EU Ponders New Aid Deal for Balkans

Brussels' recent decision to postpone Croatia's accession negotiations and the growing likelihood of a positive feasibility study for Serbia and Montenegro have boosted speculation that all five western Balkan states may join the European Union at the same time.

Olli Rehn, European Commissioner for Enlargement, has said that by mid-April Brussels will give its response to the feasibility study for Belgrade. If positive, it will open the door for negotiations to start on a Stabilisation and Association Agreement, SAA, which is the first important step towards EU membership.

However, diplomats and experts in Brussels warn against the likelihood of a scenario in which Albania, Bosnia and Hercegovina, Serbia and Montenegro, Croatia and Macedonia in fact join Europe simultaneously.

There is an emerging consensus in Brussels that all five should not accede as a group. Diplomats say the policy of taking an individual approach to each state - and the need for all of them to meet the conditions for EU membership, formulated in 1995 by the former enlargement commissioner, Hans Van den Broek – rule it out.

"The rate of progress towards the EU will depend on the performance of the countries themselves [in terms of] reforms," the communique of the 2003 Thessaloniki summit read. Many in Brussels reiterate that this approach has not changed.

Rehn has also confirmed that granting candidate status for all Balkan countries is not even on the EU agenda at the moment.

"My goal for my mandate until 2009 is to ensure Bulgaria and Romania enter the EU fully prepared for membership, that negotiations with Croatia and Turkey get on the right track, [and] that we get started at least with [Macedonia]too," he told IWPR.

Making no direct mention of Serbia, Bosnia or Albania, he said his other goals were to see reconciliation in divided Cyprus "and that the pre-accession strategy for the western Balkans is consolidated and moved forward".

Gerald Knaus, of the European Stability Initiative, ESI, a think-tank, says not too much should be read into the economic demands for membership, as political criteria usually prevailed in the past.

Romania, Bulgaria and Turkey obtained candidate status in 1999 at the Helsinki summit, though none fulfilled the economic criteria, he said.

"Ultimately, the move from potential to full candidate status is a political decision," Knaus told IWPR.

The basic precondition for candidate status is an expressed willingness on the part of the aspirant country in the form of a membership application. But so far, only Croatia and Macedonia have taken even that preliminary step.

EU preconditions also require the country to be a sovereign democracy with an elected government and clearly defined borders. It must be well advanced on the path to an SAA and have no significant unresolved problems, such as insufficient cooperation with the Hague war crimes tribunal, ICTY.

Diplomats in Brussels have reminded governments in South-East Europe to show serious commitment to these conditions. But, experts say they pose a difficult challenge. "Unfortunately, these are formidable obstacles for the western Balkans," said Knaus.

"Candidate status would require a Bosnia without an Office of the High Representative, OHR, but at this moment it looks likely there will be another OHR even after Lord Ashdown retires," he continued. "This means that for another two years, a Bosnian EU application would not be taken seriously by Brussels."

Bosnia and Hercegovina is not the only state with serious issues. The EU wants Serbia and Montenegro to improve cooperation with the ICTY and seeks reassurance that the issue of Kosovo, where the local Albanian majority wants independence, can be resolved in the near future. There is uncertainly also over the future survival of the union between Serbia and Montenegro.

Albania has no such problems over the ICTY or borders. But Brussels wants to see a strong and visible cross-party consensus emerge in Tirana behind an EU application. It also wants signs of willingness to undertake the reforms that this requires.

Therefore, many observers expect that in 2006, only Macedonia and Croatia from the region are likely to obtain candidate status.

"This makes it all the more important to ensure that the gap between potential candidates and candidates does not grow wider as a result of the EU's own policies," said Knaus, referring to the substantial EU accession funds that only candidate countries can access.

One EU diplomatic source told IWPR that the gap between the amount available to candidate countries and to those aspiring to such status "is not an ideal situation". He added, "Many countries are aware that the logic is problematic. But, that is the reality."

The ESI, therefore, has proposed that Brussels should allow both groups - potential candidates and actual candidates - to access the EU pre-accession funds that have enabled the 10 Eastern and Central European states that joined the union last year to successfully finalise the transition process.

The funds available to Romania, Bulgaria, Turkey and the Balkans are designated IPA, which comes from a French acronym, meaning "pre-accession instrument".

Knaus says the proposal to share IPA funds more broadly has been widely discussed and a number of EU member states have expressed sympathy, "There is a growing awareness that it makes little sense to state that all the western Balkan states are potential candidates, and then to delay the crucial institution- and economy-building that the EU has extended so successfully to candidate countries in recent years."

Rehn himself told the European parliament in late January that "a key innovation of the IPA is that it will cover potential candidates as well as candidate countries" – though he did not specify whether this meant equal access to funds.

The EU diplomatic source told IWPR that the ESI initiative was "being seriously taken into consideration" in Brussels, out of a concern that a partial distribution of funds will only widen regional economic inequalities.

"We are aware this could send a bad signal," the diplomat said, "therefore we are contemplating allowing all five countries access to the funds."

The amount of money potentially available to states in the region is substantial. Before his mandate as president of the European Commission expired last year, Romano Prodi prepared the EU draft budget for 2007-2013, which reportedly envisaged setting aside 14 billion euro for the Balkans.

The new EC president, Jose Manuel Barosso, is still working on the document, which should be adopted next year. The European parliament will have the final say in its shape and allocation.

While Knaus says assistance to the region as a whole is vital if Brussels is not to unwittingly create "serious economic consequences", the initiative does not lie solely with the EU, he adds.

Governments in the region need to work out national development plans that can effectively make use of the pre-accession funds, which few have done in the past.

The debate over how to handle aid to the western Balkans comes at a crucial time. In 2006, Austria and then Finland will be presidents of the EU and Vienna - for historic and geographical reasons - takes an especially close interest in the region.

Moreover, it will be up to Austria to prepare the terrain for the next EU summit, in Helsinki, which may mark a new European era for the entire Western Balkans.

Svetlana Jovanovska is Brussels correspondent for Macedonian daily Dnevnik.