[ Western Balkans and EU ]

The debate over the EU's 2007-2013 budget is closely followed by the Western Balkan countries. Transitions Online features a very complete background article on the implications of the budget talks for the Western Balkan countries. As the author of the article, Tim Judah, concludes, the way these talks are conducted shows again that the Western Balkans are more a passive aid recipient than an equal negotiation partner...

Exceptionally, I have chosen to quote the whole second part of this article focussing on budget issues:

The experience of new members of the EU is that the conditions of membership were so stringent that they really helped transform them into modern democracies. This is the path the Balkan leaders want to follow. But, now, just when they need it most, the burning question is, how much money is set to be available to help them to do the job?

The question comes as EU countries are now locked in a bitter dispute about the size of the EU budget for the 2007-2013 budget cycle. Originally the European Commission had proposed a budget of 1 trillion euros. Under a proposal made by the Luxembourg EU presidency earlier this year this would have been cut to 871 billion euros. When the United Kingdom, holder of the presidency until the end of this month, proposed a budget of 847 million euros, Commission President Jose Manuel Barroso denounced it as "unacceptable."
Under the British proposal, structural funds for the eight former communist members of the EU that joined in 2004 would be cut by 10 percent, an idea which has received a cool reception from them and lot of media coverage overall. What has received no coverage at all is how all this would affect the Western Balkans.

In fact, the answer is that no one actually knows, beyond the presumption that the region will receive a lot less money than it had hoped for. Indeed, according to one commission source, the current U.K. proposal (which may well of course be rejected) would cut spending for the conduct of the EU's external relations, including enlargement, by 40 percent from what was foreseen under the commission's original proposal. However, as one British Foreign Office spokesman remarked tartly, the original budget was "unaffordable."
Even when the budget is agreed, though, the amount of cash available for the Western Balkans will not be known until the details are worked out.

For the period beginning in 2007, the commission has proposed that the bulk of its aid to countries on the accession path be disbursed via a new Instrument for Pre-Accession Assistance (IPA). Under this proposal aid would be distributed in five different categories: transition and institution building, regional and cross-border cooperation, regional development, human resources development, and rural development. However, what you are eligible for depends on your status. Thus Croatia, as a fully-fledged EU candidate, stands to gain from all of these strands and Macedonia will too, if it becomes a candidate member in mid-December. The rest of the region, however, the potential candidates, will not be eligible for much of this funding.

This proposal has been attacked by the influential Berlin-based think tank, the European Stability Initiative (ESI). The idea is short-sighted and could lead to the creation of "a ghetto of underdevelopment in the midst of Europe," ESI charges. The current draft IPA, it argues, will ensure "the EU will not be helping the region to put in place … structures for economic and social cohesion polices." IPA would mean that the Western Balkan countries will not be adequately helped to prepare for EU membership "nor given the assistance they need to tackle their deep social and economic problems."

If aid is disbursed according to this proposal (based on the original commission budget, substantially higher than that now being hammered out by EU members) argues the ESI, the Western Balkans will see a drop in crucial assistance - at least until the individual states become full-fledged candidates. Compare Bulgaria and Serbia, countries each with about 8 million people. In 2003, Bulgaria received some 300 million euros in assistance
compared to 240 million for Serbia. In 2009, however, Bulgaria (by then an EU member) will be receiving 1.6 billion euros compared to 117 million for Serbia.

So while Bulgaria and other countries have benefited hugely from programs aimed at modernizing agricultural, environmental, and transport policies, the potential candidates in the Western Balkan will not be able to access such funds, if IPA takes effect, until 2010 or whenever they become official candidates.

The commission rejects these arguments. It points out first of all that no one knows how much the Western Balkans will get because no one yet knows how big the budget is going to be. Secondly, says one commission source, some of ESI's assumptions and research are flawed. The IPA proposals allow for a good deal of flexibility, says the
source, and furthermore it is simply wrong to argue that potential and actual candidates should get the same type of aid. A diplomatic source also disputes the claim that the potential candidates will get less money than before, arguing that aid which does not come via the IPA will be delivered in different forms such as through the European Agency for Reconstruction. "They will not get less money," he says, "although what they will get is yet to be decided."

In 2002, total EU assistance to the Western Balkans, including Croatia, was 612 million euros. In 2003 the amount fell to 555 million euros and in 2004 the figure was 472 million euros. Despite the fall in total aid, though, all countries saw an increase, except for Bosnia and especially Kosovo (which went down from 155 million to 40 million euros) as support for post-conflict reconstruction fell off.

In the coming weeks and months officials in all the Western Balkan states will be anxiously following the debates about the EU budget. The future of the region is already inextricably linked to Brussels, but the region remains what it has been all along: only a passive recipient of aid and conditions. The day when Western Balkan states can help make policy in Brussels too still seems a long way off. (Transitions Online, 9.12.2005)

Link: European Stability Initiative: Breaking Out Of The Balkan Ghetto: Why IPA Should Be Changed, June 2005

Link: EU Parliament Procedure File for the Regulation on the Instrument for Pre-accession Assistance