Serbia Towards EU – Why?

June 29, 2017

Ana Brnabic, Serbia’s prime minister designate, says her future government’s goal is membership in the EU along with modernization of the troubled Balkan country. Brnabic told Serbian lawmakers on Wednesday [28th Jun.2017] that the government will lead a “balanced” foreign policy, seeking good relations with Russia, China and the US. Serbia’s parliament is expected to vote her government into office later this week.

 Yesterday I gave an interview to Sputnik UK radionews about this Serbia topic and here are my core comments:

 

Serbia’s EU process?

To join EU is a long process. There is over 30 chapters to negotiate and some 80 000 pages EU regulations should be applied Serbia’s legislation. However I think that it is good idea to continue EU process but not only to fill EU’s needs but especially Serbia’s internal needs for example how EU could help Serbia’s modernization activities.

 

Balanced foreign policy?

Balanced foreign policy from my perspective is an ambivalent expression – it can be only short term goal while EU membership is long term aim/utopia. Even during membership process there might be needs to take [biased] positions. And if one is EU memberstate so you are EU’s side. For example Greece, Hungary and Finland have traditionel good relations with Russia but all are implementing sanctionpolicy against Russia probably due common pressure from EU. So in my opinion Serbia’s balanced foreign policy does not live long during membership process.

 

According to a poll carried out by the Serbian European Integration Office at the end of last year, only 47% were in favour of EU membership, how much public appetite is there for joining the EU?

In my opinion this apetite will go more down in future. People might think that ok, we recognize Kosovo, door to EU opens and there will be free trade and movement etc soon. As I mentioned chapters and regulations so that’s heavy and long job which can take decade(s). Many Serbs might start think if joining to EU is worth of time, money and bureaucrazy it demands. Besides there is also other alternatives like for example ”third way”.

 

Third way?

In my opinion the main benefits of EU membership can be achieved without being EU member. With ”third way” I mean

  • Non-aligned foreign policy
  • Free trade agreements with EU and others
  • Being part of customs union with EU but outside the framework of the EU treaties and institutes

So my recommendation in short: Serbia should join EU economically but not politically.

Serbias options, EU, EAU, 3rd way

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EU in Turmoil and not only in Financial One

July 8, 2012

The two dominating trends among EU leaders are to cut losses of players in virtual economy at the expense of taxpayers and to guide EU towards strict federation at the expense of democracy.

(Ari Rusila)

The financial crisis has been in headlines already few years. Despite continuous emergency meetings between EU and especially Eurozone countries no light can be seen for better future. Despite more and more ”effective” measures the markets are not satisfied more than few hours or days. In my opinion it is time finally admit that selected strategy to save euro has been disaster – not maybe to banks and speculators but to ordinary citizens at least. It is time to make alternative visions not only for Euro but for whole EU too, time to whistle game out, collect losses and start new game in Day after Euro/EU context.

Today strategic decisions are hard to agree due 27 different circumstances in 27 member-states (and more to come with enlargement). Also “European Monetary Union” is dead as economies inside Eurozone differ too much. It would seem nowadays that the Eurozone leaders have decided to place the region under Martial law. Old principles about democracy, subsidiarity etc are forgotten.

From my viewpoint intervene again and again into something that is not going to work in the long run is the wrong medicine. The two dominating trends among EU leaders are to cut losses of players in virtual economy at the expense of taxpayers and to guide EU towards strict federation at the expense of democracy. Change to this is needed for saving 99 % of people instead saving profits of the rest one per cent.

Grexit best for all

Eurozone countries have tried solve financial crisis in Greece with different measures – such as bailout packets – already few years with about € 320 billion. However this amazing solidarity of Eurozone has not helped average Greek. Instead foreign banks and financial speculators have been beneficiaries of the aid money. The still ruling government in Greece has also decided to invest aid money to new submarines and other military equipments instead the needs of their citizens. Btw as Nato country why Greece does not apply same strategy like Iceland who has outsourced e.g their military air-control to other member-states. Anyway on the bottom line Greece had public debts on 2009 some €300 bn and after aid packets it now has €420 bn . GNP is decreasing so debt problem is coming more difficult to solve every day. Same time the living conditions of average citizens has dropped dramatically and extra loans have not made ground for new entrepreneurship or new export business or helped still existing companies. When unemployment is rising the share of debt compared to GNP doing the same. (See e.g. ”Common Appeal for the Rescue of the Peoples of Europe”  )

Euro-zone, European Central Bank and IMF seem to have only one ultra-liberalist strategy to solve problem – cutting salary, public services and social benefits from ordinary citizens and saving some financial institutions, funds and speculators from bigger losses. But the problem will not be solved with this strategy and the reason is that these financial institutions and speculators have created a virtual financial world ( derivative markets, futures, hedge-funds …) which value is about ten times more than the real economy. I am not an economist but anyway how could this equation be solved with selected strategy.

Grexit now would be best for all. The new currency should be introduced at a one-for-one rate with the euro. But it will soon depreciate by something like 30-50% giving a boost to Greece’s international competitiveness. The government should renominate its debt in the new national currency and make clear its intention to renegotiate the terms of this debt.

Different analysts estimate that the overall debt load continues to grow faster than the economy, then large-scale debt restructuring becomes inevitable. Greece has been in a state of slow motion economic collapse on the scale of past economic collapses such as that of Argentina but so far without the ability to default, devalue and inflate.  It is to be noted that the case of Argentina shows one successful example how to copy in a similar situation.

Strategic miscalculation

“The euro should now be recognized as an experiment that failed”

(Martin Feldstein, an American economist in 2012)

Many economists, mostly from outside Europe, condemned the design of the Euro currency system from the beginning and have since been advocating that Greece (and the other debtor nations) unilaterally leave the Eurozone, which would allow Greece to withdraw simultaneously from the Eurozone and reintroduce its national currency the drachma at a debased rate. However the political will, or fear, has kept Eurozone leaders in their expired visions – current political leaders might be affraid to apply Modern Monetary Theory or post-Keynesian views. The European bailouts are largely about shifting exposure from banks and others, who otherwise are lined up for losses on the sovereign debt they recklessly bought, onto European taxpayers. However I believe that many of them will be either be replaced or finally they have courage to take new appraoach.

There are clear advantages to ridding Europe of the euro. Countries now suffering with debt could return to their national currencies, devalue, and regain competitiveness more easily. They wouldn’t have the same financial safety-net – at Eurozone level – but their freedom would also allow them to chart their own course. The poor outsiders could negotiate debt restructurings and a more fair division of losses would result and same time the rich outsiders could probably put their economies on a stronger growth path by using their money for supporting investments in real economy of their country instead supporting saving efforts of speculator money in virtual economy.

One viewpoint is that the debt should be characterized as odious debt. This definition is famous earlier from cases in South America and Africa uder military dictatorship. For example the Greek documentary Debtocracy examines whether the recent Siemens scandal and uncommercial ECB loans which were conditional on the purchase of military aircraft and submarines are evidence that the loans amount to odious debt and that an audit would result in invalidation of a large amount of the debt. (See more e.g. Liège based NGO Committee for the Abolition of the Third World Debt /CADTM)

EU Scenario: Dissolution, Federation, Confederation, EU Lite …

A lot of English people like the economic advantages, but are happy to keep the frogs and krauts and spics and eye-ties at a healthy distance.”

(One view from U.K. in web)

Now Eurozone as well EU as construction is on the verge of tumbling down. EU bureaucracy is implementing their only truth by trying to guide EU towards federation. Earlier agreements in Maastricht, Barcelona and Lisbon were only soft exercises. Now financial crisis has enabled stronger methods. In March 2011 a new reform of the Stability and Growth Pact was initiated, which provides for automatic penalties and obligations for states in case of breaches of either the deficit or the debt rules. By the end of the year, Germany, France and some other smaller EU countries went a step further and vowed to create a fiscal union across the Eurozone with strict and enforceable fiscal rules and automatic penalties embedded in the EU treaties. (More e.g. Wikipedia).

With the “golden rule” the Stability and Growth Pact, the political choices of national parliaments are limited. Besides killing the democracy the Pact will kill growth too so putting people in misery and dismay. The Pact is new tool for the plundering of the public services and the destruction of social rights in all EU countries.

The best scenario from my point of view could be some kind of EU Lite version. A bit of similar ”privileged partnership” agreement than planed with Turkey. EU Lite should be build simply to EU’s early basics as economical cooperation area including a customs union, the EU tariff band, competition etc linked to idea of the Common Market. EU Lite could also apply a structure of Confederation. Also some kind of fiscal confederation can be shaped. EU Lite could be described also as a political union and there could be some forum for national parliamentarians and party leaders. Federalist intentions, the EU puppet parliament and the most of EU bureaucracy should from my point of view put in litter basket together with high-flown statements and other nonsense.

The investors face normally e.g Interest rate risk, credit (i.e default) risk, volatility risk, structure risk, counter-party credit risk, prepayment risk, general market risk, liquidity risk, extension risk, transparency risk, political risk, and currency risk and now also with Euro a dissolution risk. As said this is normal and because of those risks also the profits are huge. But the basic principle in is that with investments and not to speak even speculations there is two sides – wins and losses. In my opinion the loss should no more be paid by taxpayers.

Many – still non-member – Balkan countries, Turkey and one disputed region (Kosovo) have some vision about EU association. While considering this in my opinion three aspects should be highlighted:

Why to join? Due the needs of people or due the needs of Brussels or elite?

When related to time-line? Association process is long and circumstances are changing, after EU/Eurozone crisis who know what kind of EU if any still exists, same time other regional and global power-centers are rising and options should be open.

Where? Now it is open question if country is joining in future to strict federation with martial law, to some sub-category of loose federation, confederation, open discussion forum or free trade zone only.

After this the forth question – how – is the easy one. (More this with example of Serbia in Serbia’s EU association is not a Must )

My bottom line

With today’s strategy there is a risk that the combination of economic insecurity and political paralysis has been recipe for an increase in extremism and xenophobia. It is slow motion death spiral of economic collapse. That is the base to my view that people should be the first priority and not virtual economy, fiscal system, euro or even EU.

I would like to see following principles – related to current Eurozone crisis – to came again to agenda:

  • People first system after
  • Real economy instead of virtual economy
  • Investor risk instead of taxpayers risk

As interests even inside Eurozone differ these new principles in my opinion have best change if implemented at national level. So e.g each country could nationalize their bankrupting banks, each country could start implement Toby’n (or transaction) tax by national decisions. And when different countries find common interests so new formations, forums and cooperation can be established.


Mladic in Hague, Serbia towards EU, reopening Srebrenica

June 2, 2011

From historical perspective the Mladic’n arrest and the Hague trial serves as formation of a more comprehensive picture of events in the Balkans in the 90’s after the procecutor and the defense have made their case. Issues related to the underlying policy objectives of Srebrenica, events before Srebrenica and the number and the PR game around Srebrenica. Realization of the right however is only theatrical minor point for the EU and for the current Serbian government as both see it only as a formal step towards Serbia’s EU membership.

Serbia’s current government is hoping that Mladic’s arrest will clear the way towards EU membership. In the press conference of Mladic’s arrest President Tadic said “I believe that the doors for Serbia to joining the EU are open”. I disagree, there is lot of issues waiting on the table, minor problems such as accepting Kosovo licence plates and finally (after few years of negotiations) recognition of Kosovo’s independence too. E.g. EU Parliament Rapporteur for Kosovo Ulrike Lunacek said it clearly that extradition of Ratko Mladic to The Hague is insufficient for Serbia to join EU and that Serbia must do a whole lot more if it wants to join EU. “Serbia must show that it is ready to expand relations with an independent Kosovo,” Lunacek said. (Source: Dnevnik ) The technical association chapters need some work and remains to see what kind of EU there is existing when membership is on the door. It also remains to see how long negotiations with EU will continue as after elections the new government can whistle the game over.

Since Serbia’s EU application has its position improved, particularly related with energy issues. When the EU favored Nabucco is practically already dead project e.g. after events on the Arab Street (pipe has political support, but no gas available) and when the Italians and now also the French and German companies are backing Russia’s South Stream are Serbia’s changes to become an energyhub growing. Russia but also Turkey have been activated to wide their economic cooperation with Serbia and for example, last autumn came into force a free trade agreement with Turkey.

My opinion of the membership negotiations has remained relatively the same as follows:

In my previous articles, still and now even more than before I have a view that Serbia should think if joining to EU is worth of time, money and bureaucracy it demands, could the main benefits of EU membership be achieved via “third way”. Despite this I think that at this moment it is good idea to continue EU process but not only to fulfill EU needs but especially the needs of the beneficiaries aka Serbs not EU elite in Brussels.

More about Serbia’s EU perspective in my earlier article: Serbia’s EU association is not a Must

In my opinion more that fast track to EU the Mladic’s trial in Hague will be a fast track to discover what really happened in Srebrenica 1995 and before that. Todays picture about Srebrenica is still heavily manipulated. To me its clear that thousands of Muslims were killed in Srebrenica once this place fell to Bosnian Serbian forces as well that some of them were innocent civilians. It is clear too that thousand(s) Serbs were butchered around Srebrenica during Bosnian War 1992-95 e.g. by the 3rd Corps 7th Muslim Mountain Brigade lead by Bosnian Muslim leader of Srebrenica forces Naser Oric. To the Brigade mentioned were subordinated foreign Muslim fighters, also known as mujahedeen, who came from Islamic countries and it operated from “demilitarized safe area of Srebrenica”. One possible scenario is that when the Bosnian Serb Army responded to this terror and attrocies the remaining fighters attempted to escape towards Tuzla, 38 miles to the north. Many were killed while fighting their way through; and many others were taken prisoner and executed by the Serb troops.

One explanation to the cruelty in Srebrenica can be found from the testimony of French General Philippe Morillon, the UNPROFOR commander who first called international attention to the Srebrenica enclave, at The Hague Tribunal on February 12, 2004. He testified that the Muslim commander in Srebrenica, Naser Oric, “engaged in attacks during Orthodox (Christian) holidays and destroyed villages, massacring all the inhabitants. This created a degree of hatred that was quite extraordinary in the region.”

More in my earlier article Srebrenica again – Hoax or Massacre? .

The western mainstream media has demonized Serbs and their action in Bosnia and later also in Kosovo. The attrocies implemented by others have widely ignored. At the start of the 1992-95 Bosnia war, Muslims and Croats were allies against the Bosnian Serb forces, but they fought each other briefly when Croat forces tried to create a separate Croat statelet in northeastern Bosnia. Only a couple days ago it was reported thatBosnia’s warcrimes court has jailed a Croat ex-soldier for 15 years for the killing of more than 60 Muslim civilians during a brief 1993-94 war between Bosnian Muslims and Croats. Miroslav Anic received a reduced sentence under a plea bargain after pleading guilty to all charges. He was convicted of taking part in a series of attacks by a Croat militia on Bosnian Muslim villages from June to October 1993, it said. Anic had served as a member of the special unit Maturice, operating within the Croat Defence Council (HVO) under the command of Ivica Rajic who was sentenced in 2006 to 12 years in prison by the Hague-based United Nations war crimes tribunal. (Source: Trust.org/Reuters)

Mladic arrest and theatre in Hague will bring Srebrenica again front of a stage and this will have its effect in already fragmented and fragile Bosnia-Herzegovina. Probably confrontation between three ethic groups will increase and this could lead to the final dissolution of BiH. Serbia is keen to secure EU candidate status and Mladic’s arrest may be one step forwards for this aim while same time the trial of Mladic may be one step backwards in Bosnia-Herzegovina for its EU membership aspiration.

¤ ¤ ¤ ¤ ¤

P.S.

Finally a skeptical description – by Timothy Bancroft-Hinchey/Pravda – how EU makes Serbia blessed:

And congratulations, Serbia. Now you can join the European Union. Wonderful! Stand back and watch your industry destroyed as what you export is assimilated by German industries, watch your agriculture decimated as you are paid not to produce and your production goes to France before you are left with barren fields, stand back and watch the EU label Slivovica illegal because some idiot in Brussels doesn’t like it. Stand back and watch your unemployment rate skyrocket, watch a clique of elitists whisked off to cushy jobs in Brussels, watch your prices treble and your salaries stagnate and watch your customs destroyed as you become assimilated first by the EU and then by NATO. You will have to pay for it, you know. The people, not the leaders, of course… Nobody will ask you if you want to join NATO but you will be expected to buy its equipment and participate in its wars.


Serbia’s EU association is not a Must

April 25, 2011

“If the Balkans find that too many obstacles are strewn about the road to Brussels, they may well be tempted to set out on the shorter road to Istanbul”

(Misha Glenny, Balkan political analyst)

Practically the Eastern EU enlargement for the moment is stopped. Croatia’s membership is a bit delayed, Turkey’s EU bid is dead as continent simply has no intention of ever incorporating 70 million Muslims and the rest – such as Serbia – are still more or less in association process. Tens of thousands demonstrators demanded early elections in Serbia at a protest rally 16th April 2011, blaming Serbia’s pro-Western government for a deepening economic crisis and alleged corruption. The government has rejected the demand for early elections, saying they will be held after Serbia wins candidacy for EU membership in the autumn. European Commission (EC) unanimously agrees that early parliamentary elections in Serbia should not be called which position in my opinion gives a strange picture about EU’s view towards democracy – really a view that democratic elections would harm stability and EU-accession.


From day one of membership at the latest, candidates are expected to be able to implement and enforce the “acquis communautaire”, i.e. the detailed laws and rules adopted on the basis of the EU’s founding treaties and make EU law part of their own national legislation. The most positive part of the European Commission progress report states that Serbia is well advanced in the sector of industry, small and medium enterprises, agriculture and food safety and that good progress has been made in the fight against drugs and organised crime.

The European Parliament ratified the Stabilisation and Association Agreement (SAA) between the EU and Serbia in Strasbourg on 19. January 2011. The Questionnaire, which covers all elements of Serbia’s future negotiations with the EU, was delivered to Serbia by the EC on 24 November 2010 and answers were delivered on 31. January 2011. Responses to 2,483 questions, divided in six annexes and 33 chapters, were completed within the record 45 days and are divided in more than 37 volumes and weigh ten kilograms. Third expert mission of the European Commission (EC) analysing responses to the EC Questionnaire in order to prepare an opinion on Serbia’s EU membership, finalized its work on 18 March.

Serbia has implemented significant structural reforms in many parts of its economy over the past decade but more is needed. The main components of further reforms are: judicial reforms, the continuous fight against organised crime and corruption, the improvement of our political system, property right issues and reforming Serbia’s regulatory agencies and removing bureaucratic bottlenecks. It remains to see if there is enough political will for these reforms or even for membership – especially after Serbia’s next elections, due by spring 2012. Most sectors of the economy are open to foreign investment. Reforms have improved the investment environment is improved by reforms, but e.g. corruption discourage foreign investments (Serbia ranks 83rd out of 180 countries in Transparency International’s Corruption Perceptions Index for 2009).

More about Serbia’s EU integration can be found from The EU Integration Office of Serbian Government.

Serbia’s road towards EU membership has two obstacles – status of Kosovo and cooperation with Hague tribunal (ICTY). Probably the later problem will be solved with Serbia’s own efforts before association process is in its final stage. Serbia’s vice-PM Djelic said in his interview (Euractiv) on March 10. 2011, that

today in Serbia all major criminal figures are either under arrest or on the run. In the fight against corruption we have had high-level arrests of people who used to run our railway system, our road system, teachers, professors, surgeons, public officials. It is still not very pleasant but it is a demonstration that there has been a critical mass within the administration and the people to fight these phenomena.

The question of Kosovo is politically harder as there is a need to find a common compromise with Kosovo Albanians and this question can end or at least freeze Serbia’s EU association for long time, maybe so long that when solved there may not be EU at all or it is completely different than today.

New elements in new Kosovo talks

Talks between Serbia and its separatist province Kosovo started finally in Brussels on March 2011. The agenda concentrated to technical questions however everything is about politics i.e about solving Kosovo’s status. The status question would solve problems regarding north Kosovo, which is currently under “dual sovereignty” (officially part of Kosovo, which officially is UN protectorate and under sovereignty of Serbia and practically totally integrated to Serbia).

The new situation has forced also International Crisis Group (ICG) to admit the defeat of its Kosovo policy recommendations during last decade. ICG has informally as informal extension of U.S. State Department however pretending to be neutral mediator and think tank. During earlier “status” negotiations 2005 it endorsed preconditions before talks and afterwards supported sc Ahtisaari plan. Now in their new analysis Kosovo and Serbia after the ICJ Opinion ICG sees Kosovo’s partitition with land swap one of possible solutions during coming talks between Belgrad and Pristina. The (dead) Ahtisaari plan and expanded autonomy for North Kosovo are the other two conceivable solutions according ICG.

Last decades have showed how it is possible to draw new borders in Europe, the issue is only the method; e.g. while the Czechs and the Slovaks negotiated by themselves the terms of separation nobody objected to the splitting of Czechoslovakia. In Kosovo there has been implemented only forced temporary solutions outsiders and therefore the outcome is a frozen conflict. The International Crisis Group (ICG) advised the Kosovo Albanian authorities to consider granting autonomy for the northern Kosovo. In exchange they would get “Serbia’s recognition of Kosovo statehood”. ICG concludes that Serbia and Kosovo have equal sovereignty in north Kosovo and should work to resolve what the ICG calls “the Balkans’ most serious territorial dispute.”. Many other even more sustainable solutions are available such as splitting of Kosovo to independent Albanian part and to Serbia integrated Northern part, with or without land swaps. Also a sc Hong Kong model is possible; such a compromise – with the principle of ‘one country, two systems’ – would guarantee Kosovo economic and political autonomy without endangering Serbia’s territorial integrity. It is as well possible to create national union between Albanian part of Kosovo and Albania. In my opinion all these alternatives could be better for local parties than to continue the situation as today. Economically, Serbia is probably better off without Kosovo.

Belgrade’s chief negotiator, Borko Stefanovic, said in an interview published April 23, 2011 in the daily newspaper “Blic” that “Serbia’s negotiating team is not resisting the possibility of talking about the division of Kosovo.” Belgrade has hinted in the past that it could support a division, with Kosovo’s Serbian-majority north being attached to Serbia. (Source: RFERL )

The trial against two former leaders of the Kosovo Liberation Army, KLA, who are charged with war crimes committed against civilians in Albania during the conflict in Kosovo, has gotten underway in Pristina. The victims of the crimes included in the indictment are Albanians whom the KLA commanders accused of collaborating with Serbian authorities, and individuals whose political views differed from those of KLA. The trial against the two men begins several months after Dick Marty, Special Rapporteur of the Council of Europe, released a report in December alleging that human organs were harvested from detainees during and after the conflict in Kosovo, with the harvesting run by the KLA and allegedly taking place in Albania. Politically the key importance in Marty report is an allegation that a criminal network is linked to Kosovo’s Prime Minister Hashim Thaci and that western intelligence services knew this link but were silent to stabilize the region. More in Balkaninsight and in my article Captured Pseudo-State Kosovo .

Serbia’s Foreign trade

The value of export amounted to EUR 7.4 billion, which was a 24.0% increase when compared to the same period in 2009, while the value of imports amounted to EUR 12.6 billion, which was a 9.7% increase relative to the same period in 2009. The deficit amounted to EUR 5.2 billion, which was a decrease of 5.7% in relation to the same period in 2009.

EXPORTS AND IMPORTS OF GOODS BY ECONOMIC ZONE, 2010.

Zone

Exports, in mlln. EUR

Imports, in mlln. EUR

Share (%) in the total

I-XII 2009

I-XII 2010

I-XII 2009

I-XII 2010

Exports

Imports

Total

5961,3

7393,4

11504,7

12621,9

100.0

100.0

EFTA

66,0

52,3

189,0

171,9

0.7

1.4

EU

3195,9

4235,3

6532,7

7068,7

57.3

56.0

CEEC

306,4

359,8

164,6

205,8

4.9

1.6

CIS

408,2

599,3

1665,6

1959,1

8.1

15.5

MEDA

1642,7

1880,0

1026,9

1174,2

25.4

9.3

(Source: SURVEY RS 4/2010)

For economical development sc Foreign Direct Investments (FDI) are important factor.According last statistics in terms of the country structure, investors from the European Union top the list, accounting for about 70% of the total FDI influx. The leading spot on the country list is held by Austria, followed by Greece, Norway, Germany, the Netherlands and Italy, while major investor countries also include Slovenia, France, Hungary, the Russian Federation and Luxembourg. The actual amount of investments from U.S. and Israel is significantly higher than the official figure due to their companies investing primarily through European affiliates. ( Source and more info from SIEPA )

Other directions – Turkey and Russia

“For many years, the perception has been that Turkey needs Europe more than Europe needs Turkey.  If Europe does not look hard at the dynamism of Turkish economic and foreign policy, it may miss the boat.”

(Misha Glenny, Balkans political analyst)

Serbia was under Ottoman empire hundreds of years and according Gallup polls only less than 20 % Serbs consider Turkey a friendly power. At the state level, the historic vision in Serbia of Turkey as an abusive occupier has little influence. Turkey has also been very active in Balkans during recent years; its trade with the Balkan countries increased to $17.7 billion in 2008 from about $3 billion in 2000. Turkey’s banks provided 85 percent of loans for building a highway through Serbia for Turkish transit of goods to the EU. In 2008, Turkish Airlines bought a 49 percent stake of Bosnia’s national carrier, BH Airlines, and has also expressed its interest in Jat Airways – the Serb national carrier – and other Turkish companies are keen to invest in shops, supermarket chains and hotels. Since January last year, Serbian exporters have been selling their products in Turkey free of customs duties. (Source: Turkey uses economic clout to gain Balkan foothold by Dusan Stojanovic)

On 16 October 2009 Turkish Foreign Minister Ahmet Davutoglu gave a presentation in Sarajevo, speech concludes with the promise that the golden age of the Balkans can be recaptured:

Like in the 16th century, which saw the rise of the Ottoman Balkans as the center of world politics, we will make the Balkans, the Caucasus and the Middle East, together with Turkey ,the center of world politics in the future. This is the objective of Turkish foreign policy, and we will achieve this. We will reintegrate the Balkan region, the Middle East and the Caucasus, based on the principle of regional and global peace ,for the future, not only for all of us but for all of humanity.

Increase trade relations, remove (visa) barriers to freedom of movement between people, privilege soft power, emphasize a common history … such have been the core principles of Turkish foreign policy, not only towards Syria and Iraq but also towards Georgia, Russia or Greece. Turkey and Serbia’s free trade agreement came into force on September 1 this year. The deal opens Serbia’s to Turkish investors and paves the way for visa-free travel for nationals of both countries.

However, many commentators in Serbia see this change of Turkish foreign policy as an alternative to EU membership because both Turkey and Serbia know they are still far from formally joining the union. (More Multikulti and the future of Turkish Balkan Policy by Gerald Knaus/ESI)

Suha Umar, who left his post as Turkish ambassador to Belgrade on September 10, 2010, concluded his period in Serbia as follows:

When I arrived in this country… relations between Serbia and Turkey were at their lowest level because of [Turkish support for] Kosovo’s independence but also because of the lack of common interests, some prejudice and a lot of manipulation from outside. We managed to overcome the obstacles. If we are after peace and stability, without Serbia truly seeking peace and stability, it won’t happen. If we are looking for trouble, without Serbia it is very difficult to create trouble. This is why Serbia is the key country and Turkey has realised this fact. (Source: BalkanInsight )

Russian Prime Minister Vladimir Putin visited in Balkans end of March 2011 emphasizing the bonds linking the two Orthodox Christian nations. The two countries’ ties go back to when Russia supported Serbia’s drive for independence from the Ottoman Empire in the 19th century. Putin’s visit took place on the eve of the 12th anniversary of the NATO bombing over Belgrade’s policy toward Kosovo reminding Serbia of its past differences with the West. A survey of 42 countries conducted in the summer of 2009 showed that Serbs had the fifth-most favorable opinion of Russia: Some 53 percent of respondents had a positive opinion of the country, while 61 percent expressed negative feelings toward the USA.

Putin delivered a message that Europe needs South Stream as part of its energy security because it can no longer rely on North Africa as a safe alternative. Serbia is a very critical part of the whole South Stream project. Beside energy policy there are 15 new agreements between Serbia and Russia being drafted at the moment including cooperation in science, technology and tourism. Politically Putin promised continued Russian support for Serbia over Kosovo. He pledged Russian investment and further cooperation in energy sector – e.g. development of ‘Lukoil’ petrol pumps net, new investments in energy system and electric power plants – in the power system, railway, infrastructure and agriculture. The two countries signed agreements on inter-governmental tourism, scientific and technical cooperation, and an international road service. A package for Serbian economy brought to Belgrade by Putin is estimated to be worth USD 10 billions. At the moment it is known that 3 billions are for the Army of Serbia. Also debts by the NIS to Serbian budget shall be settled (about EUR 1 billion). And finally, the enterprise ‘Southern Stream’ is going to be founded. In addition, Putin revealed that the Russian government is considering issuing an $800 million loan to Serbia for railway projects.

Recently after Putin’s visit the first military consultations between the Ministries of Defense of Serbia and Russia in Moscow, a bilateral military cooperation plan for 2011 was signed, while Serbian and Russian foreign ministers confirmed that the relations between the two countries are friendly, close and improving. They also said this would be confirmed by a strategic partnership agreement to be signed in the near future.

Serbia’s possible NATO membership may have big influence to Serbia-Russian relationship. The ruling coalition in Belgrade has designed to leave the door to NATO membership open without quite saying so. While the ruling coalition is supporting Montenegro’s intention to become a NATO member it officially to back a Resolution on Military Neutrality made by National Assembly on December 2007. According to a WikiLeaked February 2010 cable from the U.S. Embassy in Belgrade, “Tadic believes that Serbia cannot remain outside of NATO forever, but doesn’t say this often because of the political sensitivity of the issue.” (Source: Serbianna )

The opposition – Democratic Party of Serbia (DSS) – is advocating a non-aligned policy (opposing Serbia’s NATO accession), similar to Ukraine, Finland, Sweden, Ireland, Switzerland, and other democratic states, promotes strong economic ties with Russia. From tactical point of view by moving closer to Russia, Serbia strengthens its negotiating position with both the EU and the US.


Energy Aspect – South Stream nullifying Nabucco

Energy aspect is now more important in geopolitics and for Balkans as well than decades before. First of all, due to the turbulence in the Arabic-Muslim world and the ongoing rapid increase in industrial production in countries such as China, India, Brazil, Vietnam and South Africa, the price of oil and gas has increased significantly. Because of the Arab turmoil, LNG imports are at risk, as well as, the whole spectrum of hydrocarbon imports from the Arab world for years to come. Russia, as well as, Kazakhstan and Turkmenistan are starting to lay down long-term plans for the exportation of tremendous amounts of gas to China for the next decades. That means in simple terms that the EU states will have to act fast in order to secure sufficient amounts of energy, otherwise they may end up relying in the spot market by instable regions such as North Africa, Nigeria and others. The continuous instability in Iraq in combination with the isolation of Iran due to its nuclear program makes the European energy market anxious to secure reliable and steady flow of natural gas and oil.

As a result Russia gains more than a 1.2 billion Dollars daily only from its oil exports, thus being able to continue its investment program and in parallel being able to attract significant foreign direct investment and fund placements. Between January and March, 2011, around 3.5 billion Dollars were placed in Russian-based funds for investments purposes and the Moscow stock exchange has seen an almost 30% growth. A 7.5% GDP increase for the Russian economy is projected -ceteris paribus- for 2011. (Source: Russian energy moves indicate a shift in priorities by Ioannis Michaletos )

The international gas pipeline South Stream shall be finished until December of 2015 while its construction shall begin in 2013. The $21.5 billion South Stream pipeline would transport up to 63 billion cubic meters of gas from Russia to Central and Southern Europe. The stretch running through Serbia shall cost from EUR 1.3 to 1.5 billions. Serbian construction on a leg of a natural gas pipeline that could boost plans for the South Stream pipeline for Europe started in September 2010. The project would be completed this year.

The New York Times reported on 22ndSerbia March 2011 that the German oil-and-gas company Wintershall AG (a unit of German chemicals giant BASF), is set to join Russia’s South Stream natural-gas pipeline, a move that the partners hope will increase the pipeline’s chances of gaining European Union backing. BASF said joining the South Stream consortium would give it access to markets in southeastern Europe. South Stream is owned 50-50 by Italy’s ENI and Gazprom . Electricite de France is to take a 10% stake later this year as well Wintershall AG its 15 % stake.

Serbia and Slovakia have signed an agreement on cooperation in the construction of gas pipeline Aleksandrovac-Novi Pazar-Tutin. The agreement is worth €45 million and the project will be implemented jointly by a Serbian gas company Srbijagas and a Slovak consortium led by company Euroframe. The construction of the pipeline with the capacity of 100,000 cubic meters per hour could be completed in two years. Serbia has also started a €14 billion investment cycle in the energy sector and its main components are investments of about 2 billion euros in the gas sector, about 1 billion euros should be invested in the oil sector, while the potentials of renewable energy sources would enable investments worth between 2 and 6 billion euros over the next five to seven years. A Canadian company REV has informed that the company will invest about €140 million in the construction of two hydroelectric power plants – Brodarevo 1 and Brodarevo 2 on the River Lim. The Electric Power Company of Serbia (EPS) and the Italian company Seci Energia have signed the Preliminary agreement which concerns implementation of construction of a system of hydroelectric power plants on the middle reaches of the Drina river. Several agreements on cooperation in use of hydro potentials of the Drina river have already been signed between the governments of Serbia, Italy and the Republic of Srpska (RS). The capacity of these hydroelectric power plants will be 300 megawatts, while the value of the investment is estimated at about €819 million.

From EU*s side it has its own favorite energy project called Nabucco, however there is broad recognition that the €7.9bn ($10.5bn), 3,900km project is desperate for momentum as it enters what even its backers concede is a make-or-break year. Among them is the commission itself, which has contributed €200m in start-up funding. The existential question hanging over Nabucco is whether there will be enough gas to make it commercially viable. The biggest difference between the two projects is that while Gazprom will fill the South Stream pipeline with Russian gas, the consortium behind Nabucco has yet to sign up any gas suppliers or, for that matter, investors.

The competition over gas is coming harder. In my article New Player in Caspian Sea Power Corridor I described how China has came to game to take big share of Turkmenistan gas. This gas was one of the last hopes for Nabucco to fill its planned pipeline. For contest between EU’s Nabucco and Russia’s South Stream China’s actions favor later. Today’s arrangements are securing gas for South Stream while Nabucco still is searching supply. It is more clear that Nabucco should be filled with Iraqi and/or Iranian gas and political aspects related to this may delay finding(private) investors and the implementation of project as whole. In bottom line while Russia is taking its part from old gas fields and China from old and new gas fields the Nabucco pipe still is more than half empty.

Turkey has been using its recent diplomatic rapprochement with Moscow to lobby for making the Balkans a major strategic hub for a Russian gas pipeline planned to stretch from Central Asia to Western Europe, via Turkey.

Reshaping new cooperation framework

Inside EU there is already increasing amount of EU sceptics. Some of them be regarded as right wing and/or populist politicians, however in my opinion their criticism should not be ignored only because of their political position. Especially in UK has been discussions about being inside or outside of EU. (Director of the Trade Policy Research CentreDirector of the Trade Policy Research Centre) Ronald Stewart-Brown gives one possible position related to the content of EU membership in his article “The Vacuity of UKIP’s Flagship Policy” as follows:

One possible solution is to negotiate to stay in customs union with the EU outside the framework of the EU treaties and institutions on the basis of a simple new “plain vanilla” bilateral customs union agreement. Staying within the EU tariff band could reasonably be seen as a fair price to pay for continuing free movement of goods. Such an approach combined with other agreements to cover areas such as services, intellectual property, public procurement, competition and technical barriers to trade could attract the happy label of “Staying in Europe for Trade”. It would also approximate to the Common Market most people thought they were voting for in 1975, which was after all a customs union rather than a free-trade area.

In my article “Turkey’s EU hopes -is there any?” I was covering a German idea about a “privileged partnership” for Turkey instead of full membership in order to allow Turkey into the EU economically but not politically. From my point of view “privileged partnership” could pre indicate a possible search of “third way” between EU member- and non-membership. The model – when first created – could be copied also with some other countries which now are in enlargement process or included in Eastern Partnership program which include free trade agreements, visa waivers, financial aid and economic integration with the EU. This “privileged partnership“ could be a pragmatic alternative model in EU enlargement and it could even be better alternative for all stakeholders than full EU membership.

The EU’s main political aim in the region, at least in the short term, is to avoid trouble. And the bloc’s most effective stabilisation tool is money. The European Investment Bank has increased its lending in the Balkans in the past two years and will soon open regional headquarters in Belgrade. There is no concern about “enlargement fatigue”. The bloc’s financial institution aims to “help member states and future member states achieve their objectives”.

My Perspective

“There is no enlargement fatigue, what I see is enlargement apathy on the part of governments in the Western Balkans” (Stefan Füle, European Commissioner for Enlargement)

EU does not have a fixed timeframe for Serbia’s EU integration, and that it will make the decisions only once it estimates that Serbia is ready. The late reaction to the democratic revolts in the Arab world only further underlined that Brussels lacks a vision of how to steer a common EU policy agenda. Democratic deficit, enlargement fatigue and ever more rescue funds. Is there still a future for a common Europe? Is the EU the real sick man of Europe?

The European Union seems to be ready to welcome Serbia as a candidate member in spite of enlargement fatigue and economic crisis. In the meantime people in Serbia show signs of scepticism about EU membership. Support for EU accession has dropped to a meagre 57%, the lowest level of support since 2002 (when the Serbia EU Integration Office started these surveys), while a third of the respondents fears that the EU will stop the enlargement process altogether in the near future or may even fall apart.

The Balkans still aspire to EU membership, but Turkey allows them privileged access to a huge and rapidly growing domestic market of 74 million people, compared to about 55 million in the entire Balkan region. A Free Trade Agreement between Turkey and Serbia entered into force 1st of September 2010 and will give Serbian exporters opportunity to sell their products duty free to the large Turkish market, in addition to the already existing free trade agreements with the EU, CEFTA, Russia, Belarus and Ukraine.

All Balkan countries have their own development paths – some countries are going to join fast to EU (Croatia), some are going to do it later (Macedonia, Albania), some are maybe looking alliances from other directions (Serbia), Kosovo will be international protectorate – a quasi-state captured by organized crime tribes – also next decade; Bosnia will totter between breakup, federation/confederation, state, protectorate depending inner politics and exterior influences.

Serbia has strategic partnership agreements with China, Italy and France, and one such agreement is expected to be signed with Russia soon. Serbia can be seen a gravitational center of the region. In my previous articles, still and now even more than before I have a view that Serbia should think if joining to EU is worth of time, money and bureaucracy it demands, could the main benefits of EU membership be achieved via “third way”. Despite this I think that at this moment it is good idea to continue EU process but not only to fulfil EU needs but especially the needs of the beneficiaries aka Serbs not EU elite in Brussels. Most of the some 32 chapters negotiated in association process can help economical and other cooperation between Serbia and EU. Also Serbia should same time develop its economical cooperation with Russia, other BRIC countries, Turkey and regional neighbours.

Related articles:

 Serbia on the road to EU

Turkey’s EU hopes -is there any?”

Captured Pseudo-State Kosovo”

Is it time to bury Nabucco?

“New Player in Caspian Sea Power Corridor”

EU’s big choice – Nabucco or South Stream?


Turkey’s EU hopes -is there any?

April 4, 2010

Yes, to Europeans, Turkey’s EU bid is dead. The fundamentally Roman Catholic continent simply has no intention of ever incorporating 70 million Muslims in one swoop. And Turkey—with its Ottoman history, which at one time threatened Catholicism’s very existence—has particularly negative associations in European minds. Still, given this nation’s strategic value to Europe, you just watch. Somehow, some way, the EU will continue to dangle carrots in front of Turkey in order to continue to benefit from doing business with it.” (The Trumpet)

While Turkey is rising regional Eurasian superpower is EU-Turkey relationship still foggy. From my viewpoint it looks like EU has two strategies – outside official diplomatic statements – for future process with Turkey: Either EU is waiting that Turkey never will comply the membership criteria or it is innovating new obstacles to guarantee this. As Turkey is extremely important economical partner for EU as well rising EU’s energy hub there is a third way offered to Turkey – a “privileged partnership”.


Turkey submitted its application for associate membership in the European Economic Community in 1959. That was 51 years ago. seeking membership of the EU since 1987. Now Turkey, after three decades of petitioning to join Europe, is an official candidate for membership in the European Union. Joining the E.U. requires meeting “European standards” for institutions that address a wide variety of legal, social, economic, and political issues. These include judicial and economic structure, the abolition of the death penalty, free speech and a free press, minority rights, and curbing military power. Since the EU symbolically opened membership talks in 2005, Turkey has provisionally solved only one (research and development) of 35 issues of concern to the E.U., and only begun to address 11 other policy chapters that candidates must complete. From these 11 eight remain blocked over Turkey’s failure to carry out the Ankara Protocol, which was signed in 2005 and states that Turkish ports should be opened to products from the European Union, including Greek Cypriot goods.

(More about formal process see enclosed “Fact Box: EU-Turkey Negotiation Process and The 35 Chapters” on the end of this article.)


The real issue

There is many obstacles on Turkey’s road to EU accession like missing trade links with Cyprus, like Turkey’s refusal to open its ports and airspace to EU member Cyprus freedom of expression, like the rights of the Kurdish minority and need for Turkey to speed up its political reforms. However its is easy see that these issues are only useful cover to real unspoken fact that France and Germany, among others, don’t want Turkey to join EU.


In France some polls are showing over 80 % of population to be against Turkey’s membership. Nicholas Sarkozy, the French president, has already moved to torpedo Turkish accession to the bloc by stopping ratification efforts in five key areas. In Germany Angela Merkel’s Christian Democrats (CDU) and the Free Democrats (FDP) are both hostile to the accession. The CDU is against the Turks joining for cultural reasons while the FDP has said the country’s economy is too far below European standards to integrate comfortably with other members. Turkey – a country of 72 million – would be second only to Germany in scale if it were to join the EU. Although the government of the country is secular, estimates put the proportion of the population which is Muslim at around 99 percent. On other words it is Turkey’s overwhelming embrace of Islam which is the real issue against country’s EU membership.


Privileged partnership as solution


German Chancellor Angela Merkel insisted on “privileged partnership” for Turkey instead of full EU membership before her visit there March 29-30. “I am of the opinion that we should rather aim for a privileged partnership, in other words a very close affiliation of Turkey to the European Union,” the chancellor said in a radio interview. Privileged partnership, which falls short of full membership. Both Berlin and Paris have peddled the term as an alternative to Turkey’s full membership of the EU, something which they vigorously oppose. She told a Turkish newspaper that Ankara should instead be granted a “privileged partnership” with the EU, a unique status that has not been conferred on any other country that has negotiated its way to membership. She added that Turkey could apply some 80% of EU law.

Turkey rejects the idea of “privileged partnership”. Before Merkel’s visit Turkish Premier Erdogan repeated demands on Wednesday for full EU membership. “We are already conducting negotiations, and these are aimed at full membership. For us, there is no alternative,” Erdogan said in an interview with the German weekly Zeit. “Such a thing as privileged partnership does not exist, so we do not take that option seriously,” said Egemen Bagis, Turkey’s Europe minister. “At times I feel insulted for being offered something which does not exist.” Speaking to the press following their talks, Ms Merkel said she now understood that the term “privileged partnership does not have a good connotation in Turkey.”


Turkey’s viewpoint


I don’t understand the reason of their hatred and grudge against Turkey. I wouldn’t expect this attitude from Merkel. I will share my opinions with her. Turkey is not a whipping boy.” (PM Erdoğan)

In his interview to German magazine Der Spiegel Turkish Prime Minister Recep Tayyip Erdogan said following:

Together with Spain, we run the United Nations Alliance of Civilizations initiative against extremism, which benefits Europe. We have been a member of the customs union since 1996, and we satisfy the political criteria established in Copenhagen. In fact, we are even closer to fulfilling the economic Maastricht criteria than some E.U. member states. And then there is the fact that we are a founding member of the Organization for Economic Cooperation and Development (OECD) and have been a member of NATO since 1952. This makes us a bridge between the West and 1.4 billion Muslims.

Beril Dedeoglu gives quite good description over Turkey’s position in her articleGermany-Turkey: a key relationship

According to the Merkel government, Turkey will never be able to fulfill the criteria necessary to join the union; and even if it does, the EU members will not approve this membership. However, Germany also estimates that Turkey will become an unstable country if the process is simply abandoned. So Germany proposes implementing a “privileged partnership” to Turkey instead of full membership in order to allow Turkey into the EU economically but not politically. This proposal is perhaps reasonable for them; however, it is not rational from Turkey’s perspective. Turkey has no intention to build ties with the EU other than membership. If the membership process fails, Turkey can pursue its bilateral relations with some EU countries, concluding trade or investment agreements with them or initiating cooperation on security and defense matters, but no one can guarantee that Germany will be one of the countries Turkey will choose to develop its relations with. Furthermore, if Turkey does not become an EU member, it will no longer have the obligation to realize the “free trade area +” project, called privileged partnership, with the EU. We already have the customs union, which has reached its limits and which creates serious problems. If the membership expectation disappears, Turkey will definitely do something about it and try to establish other free trade areas in the region.

Privileged partnership means that Turkey must adopt the acquis without the right of being represented in EU institutions. However, no one is capable of explaining why a non-member Turkey would accept the acquis or how it would be able to finance the cost of reaching EU standards. In the event of a privileged partnership, the EU will not ask Turkey to adopt the principles of high levels of democracy and being a state of law; this idea’s partisans in Europe are convinced that Turkey would be amazed by that. Although it is true that this would please some in Turkey, one must not neglect the social demands in Turkey in favor of democratization, as they have reached unprecedented levels.


Energy aspect


Turkey holds a strategic role in natural gas—between the world’s second largest natural gas market, continental Europe, and the substantial gas reserves of the Caspian Basin and the Middle East. Turkey is positioned to play an even bigger role linking gas producers in the Caspian and Middle East to consumers in south-eastern and central Europe. It is developing energy corridors with Russia (Blue Stream I and agreed II), cooperation with Russia’s South Stream, it is participating to proposed EU’s Nabucco gas pipeline project and a potential Iranian gas transit deal.


Turkey also imports liquefied natural gas (LNG) from Algeria and Nigeria to its only regasification plant at Marmara Ereglisi. LNG imports have continued to rise as Turkey seeks to diversify its sources of gas imports. Turkey is also taking steps to increase regasification capacity at two of its ports.

a table depicting turkey's natural gas transit potential by country of origin

The EU’s new “southern corridor” has been dubbed a version of U.S. “Silk Road Strategy” aimed to block Russia from gas fields around Caspian Sea and its connection to Iran (More in my article “Is GUUAM dead?). The South Pars natural gas field brings a new element to change original U.S. plan as it is a sign of a long-term energy alliance between Moscow and Tehran and with active participation of the EU. Turkey and Armenia may be join the project as transit countries. Naturally, this leaves Washington very few chances to lobby its energy projects in the region aimed at using Azerbaijan and Georgia as the so-called ‘Caucasus communication corridor’.


In my conclusion during next few years Turkey will come an energy hub through further development of Blue Stream pipeline from Russia and implementation of South Stream, possible implementation of Nabucco and planned import of gas from Iraq and Iran. So in energy game Turkey will have some aces; if not membership EU must offer very attractive “third way” solution for Turkey.


Epilogue


During last bilateral (Germany/Turkey) talks, Mrs. Merkel detailed her view that Turkey be offered a “privileged partnership”, which Turkey has initially rejected. From my viewpoint that may be unwise as the alternative would be continuing a negotiation process without any guarantees of success.

The EU’s fear is that if Turkey does not get membership Ankara would look for other partners on energy and security, perhaps getting closer to the China-Russia-Iran axis. So Germany proposes implementing a “privileged partnership” to Turkey instead of full membership in order to allow Turkey into the EU economically but not politically. This proposal is perhaps reasonable for them and from my viewpoint rational also to Turkey.


Some Western Balkan countries are a bit similar situation than Turkey. In my articleSerbia on the road to EU” I concluded following, which in my opinion could as well applied with Turkey:

From my point of view Serbia should think if joining to EU is worth of time, money and bureaucracy it demands. Visa arrangements, free trade and some EU programs are possible also for non-members. However I think that at this moment it would be good idea to continue EU process but not because of fulfilling EU needs. The motivation should be the needs of the beneficiaries aka Serbs not EU elite in Brussels. Also from my point of view Serbia should not put all eggs in the same basket; economical cooperation with Russia and other BRIC countries can create real development on the ground instead slow development on the EU’s negotiation tables.

From my point of view “privileged partnership” could preindicate a possible search of “third way” between EU member- and non-membership. The model – when first created – could be copied also with some other countries which now are in enlargement process or included in Eastern Partnership program, which aims to promote economic and political stability in the countries. It includes free trade agreements, visa waivers, financial aid and economic integration with the EU. In return, the eastern neighbors are expected to step up progress toward economic modernization, democracy, the rule of law and human rights.

On the bottom line “privileged partnership“ could be a pragmatic model of the future relations between Turkey and the EU, it can be applied also to other neighbourhood countries e.g. via Eastern Partnership Programme and can even be better alternative for all stakeholders than full EU membership.

Fact Box: EU-Turkey Negotiation Process and The 35 Chapters

How Negotiations Proceed

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The 35 chapters of the EU’s acquis communautaire:
  1. Free Movement of Goods
  2. Freedom of Movement for Workers
  3. Right of Establishment and Freedom to Provide Services
  4. Free Movement of Capital
  5. Public Procurement
  6. Company Law
  7. Intellectual Property
  8. Competition Policy
  9. Financial Services
  10. Information Society & Media
  11. Agriculture & Rural Development
  12. Food Safety
  13. Fisheries
  14. Transport
  15. Energy
  16. Taxation
  17. Economic and Monetary Policy
  18. Statistics
  1. Social Policy and Employment
  2. Enterprise & Industrial Policy
  3. Trans-European Networks
  4. Regional Policy & Coordination of Structural Instruments
  5. Judiciary & Fundamental Rights
  6. Justice, Freedom & Security
  7. Science and Research
  8. Education and Culture
  9. Environment
  10. Consumer and Health Protection
  11. Customs Union
  12. External Relations
  13. Foreign, Security, Defence Policy
  14. Financial Control
  15. Financial & Budgetary Provisions
  16. Institutions
  17. Other Issues

Croatians voted for Change

January 14, 2010

The last election in Croatia can bring a refreshing change with new President Ivo Josipovic – a university law professor and a composer of classical music – but he will find a much tougher struggle ahead of him. This struggle not only due economical problems (national debt and unemployment) but also problems related to Croatia’s past. These problems are highlighted when Croatia is on final round to come next EU member state.

President elected Mr Josipovic took already new direction towards Croatia’s neighbour Serbia. Croatia and Serbia have filled genocide lawsuits against each other in international court about events during the war of the 1990s. Mr Josipovic told that he is ready to find common solution by direct negotiations with Serbs without trial. “I will negotiate with Belgrade about the missing persons, war crimes trials and the return of cultural treasures. If they accept these conditions there is no reason to proceed with the genocide suit,“ said new Croatian president. (More in my articleCroatia’s and Serbia’s ‘Genocide’ Case to Proceed”)


Historical burdens

However, in Croatia’s accession process, one trial still is left related to the International Criminal Tribunal for the former Yugoslavia (ICTY). ICTY wants access to important documents on the use of artillery by Croatian forces during the Balkan war in the 1990s. These are needed in relation with the trial of general Ante Gotovina, indicted by ICTY for war crimes while expelling Krajna Serbs from Croatia in 1995 under the “Operation Storm”. This ethnic cleansing caused innocent victims, and caused around 200,000 Serbs to flee the former Yugoslav republic at the end of the 1991-1995 war. (More about topic in my article “Operation Storm – Forgotten Pogrom”)


Between 1991 and 1995, 220,000 ethnic Croats and subsequently up to 300,000 ethnic Serbs were displaced by armed conflict in Croatia. Since then almost all the Croat IDPs have returned to their homes, while most of the Serbs displaced have resettled in Serbia or in the majority-Serb Danube region of Croatia. Since the end of the conflict, only one third of Croatian Serb IDPs and refugees have been able to return. (More e.g. in article “Forgotten refugees – West-Balkans”)


Croatia & EU-membership

The fact Greece exists in the EU means that we do not have to do anything else in terms of judicial reform, and the fact that certain Baltic states are members means that we have nothing to do in the realm of minority policies. (President of the Croatian Helsinki Committee Žarko Puhovski)

Croatia is suffering due the massive political corruption. During early years of independency Croatia has been transforming itself into a mafia state; ruling Croatian Democratic Union (HDZ) have presided over a creeping authoritarian kleptocracy, bribery, kickbacks and cronyism are ubiquitous. Last European Commission progress report of Croatia highlighted the need need to pursue its reform efforts, in particular on the judiciary and public administration, the fight against and organised crime, and minority rights. (EC Croatia 2009 progress report can be found from my Document library)

Government has been also cracking down on the independent media. The regime controls state television and radio, suppressing dissent – especially, any investigations into high-level HDZ corruption – and also recently some journalists have been killed and physically assaulted.


Ironically the Croatian population is not any more so interested about EU, according Gallups mentioned earlier among the Western Balkan countries, Croatia shows the lowest percentage of people convinced that EU accession would be good for their country (29%) the largest group of people in the country (38%) felt that EU membership would neither be good nor bad. The amount of EU Scepticism in Croatia is big despite or because Croatians feel most sufficiently informed about EU in Western Balkans. (Source: “Gallup Balkan Monitor-Focus on EU Perceptions”)


Only 39% thought that a majority supports EU accession, while 45% thought that most Croats are opposed to entering the EU. Opinions about this issue are unevenly distributed: support for the EU is higher among the urban population (35%) and people with a university education (51%).


Differences can also be observed between the different regions of Croatia: support for the EU is highest in the urban region around Zagreb (Zagrebacka Regija, 36%), while rather rural areas such as Istocna Regija and Središnja Hrvatska have rather low support with, respectively, 21% and 22%.


Nationalism

One concern related to Croatia’s joining to the EU could be Croats’ strong identification with their own country: 65% of interviewees (Gallup mentioned earlier) identified very or extremely strongly with Croatia; this was one of the highest percentages in the region. This might indicate that, 17 years after independence, residents in Croatia are still more interested in establishing their national identity than in looking towards Europe.

One very alarming trend is (over)emphasizing Croatia’s Nazi past. During WWII Croatia was created and supported by Nazi Germany and Fascist Italy. It thus adopted their racial and political doctrines as well practices. Jasenovac was Croatia’s largest concentration and extermination camp. From total 600,000 murdered ones some 25,000 were Gypsies, some 25,000 Jews and over half a million Serbs. From time to time some symptoms of this past are occurring also today ad even with support of government (More e.g. in my article “Nazi’s funeral shadows Croatians past )


One aspect influencing Croatian patriotic feelings is the situation of Croats in neighbouring Bosnia-Herzegovina. Some time ago a Croatian NGO Libertas made public statement in which it says that Croatians in Bosnia are victims of Bosnian Muslim terror and are asking Bosnian Croat political leadership to initiate a plan that will break up the Bosnian Federation entity and form a Croatian one. Do possible three entities (each of them with Bosniak, Croat or Serb majority) of have any reason to hang together in same state or are more alluring prospects other side of the borders?


Bottom line


I believe that Croatia’s road to EU came with elections easier than before e.g. because

  • Josipovic declared that the struggle for justice and against corruption would be his absolute priority;
  • As clean person Josipovic has good credibility with his anti-corruption struggle unlike his opponent had;
  • With landslide victory the voters made a clear choice so appreciating the values and program of new president;
  • New president has already showed his readiness to ease (ethnic) tensions with neighboring Serbia and the same will probably happen also with Bosnia-Herzegovina (his opponent hinted support to create and possible separate Croat dominated region from BiH); the border dispute with Slovenia is already solved;
  • Economical cooperation with Serbia will probably develop e.g. when Croatia is taking more active role with implementation of South Stream gas pipeline project.

The country is expected to complete its accession negotiations in 2010 and join in 2012. With new president this is very realistic.



Serbia on the road to EU

December 29, 2009

Serbia’s application to join the EU was finally made before X-mas. Early December EU foreign ministers agreed to unblock Serbia’s interim trade agreement, which is part of Stabilisation and Association Agreement (SAA). Serbia, Macedonia, and Montenegro have been approved by EU for visa-free travel within the EU Schengen area from January 2010. (More in my article “EU’s visa-freedom dividing Balkans”).

While Serbia’s pro-western government is committed to achieve EU membership same time in Serbia however anti-European feeling is growing and according some long time polls the number of those against cooperation with ICTY (Hague Tribunal) is on the rise again.

EU-Serbia trade has been growing rapidly since 2000 and now the EU is Serbia’s main trading partner. In 2007 exports and imports of goods and services to and from the EU increased to 56% of the country’s total exports and 54% of its total imports, compared with 53% and 49% in 2006. However during 2009 the economical activity between Serbia and Russia has developed significantly and the prospects are even better mainly due the starting implementation of South Stream and other projects related to it.

After visa-liberalization and the free-trade agreements one could ask what is the added value for Serbia (as well for Bosnia-Herzegovina and Montenegro too) to be a EU member state?

Next steps

Sending the application is the easy part of process, the real work for next 4-10 years is only beginning. The application will be placed on the agenda of the EU Council of Ministers. If it gets the approval of the ministers of all 27 EU member states, it will be forwarded to the European Commission, which will then send Serbia a questionnaire with 1000-4500 questions. dealing with all institutions and sectors. Based on the answers, the European Commission will report on the situation in the country which has applied. And then are starting negotiations where some 80.000 pages of EU regulations are applied to candidate country’s legislation.

During negotiations EU will open different chapters related e.g. trade, energy, internal affairs, food safety, citizen rights etc; EU also can stop opening chapters because of whatever political reasons. This kind of issues can be e.g. cooperation with Hague and Kosovo question.

And the neighbours

Croatia in 2009, with the country now entering its final phase of negotiations. In addition to agreeing on a financial package (see first story), the Council decided to set up a working group to draft an accession treaty. In relation to the former Yugoslav Republic of Macedonia, the Council noted the Commission’s recommendation to begin negotiations and agreed to return to the issue under the Spanish Presidency. Ministers were “encouraged” by recent positive developments between Skopje and Athens on the dispute over the use of the name “Macedonia”.

Montenegro presented the completed questionnaire to Commission on early December. Based on the Commission’s Opinion the Council will have to decide whether the country is ready to be granted candidate status or open membership negotiations. Montenegro applied to join the EU in December 2008 and the Council formally asked the Commission to prepare an opinion on the application four months later.

On 16 December it was Albania’s turn to receive a pre-accession questionnaire.

On Bosnia and Herzegovina, the Council reiterated its position that membership negotiations could not begin until the Office of the High Representative has been closed and replaced with a reinforced EU presence. It called on the country to “urgently speed up key reforms” and stressed the need for “a shared vision of the common future of the country by its leadership, and the political will to meet European integration requirements”.

EC can be also freeze the process if there is some unfinished border dispute with candidate country. Montenegro’s way with towards EU seems clear but it is hard to believe that Serbia and EC will soon agree which are the borders of Serbia – are they including Kosovo or not? After all the refined negotiation process however the climax will be political one – EU can take new members with any criteria and lower standards like it was case with Bulgaria and Romania.

I have no doubt that both Montenegro and Serbia can and will give satisfactory answers to EC questionnaire and have good ability to fulfill (pre) conditions. Both countries have so good administrative capacity that they can match all criteria needed for membership. Serbia has already prepared a document “National Programme for Integration of Serbia into EU(NPI) which with its 900 pages describes the integration activities of different sectors..

Serbia has demonstrated its commitment to moving closer to the EU by building up a track record in implementing the provisions of the Interim Agreement with the EU and by undertaking key reforms. On 14 October 2009 the Commission adopted its annual strategy document explaining its policy on EU enlargement.

More about EU Commission’s country conclusions in my article “West Balkans soon ready for EU – at least part of it” .

My point of view

My estimation still is that there will be some grey area between non- and full EU membership. During next few years Turkey will come an energy hub through implementation of Blue Stream pipeline from Russia and South Stream, possible implementation of Nabucco and planned import of gas from Iraq and Iran. So in energy game Turkey will have some aces; if not membership EU must offer very attractive “third way” solution for Turkey, why not do the same with some states of the Western Balkans if needed.

Serbia’s position is a bit similar due the South Stream project which is going ahead in comparison with Nabucco, even faster than in my earlier estimation few months ago. Nabucco has got more problems with energy supply sources when Azerbaijan on December decided to sell bigger share of its gas to Russia and new gas pipe from Turkmenistan to China is progressing fast.

All Balkan countries have their own development paths – some countries are going to join fast to EU (Croatia), some are going to do it later (Macedonia, Albania), some are maybe looking alliances from other directions (Serbia), Kosovo will be international protectorate also next decade; Bosnia will totter between breakup, federation/confederation, state, protectorate depending inner politics and exterior influences.

From my point of view Serbia should think if joining to EU is worth of time, money and bureaucracy it demands. Visa arrangements, free trade and some EU programs are possible also for non-members. However I think that at this moment it would be good idea to continue EU process but not because of fulfilling EU needs. The motivation should be the needs of the beneficiaries aka Serbs not EU elite in Brussels. Also from my point of view Serbia should not put all eggs in the same basket; economical cooperation with Russia and other BRIC countries can create real development on the ground instead slow development on the EU’s negotiation tables.


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