With enough money and mortar, those problems can probably be solved. But the hard part–the important part–is not about patching what was. It’s about building something better in southeast Europe. Can the Western powers, with the European Union in the lead, actually do so? It looks like they mean to try. And though the obstacles are many, and there’s been little but words so far, it is possible that the Kosovo war may someday be regarded as the event that extended the benefits of economic integration to every corner of Europe. It has already affected the tone of several key relationships. Russia’s pro- Western crowd seems to have been strengthened, and the IMF will likely reward Moscow for its diplomatic aid in Kosovo with a $4.5 billion debt rollover. Greece stuck with NATO–and has now plunged into reconstruction efforts in an attempt to regain some of its historic influence in the area. The Turks are right behind the Greeks, but amazingly, the two nations may cooperate on several projects. Most fundamentally, it has become clear that the EU must embrace the Balkan countries, or suffer the consequences.
The Union may finally be ready to do that. As the G8 foreign ministers met in Cologne last week in preparation for this week’s summit, they ironed out the goals of their Stability Pact. The pact is the master plan for economic reconstruction in the Balkans. It would do much more than repair bombed bridges and roads. It calls not only for massive aid to be managed by a new development agency, but also for “Stabilization and Association Agreements” between the EU and Balkan countries to expand trade and other ties. The long-term goal: “full integration into EU structures.”
It’s an ambitious plan–and an expensive one. The EU had priced the program at around ¤30 billion over five years, but many experts are now saying that’s conservative. Michael Emerson, a senior research fellow at the Center for European Policy Studies in Brussels, is the author of a European reconstruction paper that was recently praised by incoming EC president Romano Prodi. He puts the figure at around ¤50 billion. Other analysts say ¤100 billion is more realistic. Still, European leaders seem willing to pay the majority of whatever the final costs may be. Says one German official, “This will cost us less than what we spend right now for crisis management. We’d rather spend the money on preventive diplomacy.”
The cash hasn’t been raised yet; EU leaders will meet within the next month to pledge and collect the first billion euros, which will go directly to Kosovo. Meanwhile, the World Bank has already parceled out several hundred million dollars in loans to troubled areas. And the EU might try to achieve a double benefit with its aid money by allowing countries like Bulgaria and Romania first shot at reconstruction contracts. Both nations were struggling toward political and economic reform before being hit by the war. “There is stability there, and it needs to be supported,” says a Western diplomat in Sofia. Hard times brought on by huge budget deficits and lost trade have resulted in some unrest, but left-wing politicians and labor unions in Romania have failed to organize nationwide strikes. European officials say that this is a clear sign that most Romanians want to get back on track to EU membership.
Still, old prejudices die hard, and integrating southeast Europe into the EU won’t be easy. At last week’s EU summit meeting in Cologne, Turkey failed to move any closer to EU membership–despite the Turks’ strong support for NATO during the Kosovo crisis. Disappointed once again, Turkey is nevertheless bidding for reconstruction contracts, and is even discussing the possibility of some joint projects with Greece. Last month, Turkish Foreign Minister Ismail Cem and his Greek counterpart, George Papandreou, talked on the phone about how Greek and Turkish businessmen might cooperate in the reconstruction of Kosovo. Just a conversation, to be sure–but given the history of the two nations, an important one.
The crisis in Kosovo has produced other odd alliances. Because of the collapse of the Serbian economy, companies in the Bosnian Serb-controlled half of Bosnia have been forced to start doing business with companies on the Muslim side of the country. That’s a hopeful sign, but both sides also need to be able to do business beyond their borders. A big help there, according to Emerson, would be for governments to give up local monetary control and simply adopt the euro. The Deutsche mark could be used for cash purposes until the euro notes become available in 2002.
But behind all the ambitious ideas and the hopeful signs, one very large question looms. How can there be any real reconstruction of southeast Europe without Serbia? Aside from the obvious problems of having to route trade and transport around the country, it’s tough to imagine long-term peace and stability in the Balkans if the center is left to rot. Some economists say funds are likely to begin trickling into Serbia even with Milosevic in power. But many more Europeans are adamant that as long as Milosevic is around, they won’t lift a finger to help Serbia. As Tony Blair said in NEWSWEEK, “We can return Kosovar Albanians to their homes, but we cannot begin the process of reconciliation or make the region safe for the long term while a dictator remains at the heart of it.”
So, Europe moves forward with reconstruction, and hopes that it won’t have to wait for Yugoslavia very long. After 78 days of bombing and 10 years of sanctions, perhaps the Serbian people are getting ready to dump Milosevic and share in the peace and prosperity of a larger Europe. Until then there is plenty of work to be done. Next week officials from the World Bank and NATO will go to Kosovo to begin tallying the damages, and calculating what it will really cost to give the people there shelter, clean water, and other necessities. You have to start somewhere.
