The CEPS Plan for the Balkans, Three Years On

The CEPS Plan for the Balkans, Three Years On

In April/May 1999, in the context of the twin crises of the Kosovo campaign and the resignation of the entire European commission, CEPS put forward an innovative plan for the European integration of the Balkans, later refined in the Ljubljana Declaration of South-East European thinktanks in July 1999 (which was published in issue 2 of the Europa South-East Monitor).

Three years on from these events, EU policy appears to have settled down via the Stabilisation and Association Process, the CARDS regime, the watchful gaze of Javier Solana’s Policy Unit, and indeed the Stability Pact. In the light of what we wrote in 1999, it is an appropriate moment to assess what has been done, what is still on the policy agenda, and what proposals are off the policy agenda.

Some of our proposals have been adopted: the lowering of tariff barriers for goods from the Balkans exported to the EU, a specialised agency for reconstruction spending, the incorporation of the Balkans into the EU’s developing security competences. Some proposals are still on the way, such as the other pieces of the free trade jigsaw, the adoption of the acquis by the countries of the region, and the reform of the banking institutions. And some are not yet on the agenda of the international community, such as our proposal for special foundations for education and democracy in the region, and our suggestion that there should be some kind of partial membership of the EU on offer.

New Associate Membership:We proposed that there should be a new form of Associate Membership of the EU, based on the policies outlined below. There is indeed now a new type of association with the EU, the Stabilisation and Association Agreement, already signed with Croatia and Macedonia; however the content is not as vigorous as we proposed.

Market regime:We proposed free trade within the region as soon as possible. A series of bilateral free trade agreements within the region should be in place by the end of 2002, under the auspices of the Stability Pact.

We proposed zero tariffs on EU imports from the region as soon as possible. The EU implemented zero tariffs on almost all imports from the region in late 2000, though a recent CEPS study finds that this may not be as effective as hoped.

We proposed a reduction to zero over a few years of the region’s imports from the EU. Under the Stabilisation and Association Agreements, the countries of the region are expected to lower their tariffs on EU goods to zero eventually, though over a much longer time scale than we had in mind.

We proposed moving as quickly as possible to a customs union (à la Turkey) of the countries of the region with the EU, with compensation for loss of tariff revenue from the EU budget. The EU has not moved on this one, though the recent CEPS study reinforces the case for such a policy.

We proposed that the countries of the region be invited to align their policies with the EU acquis. This is now part of the Stabilisation and Association Process.

Money:We proposed banking reform throughout the region. This has started, but has been more successful in some countries than in others.

We proposed that those countries who wanted to should be encouraged to adopt the Euro unilaterally as their currency. Although Kosovo and Montenegro have in fact done so, such moves have been heavily resisted so far by the European institutions.

Reconstruction and investment:We proposed a specific South-East European body for coordinating infrastructure projects and economic development. In fact this role has been taken on at a regional level with some success by the donors themselves, acting through (or perhaps in parallel with) Table II of the Stability Pact. On the level of individ ual states, the European Agency for reconstruction has noticeably streamlined aid delivery in Kosovo, Montenegro, Serbia and Macedonia.

Civil Society:We proposed two specific foundations should be endowed with specific responsibilities for giving grants in the areas of democracy and education. In fact this responsibility was given to Table I of the Stability Pact, and by all accounts this has not been one of the Pact’s success stories. Articles from the OECD and the European Training Foundation on the development of education in the region have appeared in past issues of the Europa South-East Monitor.

Security (civilian):We proposed that the EU should gradually get stuck into direct assistance with both policing and customs in the region. The EU has indeed been developing its capacities in this area, to the point of taking over the international police mission in Bosnia, but is not yet at the stage of vigorous engagement that we suggested (and which has indeed been requested by at leaast two Balkan governments).

We proposed that the EU should hold out the prospect of visa-free travel for all the countries of the region. This issue has got terribly confused with the issues of Schengen implementation for the applicant states, and seems likely to stay that way until the institutions have settled down after the coming wave of EU enlargement.

Security (military):We proposed that the developing European capacities for security and defence should be progressively implemented. This has pretty much come to pass, with recent general acceptance that the EU will probably take on the military peace-keeping mission in Macedonia in 2002 and quite probably will do the same in Bosnia in the next few years.

We proposed the development of a new security structure for South-Eastern Europe. We in CEPS are still working on this concept.

Institutional integration/partial EU membership:We proposed a half-way point between associate status and full EU membership, for those countries which showed willingness to reform and adopt the acquis but which are not yet ready to assume the burdens of full membership, and in particular not yet fully satisfying the Copenhagen criteria; the benefits of partial membership could include the right of employment for the country’s citizens in EU institutions, non-voting membership in the European parliament, and participation as observers in EU council meetings as well as participation in the increasing range of EU programmes. This concept is little further advanced as yet, as the EU has concentrated on enlargement from 15 members to 25; once that has happened, though, the question will not go away, and indeed may ultimately prove imperative not so much for the Balkan states as for Turkey.

Management capacity:We proposed that both Council and Commission should ensure better management of their considerable resources in the Balkans, including through setting up specialised agencies for aid delivery. At the time the European Commission was operating in a caretaker capacity and the office of the EU’s High Representative for the CFSP had yet to be filled; Javier Solana was still Secretary-General of NATO.

In the event, the combination of Patten and Solana has brought a considerable improvement. Nobody in the summer of 1999 had anticipated just how influential a body Solana’s Policy Unit would become in the next few months, and the European Agency for Reconstruction was by all accounts a far more efficient delivery mechanism for EU aid than previous arrangements. There is still room for improvement though; the Council of Ministers per se is represented only by the bilateral missions representing the presidency of the moment in the Balkans (apart from Alain Le Roy in Macedonia) and there is consequently confusion in the region about the role of the Commission’s representations. Also the role of the Stability Pact is still not cle ar.

Conclusion:On balance then, perhaps a third of our 1999 proposals have been taken fully on board by the international community, and another third are at least on the policy agenda. Most importantly, the context has changed; the Balkan states are no longer seen as embarrassing outsiders, but -as we advocated in our 1999 papers – as future members of the European club. The seriousness of EU policies prevented Milosevic from making a move against Miontenegro in 1999; the prospect of European integration was probably the crucial factor which discouraged the government of Albania from getting involved in the 2001 Macedonia crisis. CEPS and its partners will continue to analyse the situation and to recommend appropriate, but also ambitious, EU responses.

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