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Speech by Commissioner Christos Papoutsis, seminar on 'Energy Perspectives and Solutions to the problem of Chernobyl'
 
 
 
Brussels, Hotel 'Le Meridien', 6 February 1996
 


Extracts from the Commissioner's speech:

(...) 'It is the year of the 10th commemoration of the Chernobyl accident. It is also the year that, on the basis of the Memorandum of Understanding, we have a real opportunity to implement the G7 Action Plan, in a true spirit of Cooperation between Ukraine and our western partners.' (...)

(...) 'We are convinced today that the way to achieve this common future is through cooperation: economic cooperation, political cooperation, technical and financial cooperation.

We heard the message loud and clear, and were the first off the mark to offer political, economic and technical assistance through specific operational programmes. ' (...)

(...) 'It also became clear that the energy dimension of geopolitics, and economic geography are of enormous strategic importance for all of us.

And this is certainly true for Ukraine. A country located at the crossroads, between Eastern energy producers and Western consumers.' (...)

(...) 'President Kouchma's initiative (for a reform and modernisation programme in the power sector) also fits in well with calls from the international community asking for improvements in nuclear safety all across Eastern Europe, and the eventual replacement of the less safe RBMK reactors of Chernobyl.' (...)

(...) 'Concerning the Restructuring of the Power Sector: The Memorandum of Understanding calls for close cooperation in the development of a financially sound electricity market with market based pricing.

This is a necessary condition for encouraging energy efficiency, and energy conservation. For attracting also the necessary resources needed for nuclear safety improvements, and new capital investments in generation transmission and distribution.

We call on you today to continue working in this direction, until these objectives are achieved.' (...)

(...) 'To demonstrate our commitment to this end, I would like to refer to the recent letters sent by President Chirac of France to President Kouchma, and the Presidents of the European Bank of Reconstruction and Development as well as the World Bank. These letters reaffirm the support to our common goal of improving nuclear safety in Ukraine, while addressing the energy needs of the country.

I would also like to stress the availability of the EURATOM credit facility, as one of the major sources of financing of projects aimed at improving nuclear safety.' (...)

(...) 'The European Commission and the EBRD's Nuclear Safety Account (NSA) are the two sources of funding for these difficult and technically complex projects.' (...)

(...) 'We feel very strongly that a strong, competent and independent safety authority is a necessary condition for the success, and timely completion, of all nuclear safety improvement related projects in the country.

We all recognise that the closure of Chernobyl will have implications for the workers and their families.' (...)

(...) 'As you can see there is a lot to do, and relatively little time to do it. Time is of the essence and if we wish to meet the deadlines proposed for the year 2000, we have to move fast, in a concise and well coordinated way.' (...)

(...) 'In my view, a true spirit of cooperation would require two things (to work together to implement the G7 Action Plan):

First a close technical cooperation between our industry and yours, in order to find the best possible techno-economic solution that addresses the energy needs of Ukraine. This is already under way in a number of the proposed activities covered by the Memorandum of Understanding.

The second, as important as the first, is to maximise the use of the talent that exist in your country. To identify local manufacturers, designers, equipment suppliers and help the potential of local Ukrainian industry flourish.' (...)

(...) 'I appeal to all of you here in this room tonight, politicians, industrialists, parliamentarians, bankers: industrial cooperation should be the centerpiece of our relations with Ukraine.

We must act in this direction and we must do it now.' (...)

(...) 'The opportunity is there to use the G7 Action Plan as the tool to promote industrial cooperation. We should do the same thing with other Eastern European countries. But the opportunity to start it in Ukraine is there today and we should all take it. ' (...)

(...) 'This is necessary if we want our Ukrainian friends to consider us as real partners, not just providers of technical assistance.' (...)

Full Text

Mister Deputy Prime Minister,

Ministers, Members of Parliaments, Ambassadors

Ladies and Gentlemen,

On behalf of the European Commission I have the honour and pleasure to welcome the Ukrainian Delegation to Brussels. To welcome all of you here tonight to the Seminar sponsored by the European Energy Foundation, and the Commission, regarding the "Energy Perspectives and Solutions to the Problems of Chernobyl".

I would like to thank in particular Deputy Prime Minister Yeftuhov, who I know made a special effort to be here tonight, despite a very heavy schedule of work.

I would also like to thank my good friend Rolf Linkohr who, through the European Energy Foundation, had the initial idea of organising this important Seminar.

The timing of this event, ladies and gentlemen, couldn't be better. The signing of the Memorandum of Understanding, between the Government of the Ukraine, the Governments of the G7 countries and the European Commission, last December in Ottawa, makes 1996 a landmark year.

It is the year of the 10th commemoration of the Chernobyl accident. It is also the year that, on the basis of the Memorandum of Understanding, we have a real opportunity to implement the G7 Action Plan, in a true spirit of Cooperation between Ukraine and our western partners.

It is indeed the importance of this cooperation that I want to discuss with you today.

We live in a fast changing world, as a result of the recent geopolitical developments in Central and Eastern Europe.

The prevailing theme we hear all across Europe is the hope and the will of our people for a better common future. And we are convinced today that the way to achieve this common future is through cooperation: economic cooperation, political cooperation, technical and financial cooperation.

We heard the message loud and clear, and were the first off the mark to offer political, economic and technical assistance through specific operational programmes.

The European Union has implemented a comprehensive strategy to support Ukraine, and has set up a strong political and economic partnership with your country.

I would like to mention briefly the main instruments of this policy.

Firstly, the Partnership and Cooperation Agreement signed in June 1994;

Secondly, the macro-economic stabilisation financial support (of 85 MECU from the 1994 budget, and up to a maximum of 200 MECU allocated in the 1995 budget).

Thirdly, the TACIS and SYNERGY Programmes aiming at providing support in the transition to a market economy.

We knew from the beginning that it was not going to be easy. That it would take a lot of time and effort for the economies of our eastern neighbours to be transformed into market economies. And we see today that the transition is painful and is taking longer than expected.

It also became clear that the energy dimension of geopolitics, and economic geography are of enormous strategic importance for all of us.

And this is certainly true for Ukraine. A country located at the crossroads, between Eastern energy producers and Western consumers.

Ukraine, a major energy consumer itself, provides one of the most important energy bridges between East and West. But this important bridge was in need of some restructuring and renovation.

This is something that was well appreciated early on by President Kouchma and his administration.

As you are well aware, they embarked on an ambitious reform and modernisation programme, with special emphasis given to the power sector.

This initiative of your President fits in well with the European Union's assistance programmes such as TACIS and SYNERGY.

These are programmes designed to provide the technical assistance needed, in order to achieve the objectives of the reform process, as did other bilateral and multilateral assistance programmes.

President Kouchma's initiative (for a reform and modernisation programme in the power sector) also fits in well with calls from the international community asking for improvements in nuclear safety all across Eastern Europe, and the eventual replacement of the less safe RBMK reactors of Chernobyl.

Today, a year and a half after the Summits of Corfu and Naples, we have covered a lot of ground. We have the Memorandum of Understanding which defines the objectives of our energy cooperation for the year 2000 and beyond. It provides us with the road map, it tells us how to get there.

The Memorandum of Understanding covers all the complementarities between the development of a long term energy sector strategy in Ukraine, and the measures needed to support the closure of Chernobyl. Taking of course into account sound economic, financial and environmental criteria.

Concerning the Restructuring of the Power Sector: The Memorandum of Understanding calls for close cooperation in the development of a financially sound electricity market with market based pricing.

This is a necessary condition for encouraging energy efficiency, and energy conservation. For attracting also the necessary resources needed for nuclear safety improvements, and new capital investments in generation transmission and distribution.

We call on you today to continue working in this direction, until these objectives are achieved.

We place particular emphasis on the strategic importance, and the potential gains from energy efficiency initiatives. Both at the point of generation, as well as at the point of consumption. What we call demand side management.

Concerning the Energy Investment Programme: Ukraine and the G-7 have undertaken to cooperate with the International Financial Institutions (IFI's) as well as foreign and domestic investors.

The aim is to prepare projects, based upon least cost planning principles, for the completion of Rovno 4 and Khmelnitsky 2 reactors, thermal and hydro rehabilitation, pumped storage and energy efficiency activities

To demonstrate our commitment to this end, I would like to refer to the recent letters sent by President Chirac of France to President Kouchma, and the Presidents of the European Bank of Reconstruction and Development as well as the World Bank. These letters reaffirm the support to our common goal of improving nuclear safety in Ukraine, while addressing the energy needs of the country.

I would also like to stress the availability of the EURATOM credit facility, as one of the major sources of financing of projects aimed at improving nuclear safety.

Regarding other Nuclear safety improvements:
The Memorandum of Understanding pledged for continued cooperation in preparing short term safety upgrades of Chernobyl Unit 3. It also pledged the decommissioning of the Chernobyl complex, as well as for cooperation in the development of a cost effective, and environmentally sound solution for the Unit 4 Sarcophagus.

The European Commission and the EBRD's Nuclear Safety Account (NSA) are the two sources of funding for these difficult and technically complex projects.

I want to stress here the importance we attribute to the role of the National Safety Authority in Ukraine, in order to achieve these nuclear safety objectives.

We feel very strongly that a strong, competent and independent safety authority is a necessary condition for the success, and timely completion, of all nuclear safety improvement related projects in the country.

We all recognise that the closure of Chernobyl will have implications for the workers and their families. As you know, we are working together with the United States in assisting the Ukrainian Government develop an Action Plan. A plan that will deal with the social implications of the closure.

As you can see there is a lot to do, and relatively little time to do it. Time is of the essence and if we wish to meet the deadlines proposed for the year 2000, we have to move fast, in a concise and well coordinated way.

I want to emphasise here the importance I attribute to the Energy Charter Treaty. The European Union and the other signatory countries of the Treaty have placed a lot of confidence in this new legal framework.

A framework that is designed to promote and catalyse international energy cooperation, including international energy investments. The ratification of the Treaty in the near future should become one of our first priorities.

Up to the present, the European Commission has provided Ukraine with assistance in studying specific problems and recommending solutions. It is true that in the field of nuclear safety we have also provided some small equipment, in order to address short term site specific safety problems.

The first opportunity we have, however, to initiate major investments in turn key projects, both nuclear and non-nuclear, is now, through the implementation of the G7 Action Plan. As you know the European Union is the biggest donor and an important lender at the same time.

Here we have an opportunity, a unique one I would say, to work together to implement the Action Plan.

But how do we do this? Do we ask Western industry to provide the know how and the equipment, and we pay the bill through grants or loans?

In my view, a true spirit of cooperation would require two things (to work together to implement the G7 Action Plan):

First a close technical cooperation between our industry and yours, in order to find the best possible techno-economic solution that addresses the energy needs of Ukraine. This is already under way in a number of the proposed activities covered by the Memorandum of Understanding.

The second, as important as the first, is to maximise the use of the talent that exist in your country. To identify local manufacturers, designers, equipment suppliers and help the potential of local Ukrainian industry flourish.
I believe that today an additional stimulus is needed. A stimulus, which can accelerate the necessary transformation of the Ukrainian economy to a market economy.

This could be provided by transferring know how to your country through licensing agreements, joint ventures or other means. By allowing the manufacture of technologically advanced equipment in your country, whether for nuclear or for non-nuclear applications. Both for use domestically, or to be exported to other Eastern European countries.

Ladies and gentlemen,

I appeal to all of you here in this room tonight, politicians, industrialists, parliamentarians, bankers: industrial cooperation should be the centerpiece of our relations with Ukraine.

We must act in this direction and we must do it now.

The opportunity is there to use the G7 Action Plan as the tool to promote industrial cooperation. We should do the same thing with other Eastern European countries. But the opportunity to start it in Ukraine is there today and we should all take it.

This is necessary if we want our Ukrainian friends to consider us as real partners, not just providers of technical assistance.

I thank you very much for your attention and wish you a pleasant evening.

SPEECH/96/37
 

 

 
Ημ. Έκδοσης:07/02/1996 Share Εκτύπωση
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