EUROPE: Balkan Conflict Could Speed Up EU Expansion

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Niccolo' Sarno

BRUSSELS, May 10 1999 (IPS) - The Balkans conflict, posing a spectacular challenge to the peace and stability of Europe, has forced the European Union (EU) to focus on former communist bloc countries, many of whom are candidates for membership of the 15-member Union

EU finance ministers Monday examined the possibilities of tailoring year’s EU budget to new initiatives as a consequence of the crisis in the Balkans.

Following the rapid deterioration of events in Yugoslavia and neighbouring countries, the EU now says that south-eastern Europe in particular has become a region of “primary strategic importance” for its future.

The worsening economic situation in most countries in eastern Europe, especially in the Balkans, and the huge cost of Yugoslavia’s reconstruction need a well-thought long-term economic and political strategy by Western countries, EU officials in Brussels say.

They say work to update the EU’s eastward expansion-and-reform plans should now be accelerated to take account of the political fallout of the Balkans conflict.

EU enlargement is viewed by insiders as a process coherent with the bloc’s history and aims, and a necessary step not only to boost economic growth but also to put a break on growing illegal migration into the Union from the East.

Last week in Brussels, a senior EU official said the Kosovo crisis could push Romania, Bulgaria and other eastern European countries into “fast track” EU- membership talks alongside Poland, Hungary, the Czech Republic, Estonia and Slovenia.

Nine central and east European countries among 13 nations in the waiting list for EU membership: Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovak Republic, Switzerland, and Turkey.

And in a move unimaginable even a few months ago, senior EU and Albanian officials met late last month to discuss how Tirana could join the queue.

During a recent visit to Brussels, Albanian Prime Minister Pandeli Majko told EU officials that he hoped Albania could join the EU within 10 years – provided peace was restored in the Balkans – and that aid to his country was essential to peace and security in the region.

But important political decisions in Brussels risk being delayed at least until the autumn because of the resignation of the EU’s executive European Commission last March over charges of incompetence, corruption and lack of accountability.

Acting as a caretaker, the outgoing Commission is not taking new initiatives, and the future 20 Commissioners – to be chosen by newly-elected EC President Romano Prodi, from Italy- will not start working before September.

Things could be delayed even further – last week, members of the European Parliament warned Prodi they would not hesitate to delay clearing appointments to his new Commission if nominees did not meet high standards.

Whenever it happens, enlargement to the East will severely test the EU’s capacity for reform – already, the move is causing unease among some member- states who fear they may end up footing the bill for the poorer newcomers in terms of contributions to the EU budget.

But analysts say it is an economic price the richer EU countries will have to pay if they want to press ahead with the sweeping political and strategic aim of courting former communist states.

As it is, aid experts warn that the bill for humanitarian aid and reconstruction in the Balkans is rising faster than expected.

At the International Monetary Fund’s Washington meeting in late April, EU officials said the cost of economic reconstruction in the Balkans could reach 30 billion dollars. But those estimates were based on 650,000 Albanian Kosovar refugees – their numbers have since burgeoned to around 950,000.

“In light of what has now happened, the bill in Kosovo, let alone the rest of the Former Republic of Yugoslavia, has gone up ten if not twenty-fold,” Steve Allen, UNICEF’s special representative in former Yugoslavia, said last week. He added that support from Western powers might have to be sustained for years.

There is backing for that view. According to the latest Economic Survey released at the end of April by the United Nations Economic Commission for Europe (UN-ECE), western Europe will have to devote substantial financial resources in the region, while having to cope with an expected slowdown in the EU’s economic growth in 1999.

The UN body expects the economic situation in Europe to worsen if the conflict drags on.

“A prolonged war would put upward pressures on government defence spending, which in view of the budget deficit targets………would need to be offset by savings elsewhere or by higher taxes,” warned the survey.

The head of the UN agency, Yves Berthelot, said the conflict had dealt a “dramatic blow” to many countries that are in transition from planned to market economies.

The survey says the economic performance of these countries in 1999 is expected to be, on average, considerably worse than in 1998.

The negative economic impact of the war will be greatest for the countries of south-east Europe, most of whom were already in a precarious economic condition before the war started, according to the UN body.

Several countries in the Balkans – particularly Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Romania, The former Yugoslav Republic of Macedonia – have lost important markets as well as traditional suppliers in Yugoslavia.

In addition, aerial bombings by the North Atlantic Treaty Organisation (NATO) have severely hit transport links to and from south-eastern Europe.

“Costly efforts will be necessary,” an EU spokesperson said last week in Brussels, adding that they will add up to billions of dollars. Most analysts agree that rebuilding Kosovo will in any case take at least a decade.

During negotiations at Rambouillet in France in February, the EU had pledged a reconstruction package for Kosovo estimated at 500 million euros (535 million dollars) if a peace deal were reached with Serbian President Slobodan Milosevic.

And on May 6, donor nations and international financial agencies promised to help Macedonia with 252 million dollars in the following months, saying they would top it up with a further 400 million dollars later in the year.

Other pledges are expected to be made later this month for Albania and Bosnia.

Paul Rayment, head of the UN-ECE’s economic analysis wing, said the cost of a reconstruction package for Yugoslavia and its neighbours would depend on how long the conflict drags on.

Rayment added that in comparison to the World Bank’s Bosnia-reconstruction plan of five billion dollars over three years, “I guess you would start talking for Yugoslavia of at least five times that.”