalists, etc. The  mid 80s  witnessed  fundamental  transformations  in  the  leadership  of  the  Soviet Union.  A  concept  was  put  forward  concerning  "new  political  thinking",  which,  inter  alia, provided   for   normalization   of   relations   with   the   West,   abandonment   of   confrontation, strengthening of peace and cooperation in Europe. The CSCE process was deemed critical for the   achievement   of   those   goals.   This   approach   was   first   demonstrated   in   1986   at   the conclusion of the Stockholm Conference on confidence-building measures and disarmament and in Bern during the European Meeting on Human Contacts. However, a real breakthrough in the Helsinki process - not only in terms of the Soviet approach, but also that of Europe as a whole, was achieved during the Vienna Meeting (November 1986 - January 1989).

3 At   the   beginning,   a   low-key   confrontation   during   the   Vienna   talks   remained concerning the "third basket" but soon positions of the Sides softened and approximated. As a result, a uniquely important section was adopted and added to the Final Vienna document on humanitarian  cooperation,  and  for  the  first  time  a  new  section  appeared -  "CSCE  Human Dimension". The Vienna meeting and the follow-up steps actually put an end to the cold war in the humanitarian area. At the same time, new Soviet leadership headed by M. Gorbachev used participation in the CSCE and respective commitments as an additional tool for a deep democratization of the Soviet society. In  1992,  the  signing  of  the  Maastricht  Treaty  on  the  European  Union  started  the modern  phase  of  the  European  integration.  The  Treaty  embodied  the  main  organizational principles  of  the  united  Europe -  single  citizenship,  commitment  to  a  single  educational, cultural   and   health-care   policy   and   agreed   regional   and   environmental   policy -   and formulated fundamental EU citizens' rights. In  the  same  1992,  the  countries  that  previously  had  been  members  of  both  the European Economic Community and the European Free Trade area integrated into a common European Economic Area. In  the  90s,  irreversibility  of  the  European  integration  became  obvious.  A number  of East  European  countries - Poland,  Hungary,  Czechia  and  later  the  Baltic  states,  as  well  as Slovenia, Romania and Bulgaria - concluded treaties on cooperation with the EU. Successful development of the Pan-European process led to the first since 1975 CSCE Summit in November 1990 which adopted the Paris Charter and contributed to the signing of the Treaty on Conventional Armed Forces in Europe. Following long  years of cold war the CSCE created an effective mechanism of Pan- European negotiations and cooperation (never before in existence). The CSCE expanded the notion of "security" by turning it from a purely military and political  into  a  multidimensional  concept  covering  humanitarian,  economic,  environmental and other aspects. Today, it is taken for granted but 20 - 30 years ago it was a breakthrough. From the very beginning, the CSCE was a unique structure consisting of 35 states of Europe and North America, and all the more so now that the CSCE comprises 55 sates from Vancouver to Vladivostok, actually being the largest Euroasian organization. During its first 20 years in existence the CSCE brought into life such an unusual for Europe  phenomenon  as  greater  role  of  medium  and  small  states - neutral,  non-aligned  and socialist - in  solving  common  European  problems.  At  the  CSCE  meetings  neutral  and  non- aligned countries, the so-called "N + N" Group consisting of 9 states, often took the initiative of  rescuing  the  situation.  Now  that  there  is  no  bipolar  confrontation,  this  role  of  neutral countries is, understandably, a thing of the past. The  CSCE  can  be  credited  for  a  well-established  consensus  principle  during  pan- European talks. As  of  1 January  1999,  11 member-countries  of  the  European  Union  (becoming  12 within  a  year)  introduced  a  single  European  currency - euro.  From  then  on  they  entrusted their monetary policy to the European Central Bank and abandoned the fundamental right of sovereign states - to emit national currencies. A   single   currency   became   a   reality   in   spite   of   the   fact   that   it   was   admittedly considered a utopia for many years. A decisive stage of euro infancy is behind us, and now it strongly competes with one of the dominant currencies of the world - the US dollar. It  can  be  stated  with  certainty  that  today  the  European  Union  represents  a  unique supranational entity which provides optimal functioning of national economic systems under unified legislation and common monetary policy and plans to create in the nearest future the largest single regional economy in the world.

4 Meanwhile, both in the political and economic aspects the formation and development of the European Union creates many new issues to be solved and poses before its initiators a lot of problems, whose solution can and must become an important contribution of the new and united Europe to the social and political experience of the 21^st century. In  the  course  of  the  European  integration  a  number  of  problems  of  political  nature emerge, that go, however, beyond the framework of day-to-day policy. The idea of European unity even today comes into conflict with the concept of national state that reigned supreme in Europe during recent centuries. Not less substantial are economic dilemmas. The integration stage observed today is characterized  by  a  dangerous  division  of  economic  functions  that  used  to  be  traditionally united in a national state. Indeed, on the one hand, in today’s Europe there exist supranational law-making entities that govern the issues of trade, investments and labor and capital market. On  the  other  hand,  such  institutions  cannot  be  sufficiently  effective,  if  deprived  of  the possibility to establish tax regulations and redistribute resources through budgetary system,. The last decade has been marked by an active discussion of the issues of expansion of the European Union. It has made both political and economic problems a reality. The  present  expansion  of  the  European  Union  is  very  closely  connected  with  the NATO’s movement to the East. The decision of the EU leadership on initial practical steps in order  to  prepare  for  the  admission  of  new  candidate  countries  followed  only  after  a  similar step was made by NATO at the 1997 Madrid Summit. This shows the unwillingness of the European Union to provide absolute guarantees of security to post-Soviet candidates, to take responsibility for stabilization of a vast geopolitical space. At the same time, it brings to the forefront and aggravates the problem of mismatched membership in Western unions. The  eastward  movement  of  NATO  may  create  additional  lines  of  tension  not  only between the alliance and Russia, but also between NATO and the EU. Small countries from the group of newly independent states can willingly or unwillingly get themselves in between the  grindstones  of  friction,  divergence  and  contradiction.  The  change  in  membership  and position in NATO may cause, as presumed by some observers, certain differences among the allies or reduce the interest of the US leadership in preserving its role and former obligations in Europe.  On the other  hand, there is an apprehension in the EU that new members of the alliance will weaken the united European positions. During the 90s, when the disposition of forces both in Europe as a whole and in the OSCE changed, the Organization began undergoing negative processes. It started re-focusing from the problems of interstate relations, where it had earlier proved to be successful, to the problems  emerging  inside  states  that  concerned  not  all  states,  but  predominantly  the  ex- Yugoslavian   and   former   Soviet   republics.   This   is   where   almost   all   of   the   missions, information  centers  and  groups  representing  the  OSCE  operate.  Out  of  20  OSCE  missions functioning  today  6  operate  in  the  Balkans,  5  in  Central  Asia,  3  in  the  Caucasus,  and  6  in Eastern Europe. There is not a single mission west of Vienna – as if there exist no Northern Ireland, Cyprus, the Basque Country or Corsica with their problems. And  that  is  just  an  example.  In  a  number  of  countries,  politicians  and  mass  media started to talk about the metamorphoses in the work of the Organization and its degradation. But the majority of sober-minded politicians believe that certain negative trends are not the reason to "bury" the OSCE.  Its major advantages are the unique geographical coverage and the multi-dimensional character of the concept of security. It is within the framework of the OSCE  that  the  Treaty  on  Conventional  Armed  Forces  was  negotiated  and  approaches  to confidence building in military field are being developed. Within the  OSCE  architecture  and  throughout  the  world  there  emerge  new  and  ever more complex challenges and problems. Therefore, it is extremely important:

5 - to correct the existing geographical and functional disbalances in the work of the Organization; - to   get   the   OSCE   back   to   performing   its   main   function -   taking   care   of interstate   relations   rather   than   internal   conflicts,   so   that   it   abandons   its questionable  concepts  of  "humanitarian  interventions"  and  the  doctrine  of "limited  sovereignty".   This  is  required  by   the  European  Security  Charter adopted by the OSCE Summit in Istanbul in November 1999; - to  strengthen  the  role  of  the  OSCE  as  an  organization  by  enhancing  it  legal capacity, developing rules of procedure for its bodies and missions, etc.; - to  seek  a  reform  of  the  OSCE  started  at  the  ninth  meeting  of  the  Ministerial Council in Bucharest (December 2001). After the meeting in Bucharest, certain new topics have emerged which are of major importance   to   all   Member   States,   including   the   topics   of   counteracting   international terrorism, combating organized crime and illicit traffic in narcotic drugs and arms, protecting the rights of ethnic minorities, etc. The  Maastricht  meeting  of  the  Ministerial  Council  (December 2003)  adopted  the OSCE   Strategy   Document   for   the   Economic   and   Environmental   Dimension.   It   reflects changes in the economic and ecological situation in the OSCE region which resulted not only in progress and achievements but also in the emergence of new economic and environmental threats and challenges. Despite  certain  progress  in  developing  market  relations  in  the  OSCE  region,  some Member  States  still  need  assistance  in  carrying  out  reforms  and  integrating  into  the  world economy.  Problems  to  be  addressed  include  weak  and  inadequate  government,  corruption, high unemployment, social and economic inequality and widespread poverty. These are just some  of  the  factors  aggravating  such  global  threats  as  terrorism,  aggressive  extremism  and transnational organized crime. We see a rise in illegal economic activities, including money laundering and its illicit traffic.  Inefficiency  of  legal  institutions  and  weakness  of  civil  society,  lack  of  transparency and accountability in the public and private sectors, flaws in legislation governing economic activities, inadequate application of legal norms and rules, disregard for business ethics and lack  of  sustainable  interstate  cooperation  in  these  areas  make  it  impossible  for  the  OSCE Member States to secure sustainable social development and to effectively tackle challenges and threats to security and stability. In   recent   years,   people   have   become   increasingly   concerned   about   the   state   of environment. Its degradation, unsustainable use of natural resources and inappropriate waste management  have  serious  consequences  for  human  health  and  well-being,  and  for  stability and security of our countries, and can disrupt the functioning of ecosystems. It is impossible to achieve economic growth and to benefit from globalization without the  introduction  of  proper  management  practices,  including  political  measures  to  ensure effective functioning of  market mechanisms, public and private sectors and a well tuned-up system of international relations. Economic cooperation remains a key principle of the OSCE. Cooperation among its Member  States  and  international  and  regional  institutions  and  organizations  is  one  of  the most important ways to strengthen security and stability and to prevent potential conflicts in the OSCE region. However, in recent years, especially after the terrorist attack against the United States on  11 September  2001,  there  emerged  a  new  priority  issue  -  the  issue  of  new  threats  to international  peace  and  security.  That  attack  has  made  every  person  on  Earth  aware  of  the scale of the threat posed by international terrorism. International terrorism is intertwined with many traditional threats, such as:

6 - risk of the spread of nuclear and other types of weapons; - unsettled regional conflicts; - existence  of  a  number  of  "unaccomplished"  states,  that  is  states  which  were declared as such without solving territorial problems, with  growing  genocide and mass exodus  of refugees, and which face humanitarian crises; - growing  threats  of  narcotraffic  and  traffic  in  arms  and  human  beings  as sources of financing international terrorism; - religious  extremism  fueling  separatism  and  fraught  with  even  more  negative consequences; - continuing trend towards drawing the dividing lines between civilizations and religions,   as   well   as   attacks   against   Islam   as   a   religion,   splitting   the international community and provoking terrorist acts. Transport,   energy,   information   and   financial   infrastructure,   as   well   as   priority industries  which  constitute  the  very  basis  of  any  modern  state  have   become  the  most attractive targets for terrorists. Experience shows that they are largely unprotected. There is a pressing need to set priorities in protecting national security interests, that is to determine areas where to concentrate efforts in fighting terrorism: either on eliminating its sources or on involving the entire civil society and private sector in collective endeavors to counter the threat of catastrophic terrorist acts. Also, there is a need for the concentration of international efforts and for the creation of a common institutional infrastructure to promote a more viable society. Ordinary people have to develop the ability to live in the environment of terrorist threats and they should be prepared to invest money in reasonable projects to reduce risks. Today,  sponsors  of  terrorism  know  that  the  main  advantage  of  strikes  against  key infrastructure facilities is not their ability to cause an immediate damage but their side effects undermining the trust of people in state institutions which are of vital importance  for them. Terrorist  acts  cost  the  United  States  billions  of  dollars.  They  caused  damage  not  only  to facilities  and  people  in  major  cities  but  also  to  airlines  well  known  in  the  world.  The  daily income  of  Americans  dropped  and  construction  costs  soared,  as  did  the  costs  of  protecting buildings and other facilities from possible attacks. The  most  attractive  targets  for  terrorists  are  those  strikes  against  which  are  likely  to produce large-scale social and economic shocks. There are two concepts of ensuring security which often "collide". On the one hand, state authorities believe that they should take care only of those areas which cannot develop on the market basis, such as defense or border protection. It  is  quite  common  for  governments  to  be  more  inclined  to  finance  expenditures  on conventional armed forces and armaments related to state security rather than to invest into national security-related programes. More resources are spent, for instance, on ensuring the physical safety of servicemen in military bases than on measures to protect public, civil infrastructures or commercial sea ports. Police and firemen are usually the first who arrive at the site of a terrorist act and they have to act all by themselves for 12 to 24 hours. At the same time, as a rule, they do not have adequate  communication  means  or  individual  breathing  devices.  Medical  emergency  teams, in most cases, have no instruments to determine which chemical or bacteriological agent has been used. Bacteriological strikes against cities with the use of radioactive materials are fraught with  large-scale  and  heavy  consequences.  Most  developed  countries,  let  alone  low-income countries, lack public programs designed to prevent or mitigate the consequences of the use of  such  means.  A  study  carried  out  at  the  request  of  a  Washington-based  Council  on

7 Competitiveness  just  a  year  after  September 11  showed  that  93 per   cent  of  companies' executives  do  not  believe  that  their  companies  may  become  a  target  for  terrorists.  Only 53 per cent  of  respondents  noted  that  their  companies  had  increased  their  expenditures  on security.  That  suggests  that,  as  long  as  public  authorities  will  try  to  share  the  mutual responsibility for security with private owners, threat to the population will grow. Improvements  in  means  of  detection  and  prevention  of  terrorist  acts  will  lead  to improvements in methods of combating crime, drug trafficking, illegal migration and traffic in arms, children and women. Measures to protect infrastructure will make it more resistant not only to terrorist attacks but also to force majeur or emergency situations. It  is  becoming  increasingly  obvious  that  an  effective  struggle  against  the  evil  of terrorism  is  a  struggle  against  both  its  visible  manifestations  and  its  root  causes.  Terrorist activities  often  acquire  a  global  character,  but  their  are  in  many  cases  determined  by  local conditions. They include mass unemployment, lack of social policy, low educational level of young people and even the possibility to get an education. In  the  framework  of  evolving  events  of  the  European  integration  and  the  Helsinki Agreement,  a  Treaty  on  the  Constitution  for  Europe  was  signed  in  Rome  on  October 29, 2004. After 50 years and four attempts Europeans managed to bring the integration process into a constitutional framework. Treaties signed in Maastricht, Amsterdam and Nice helped to settle three key issues. Due  to  delegation  and  combination  of  powers  of  various  countries,  the  European integration has turned into a pillar of the entire  architecture of the political power. The fact that  integration  has  reached  such  a  high  level  means  that  viability  and  legitimacy  of  the European structures are in the interests of all partners. In the process of rapid expansion there emerge a vast political and geographical space requiring lasting order based on common principles. Europe assumes new functions, attracts new members and really needs safeguards of stability. There emerge a political structure capable of withstanding a considerable pressure. The text of the Constitution contains both positive and some negative elements, which requires  a  detailed  analysis  of  the  document.  However,  its  hard  to  deny  that  it  is  a  future political culture of Europe as a pledge of formation of strategical unity that is the basis and the driving force of the ideas embodied in the Constitution. Its ratification will be followed by the practical testing of its provisions, their revision and further development. Our response and actions We should respond to political, economic and environmental challenges and threats to security by further developing cooperation between Member States in various areas. The  OSCE  Parliamentary  Assembly  has  enough  capabilities  to  coordinate  efforts  of parliaments aimed at improving the quality of governance at all levels in accordance with the Platform  for  Security  in  the  OSCE  regions  based  on  cooperation  and  the  desire  to  make  a special  contribution  to  the  prevention  of  new  dividing  lines  and  the  reduction  of  inequality both between our countries and inside them. Cooperation   should   be   based   on   solidarity   and   transparency,   equal   partnership without  discrimination,  mutual  accountability  and  full  respect  for  interests  of  all  OSCE Member  States.  We  should  guide  public  and  private  interaction  in  such  areas  as  trade, transport,   energy,   finance,   investments,   communications,   science   and   technology,   and promote    business    contacts.    That    would    be    a    real    contribution    to    the    meaningful implementation of the Helsinki document entitled "Challenge of the Time of Change" and to

8 the expansion of the OSCE powers to prevent and settle local and regional conflicts, and to strengthen peace on Earth.