2009 EPS Balkans Web

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Media PartnerWith the support of

A NEW ERA IN THE BALKANS

Winter 2009


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A NEW ERA IN THE BALKANS

Report of the European Policy Summit

co-organised by Friends of Europe,

the Konrad Adenauer Stiftung,

the Constantinos Karamanlis Institute for Democracy and

the OECD Investment Compact for South East Europe

with the support of The Coca-Cola Company

with media partner Europes World

Winter 2009

Bibliothque Solvay, Brussels


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The v iews expressed in this report are the private views

of individuals and are not necessarily the views of theorganisations they represent, nor ofFriends of Europe,

its Board of Trustees, members and partners.

Reproduction in whole or in part is permitted, provided

that full credit is given to Friends of Europe, and provided

that any such reproduction, whether in whole or in part,

is not sold unless incorporated in other works.

Rapporteur: David Koczij

Publisher: Geert Cami

Project Director: Nathalie Furrer

Project Manager: Jacqueline Hogue

Photographer: Franois de Ribaucourt

Design & Layout:Kramik


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Table of contents

EXECUTIVE SUMMARY 4

Morning: Plenary Sessions

OPENING ADDRESS - Michael Leigh 6

SESSION I - Making 2010-2020the Decade of the Balkans 9Stepping stones 12Stumbling blocks 14

Bilateral issues 16Stability for the future 20

SESSION II - Strengthening ownership:promoting regional cooperation andenhancing local capacities 23Promoting regional cooperation 24Is cooperation enough? 27

Afternoon: Economic Roundtable

SESSION III - Do the economic stormclouds have a silver lining for the Balkans? 31Improving government involvement 32Promoting investment through a betterbusiness environment 34Educational and social reforms: a long-termperspective 35The silver lining a fi nal word 39

SESSION IV - The challenge of infrastructure:

can Balkan states share projects? 41Private-public partnerships 42Developing infrastructure throughregional cooperation 43Regional cooperation and EU integration 45

ANNEX I - List of Discussants 48and Speakers

ANNEX II - Programme 51

ANNEX III - List of Participants 55


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4 A new era in the Balkans: Winter 2009

EXECUTIVE SUMMARY

Friends of Europes 10th annual high-level European Policy Summit on the Balkans

gathered Prime Ministers, policymakers and representatives from the public and

private sectors to discuss A new era in the Balkans.

This summit considered which preconditions remain for the completion of Balkan

accession negotiations and how regional cooperation could be strengthened in an

area plagued by historical differences and political tensions.

Integrated into the discussion was the issue of the European Unions (EU)

enlargement fatigue in the face of apparent stagnation of the membership

prospects in the Western Balkans.

Though the last year has seen many promising developments, said Michael Leigh,

European Commission Director General for Enlargement, in his opening address,

many challenges remain. Nevertheless, it is important that the process continue.

It is said that the EU will not be complete until the Western Balkans join, Leigh

asserted. The region is an integral part of our development.

At the same time that landmark steps are being taken between the EU Enlargement

mechanisms and governments in the region, regional cooperation has gained

significant ground, with initiatives for Balkan empowerment taking hold throughout

the region. Hido Bicevic, Secretary General of the Regional Cooperation Council

(RCC) addressed the summit, saying that the substance [of the RCC] is that, for

the first time in modern history, the countries of the Western Balkans have decided

to take cooperation into their own hands.

The plenary sessions were followed by a roundtable discussion on the economic

realities facing the Balkans. Following the global economic crisis, the roundtable

asked, what positive signs exist that point to the possibilities of market reforms and

economic restructuring which may revive the areas flagging economies?

Alistair Nolan, Head of the Investment Compact for South East Europe at the

Organisation of Economic Co-operation and Development (OECD), presented an

overview of the effects of the crisis on the Western Balkans, noting that while the


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5A new era in the Balkans: Winter 2009

economic storm clouds are still present, there are reasons to be optimistic for the

future.

One area which offers hope for the future of the region is infrastructural development.

The fledgling cooperation between Balkan states, a first step towards integration

into the EU bloc, should focus on regional infrastructure projects in order to improve

their regional integrity as well as physical access to the EU member states which

surround them.

It is important to have harmonisation throughout the area, opined Dirk Lange,

European Commission Head of Unit for Croatia in the Directorate General for

Enlargement. The countries in the Western Balkans have to share projects

otherwise they are doomed to fail.

During his welcome address, Peter R. Weilemann, Director of the European Office

of the Konrad Adenauer Stiftung, stated that as long as the nations of the Western

Balkans are not members of the European Union, the unification of Europe will not

be complete.

The road to stability and integration in Southeast Europe has been as bumpy as

some of the roadways which traverse the countryside itself, but with international

support, regional cooperation and a focus on economic stability and development,

the possibility of making 2010-2020 the Decade of the Balkans continues to be a

strong and viable reality.


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OPENING Michael LeighADDRESS

Michael Leigh, European Commission Director General for Enlargement, stated

that It is quite clear that the destiny of the Western Balkans is intricately tied

to the destiny of the EU. The intertwined destinies of the EU and the states of

Southeast Europe are refl ected in both the EUs enlargement process as well as

the common history shared by the Balkan countries and the rest of Europe.

Morning: Plenary Sessions

Michael Leigh, European Commission Director General for Enlargement,addresses the audience and panellists at the start of the fi rst plenary session.


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The region we are discussing today is one that is now completely surrounded

by member states of the European Union. Some have described the Western

Balkans as a kind of inner courtyard of the European Union and an integral partof our own development, he stated.

There has been consensus for many years between EU member states that

the prosperity and growth of the Western Balkans is something to which all

European nations are committed. This commitment is not a controversial issue,

he continued, but much work remains to be done.

The countries of the Western Balkans have simultaneously been involved in a

process of transition and, in many cases, of state-building and member state-

building for the future. Though there exists goodwill on all sides, the challenges

facing the enlargement process are even greater in the face of the current global

economic climate.

Now more than ever, he added, we need to work together to alleviate the

impact of this crisis and to show our citizens that we are achieving tangible results;

that they are not just listening to the distant political rumblings of diplomats and

politicians which they cannot understand.

There have been many victories in the past year for the enlargement and stability

process, Leigh informed the gathering. On 30 November, just a week before

the summit, the European Council had passed a resolution of visa liberalisation

for citizens of the former Yugoslav Republic of Macedonia, Montenegro and

Serbia1 as a result of these three countries having met the required reformatory

benchmarks.

The lack of visa-free travel has obscured the European vision of many especiallyyoung people who have never had the opportunity to travel beyond their own

borders. Now, in just a few days, with visa liberalisation coming into effect, these

experiences have become a thing of the past. Michael Leigh continued, adding

that if the requirements can be met, Albania and Bosnia and Herzegovina are set

to follow their fellow Balkan nations in the visa liberalisation process in 2010.

1. European Council Press Release 16640/09 (Presse 349), 30 November 2009. http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/jha/111561.pdf Accessed on 12 December 2009.


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Advances in bilateral relations have also been a hallmark of the past twelve

months, the summit heard. Following the recent resolution of the Croat-Sloveneborder dispute, Croatia could be ready to accede as early as next year, provided

the terms of the accession negotiations are met.

The former Yugoslav Republic of Macedonia, Leigh continued, after 4 years of

candidature and major reforms, specifi cally in the areas of administration and

the judiciary, has seen real possibilities in the opening of accession negotiations.

This is further supported by the redoubling of efforts under the auspices of the

United Nations (UN) to resolve the dispute between the country and EU member

Greece over the name.

With all the good that has been accomplished in the last year, there is no

disguising the fact that we face a number of very real challenges, Leigh

concluded, mentioning questions of governance and constitutional reform in

Bosnia and Herzegovina on the road to adopting the rules and laws of the EU as

well as the continuing political hot potato represented by Kosovo.

Stepping back to consider the region as a whole, the Commission DirectorGeneral assured the participants that the various questions of rule of law,

organised crime and corruption, amongst others, are being given great attention.

Regional cooperation is being strengthened across the region, he added, and

the European institutions are fi rmly committed to working together with their

partners in Southeast Europe to alleviate the impact of the economic crisis and

help lead them down the path towards European integration.

Now more than ever we need to work together to alleviate

the impact of this crisis and to show our citizens that

we are achieving tangible results; that they are not just

listening to the distant political rumblings of diplomats

and politicians which they cannot understand.

Michael Leigh, European Commission Director General for Enlargement


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SESSION I Making 2010-2020the Decade ofthe Balkans

All the countries in the Western Balkans are focused on joining the European

Union, began Nikola Gruevski, Prime Minister of the former Yugoslav Republic

of Macedonia. Some are more successful and others less but what is important

is that all the countries are focused in the same direction.

Eduard Kukan MEP and Michael Leigh engaged in conversation with otherspeakers before the summit.


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It is also important to consider the unity of effect that is created across the region

through the process of enlargement, Gruevski added. When the EuropeanCommission announced last October that the former Yugoslav Republic of

Macedonia was ready to open its accession negotiation process, this sent a

positive sign to the other Balkan countries.

The Western Balkans, stated Milo ukanovic, Prime Minister of Montenegro,

is entering a new European phase. All of our countries are now bound by

commitment to maintaining stability of the region and intensifying mutual

cooperation.

The EU membership prospect, continued ukanovic, has had the effect

of creating a better and more stable situation than we have ever seen in our

recent history. This promise has helped to create a culture of peaceful dialogue

within and between the historically divided states of Europes most volatile

region.

In his opening remarks, Eduard Kukan MEP, Chairman of the European

Parliament Delegation to Albania, Bosnia and Herzegovina, Serbia, Montenegro,

Let me paint you a picture of a possible 2020;lets dream a little bit. The feud between Greece andMacedonia over the name issue has been resolved.Bosnia and Herzegovinas government is functioning well.Bilateral relations between Serbia and Kosovo are stableand constructive. The countries in the region are

either celebrating their accession or, at least, knowthe date of the big day for them. What would you callthis picture? Utopia? I would call it a very courageousdream.But this is a dream which could be made a reality.

Eduard Kukan MEP, Chairman of the European Parliament Delegationto Albania, Bosnia and Herzegovina, Serbia, Montenegro, and Kosovo


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and Kosovo, invited the summit to imagine a bright future for the Balkans. Let

me paint you a picture of a possible 2020; lets dream a little bit. The feudbetween Greece and the former Yugoslav Republic of Macedonia over the name

issue has been resolved. Bosnia and Herzegovinas government is functioning

well. Bilateral relations between Serbia and Kosovo are stable and constructive.

The countries in the region are either celebrating their accession or, at least,

know the date of the big day for them. What would you call this picture? Utopia?

I would call it a very courageous dream. But this is a dream which could be

made a reality.

Moderator Giles Merritt, Slovenian Prime Minister Borut Pahor, former YugoslavRepublic of Macedonia Prime Minister Nicola Gruevski, and Republic ofLithuania Minister of Foreign Affairs Vygaudas Uackas engage in lively and

informal debate.


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Stepping stones

Prime Minister ukanovic told the summit that there are three main concernsfrom the point of view of policymakers in the Western Balkans which need

to be acknowledged during the enlargement process. The fi rst is institutional

rehabilitation and institutional building across the region, which still remains a

mixture of problems and solutions (from post-confl ict rehabilitation, institutional

building, international presence and the so-called phenomenon of incomplete

states to the EU integration). These reforms must be handled carefully, as each

case calls for a tailor-made solution. With the Lisbon treatys ratifi cation, the EU

is better placed to provide the support to strengthen what are sometimes weak

and disorganised institutions.


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We have spent the last year focusing more on the economic crisis than on

enlargement, agreed Borut Pahor, Prime Minister of Slovenia, but now thatthe Lisbon treaty is in place, we are better placed to continue with it.

We need to carry out reforms primarily for our own sake, in the best interest of

our citizens, ukanovic continued. But a positive response on the EUs policy of

promoting progress of states according to their performance is helping us work

better, harder and faster. Great strides have already been made in this direction,

as is demonstrated by the achievement of visa liberalisation for Macedonians,

Montenegrins and Serbs.

Finally, but not less important, is the awareness that enlargement fatigue, oras one might call it, fatigue from the EU, could become a pretext or create

a new phenomenon of transition fatigue in the countries of the region, said

ukanovic. We need to allow, as soon as possible, our citizens to live their lives

as they would as citizens of the EU.

It is risky to use enlargement fatigue as a pretext to slow down the enlargement

process, he added, and with this in mind, the Balkan countries need to

implement the necessary reforms to achieve integration sooner rather than

later. Integration in the EU is above all, from our perspective, a guarantee of

Though the revival of nationalism is not entirely behind us, we can see that

the process of democratisation is indeed ahead of us.

Milo ukanovic, Prime Minister of Montenegro


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long- term stability. For this reason the integration of democratic and developed

Balkan states into the EU is in the best interest of all parties involved.

Stumbling blocksOffering the perspective of a European policymaker, Kukan introduced four

major issues facing the Balkans as stumbling blocks to EU accession. Firstly,

he offered, is the issue of the nationalism which has for a long time been a

determining factor in the historical diffi culties which continue to plague the

region.

Patriotism is a fi ne value which can be found throughout the EU member states,

he explained, but it is only healthy patriotism that goes with the EU. Therefore,

the negative aspects of nationalism, such as isolationism and intolerance, need

to be subdued in the political identities of the Western Balkans.

Responding to this, Prime Minister ukanovic offered that the prospect of EU

membership has already resulted in a decline of nationalism and populism in the

politics of the region and that, though the revival of nationalism is not entirely

behind us, we can see that the process of democratisation is indeed ahead of

us.

Secondly, Kukan continued, is the issue of responsible governments and

citizenry. The region needs responsible governments to implement positive

Two of the basic pillars of the OECDs

work are investment and governmentcapacity. There will be no investment if

there is no credibility in the governmentand there can be no real development in

the state without investment.

Aart de Geus, Deputy Secretary General of theOrganisation for Economic Co-operation and

Development (OECD)


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policies and responsible citizens to ensure government accountability. In order

for this process to work, he added, there must be cooperation between all thepartners in civil society.

This notion of governance has an economic impact, contributedAart de Geus,

Deputy Secretary General of the Organisation for Economic Co-operation and

Development (OECD). The OECDs mandate in the region is to facilitate its

economic development, he explained, a large part of which is to attract more

investment.

Jelko Kacin MEP, Vice-Chairman of the European Parliament Delegation to Albania,Bosnia and Herzegovina, Serbia, Montenegro, Kosovo, interacts with the panel

during the question and answer session.


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Two of the basic pillars of the OECDs work are investment and government

capacity. There will be no investment if there is no credibility in the government,he said, and there can be no real development in the state without investment.

If Balkan states can build up their dependable and accountable government

structures, this will add to their economic stability and growth.

A third issue holding back Balkan integration is regional cooperation, elaborated

Kukan. It is diffi cult to speak of cooperation in the region given its painful history,

he ceded, but I believe that the EU can break the cycle. Indeed, as many

participants to the debate pointed out, there have been many good initiatives

to promote regional cooperation in the past few years, including infrastructure

projects, visa liberalisation and the lowering and lessening of trade barriers in

the region.

The European integration experience of the Baltic States shows that the spirit

of cooperation and confi dence is a strong prerequisite f or EU and NATO

membership, contributed Vygaudas Uackas, Minister of Foreign Affairs of

the Republic of Lithuania.

Finally, Kukan concluded, is the issue of promoting good bilateral relations

between the Western Balkan states and the member states of the EU. This is

of critical importance to the future of the integration process but should not beseen as unidirectional.

As the countries in the region move closer towards EU membership, explained

Minister Uackas, we politicians in the EU must remind and remind again about

the peace and stability dividends that membership in the EU provides.

Bilateral issuesThe issue of bilateral relations fi gures highly in any debate on the region.

Problems in this area sometimes have their roots in confl icts that are decades, if

We politicians in the EU must remind and remind again about thepeace and stability dividends that membership in the EU provides.

Vygaudas Uackas, Minister of Foreign Affairs of the Republic of Lithuania


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not centuries, old. For dozens of years, this region has been painted as a volatile

hot spot of political, religious and social unrest and, as a result, there have beenseveral points of contention with its EU member state neighbours.

Overcoming this volatility, agreed many participants, will be one of the major

stepping stones to EU enlargement to the region. If there is one characteristic

of the Western Balkans that creates problems, explained Pahor, it is that there

are too many emotions in the air! He continued his point, saying that the

responsibility of politics is to take these emotions and to place them into a

rational framework where they become an asset and not a liability.

Croatia and Slovenia and Greece and the former Yugoslav Republic of Macedonia

were the two most politically salient disputes that were raised at the summit and

addressed by the panellists. These disputes served to illustrate the positive and

negative sides of the issue of bilateral relations.

Gruevski made an appeal for the cause of his countrys dispute with Greeceover the name Macedonia.

Problems between countries cannot be solved by blackmail, he claimed. We

need to look to the future for a solution which we both want and need. In

the recent period, he added, there have been intensive talks with the parties

involved which seem to offer some promising results for the future. The EU

will be complete, he insisted, when all the members of the Western Balkans

become members.

If there is one characteristic of the

Western Balkans that creates problems, it

is that there are too many emotions in the

air! The responsibility of politics is to take

these emotions and to place them into a

rational framework.Borut Pahor, Prime Minister of Slovenia


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As the only Greek on the panel, co-moderator Nikolaos Tzifakis, Head of the

International Cooperation Department of the Constantinos Karamanlis Institutefor Democracy, responded to Gruevskis statement.

It is not a question of blackmail, he replied, but there have been 14 years of

negotiations on the issue without any obvious results. Greeces policy aims at

generating a momentum for the intensifi cation of the efforts of both parties in

order to reach a mutually acceptable solution to their dispute.

Speaking of the other prevalent bilateral question, the recently resolved border

dispute between Croatia and Slovenia, Prime Minister Pahor suggested that

we must all deal with our bilateral issues sooner rather than later. Finally we

decided that enough was enough, that we would put forth all of our efforts to

resolve the issue in the European spirit.

Thanks in large part to the facilitation by Olli Rehn, European Commissioner

for Enlargement, and the support of Swedish Presidency, as well as the cool

headed politicking of Prime Minister Jadranka Kosor of Croatia, he continued,

Croatias accession process has been unblocked and the country could be

ready to accede as soon as next year.

Stability for the futureWith issues yet to be resolved in the region of the Western Balkans: governance

in Bosnia and Herzegovina, and the question of Kosovos independence, to

There should be no more hesitation.We need further enlargement and weneed it at the fastest possible pace. Thestability of the Balkans is the key issue; if

one corner of Europe is threatened, thenthe whole of the EU is.Nikola Gruevski, Prime Minister of the former

Yugoslav Republic of Macedonia


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name only two; the decision makers in both the EU and Southeast Europe have

been orbiting closer and closer to each other.

There should be no more hesitation, concluded Prime Minister Gruevski, we

need further enlargement and we need it at the fastest possible pace. The

stability of the Balkans is the key issue; if one corner of Europe is threatened,

then the whole of the EU is.

The intertwined political, social and economic realities of the EU and Southeast

Europe call for speedy integration, agreed Prime Minister Pahor. It is up to the

institutions to do as much as possible with the leaders of the region to move

ahead with reforms and complete the acquis communautaire and to support

the Balkans in their accession process, he concluded.

Europe will not be united and unifi ed without the Balkans, concluded Minister

Uackas.

In his closing remarks, Aart de Geus of the OECD told the summit that looking

at the history of enlargement in Europe and the recent history in Southeast

Europe, it gives me hope that more things are possible than we can see right

now. This optimistic point of view was encompassed by the consensus of the

participants at the debate: the future of the Western Balkans lies in Europe.


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The summit welcomed an audience of over 300 concerned

stakeholders, including high-level decision-makers, policyexperts and business leaders from Southeast Europe andthe European Union, and international press.


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SESSION II Strengtheningownership: promotingregional cooperationand enhancing localcapacities

When it comes to regional cooperation in the Western Balkans, began co-

moderator Tim Judah, Western Balkans Correspondent for The Economist,

it is important to realize that in the past months, there has been much more

happening than it appears to the outside world.

One of the ironies is that a lot of what the Regional Cooperation Council (RCC)

is doing is the bread and butter of modern life. The issues tackled are boring,

so journalists dont report on it. This, however, does not mean that there is no

progress, he insisted.

In fact, Judah said, the question of the Western Balkans is much like a

rollercoaster; positive steps in the integration process create a feeling of

momentum which propels the leaders in the region to push for what needs to

be done.

Boidar elic, Deputy Prime Minister of Serbia, commented on the Balkan

states lack of power to pursue regional initiatives. The Western Balkans should

be empowered to collaborate more. If one looks closely, one sees that there isnot that much empowerment there, he asserted.

The region of the Western Balkans needs to take this matter into its own hands,

he continued. We in the region need to earn our empowerment by working

more, and more closely, so as to present concrete proposals that the European

Union can understand; in order to work as Europe works.

Co-panellist Hido Bicevic, Secretary General of the Regional Cooperation

Council (RCC), supported elics assessment. The essential mission, he said,


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is to form regional cooperation in the context of Europe. This is a testing ground

for future cooperation in the broader context of the European Union.

There is a strong link between the enlargement process and regional

cooperation, agreed Georgios Koumoutsakos MEP, Member of the European

Parliament Committee on Transport and Tourism and Substitute Member of the

Committee on Foreign Affairs. Enlargement is synonymous with democracy

and reform and this is what the countries of the Western Balkans need.

Promoting regional cooperationThe reality, said Bicevic is that prior to the inception of the RCC in 2007,

decisions on issues in the region had always been made by outsiders. The RCC

has taken steps towards consolidating the integration process and bringing it

under local ownership.

There have been great advances in the region during the recent period, Bicevic

continued, but the network of remaining open issues needs to be addressedand resolved in order not to obstruct the road ahead.

The substance of the RegionalCooperation Council is that, forthe first time in modern history,the countries of the Western

Balkans have decided to take thiscooperation into their own hands.

Hido Bicevic, Secretary General of the RegionalCooperation Council (RCC)

Enlargement is synonymous with democracy and reform and this iswhat the countries of the Western Balkans need.

Georgios Koumoutsakos MEP, Member of the European Parliament Committee on Transport andTourism and Substitute Member of the Committee on Foreign Affairs


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In his keynote address, Boidar elic offered that the best advice I have ever

received in the area of European integration was to start behaving as if youwere already a member of the European Union.

With this advice in mind, he proposed 6 important areas in which the region

should cooperate in order to demonstrate a commitment to the European

framework and the regions alignment with broader European values. These

are:

1. Collaboration in the fi ght against organised crime, fraud and corruption2. Developing the road, rail, river transport community of Southeast Europe

3. Involvement in the Danube Strategy alongside EU member states

4. Inclusion and recognition of the Roma population

5. A proposed conference in Sarajevo in May to discuss refugees and internally

displaced persons (IDP)

6. Working constructively to promote a knowledge economy and combat the

brain drain of the region

If we can deliver on this exciting regional agenda, I think we will be able to elicitmuch more support from the European Union and its partners, he concluded.

The best advice I have ever received in the area of European

integration was to start behaving as if you were already a member

of the European Union.

Boidar elic, Deputy Prime Minister of Serbia


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We are looking for accelerated economic development with a focus on energy,

infrastructure and transportation reforms, confi rmed Bicevic, speaking for theRCC.

Pierre Mirel, European Commission Director for Albania, Bosnia & Herzegovina,

Montenegro, Serbia, and Kosovo Issues in the Directorate General for

Enlargement, agreed substantially with this agenda, emphasising that the

countries in the region need to move away from nice statements to a process

of genuine cooperation.

Mirel continued, explaining the European Commissions support for several of

the initiatives mentioned by elic. He offered the example one of many of

the recent launching of the Western Balkans Investment Framework wherebythe Commission, international fi nancial institutions (IFIs) and other donors will be

the fi rst to co-fi nance projects, and in particular infrastructures. This investment

compact is an important step towards strengthening economic and trade ties

between Southeast Europe and the EU.

The Danube Strategy, which itself aims to deepen and expand cooperation

between the countries through which the Danube River fl ows, is a great,

concrete project for the region. History has taught us that trade and investment

are great avenues towards reconciliation, Mirel noted. To be able to move

The Danube Strategy is a great,concrete project for the region.History has taught us that tradeand investment are great avenuestowards reconciliation. To be ableto move forward successfully in

the Western Balkans, one has toovercome the legacy of the past.

Pierre Mirel, European Commission Director forAlbania, Bosnia & Herzegovina, Montenegro,Serbia, and Kosovo Issues


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forward successfully in the Western Balkans, one has to overcome the legacy

of the past.

Is cooperation enough?elics optimism on the future of regional cooperation was not shared by all

of his co-panellists. We see with some sorrow that cooperation in the region

does not work and is not strong enough, lamented Ingeborg Grssle MEP,

Member of the European Parliament. Membership in the EU is not a beauty

contest, she said. If we cannot maintain the legal community, it is game over

for the EU.

She urged a re-evaluation of the European Commissions enlargement machine,

in particular the apparently lax anti-corruption and anti-fraud mechanisms, which

she blamed for the premature accession of Bulgaria, a country still plagued by

rampant corruption. The EU is not working properly right now, she asserted.

Session II moderators Tim Judah, Western Balkans Correspondent for

The Economist, and Giles Merritt, Secretary General ofFriends of Europe.


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We cannot accept countries that cannot apply the acquis communautaire.

She called for caution in the integration process of the Western Balkans and formore oversight and involvement from the European institutions.

If we do not work seriously with the countries in questions and if the European

Commission does not intervene to work more with them, Grssle concluded,

we will end up with the same situation we have seen in Bulgaria.

Responding to Grssle,Vladimir Drobnjak, Chief Negotiator for EU Accession

Negotiations in the Ministry of Foreign Affairs and European Integration of

Croatia, told the participants that the enlargement process has been refi ned

following the accession of Romania and Bulgaria in 2007. The process is much

more diffi cult now, he said, and new benchmarks will ensure that countries

planning to enter the EU will be 100% ready.

Reacting to Grssle, Mirel underlined the overall good track record of acquis

implementation by the 10 new member states. The EU is functioning wellfollowing their admission, he said.

The basic strategic needs of the region call for a persistence from both sides

of the enlargement process to continue the momentum after the proposed

integration of Iceland and Croatia next year, added Bicevic.

The enlargement process is a diffi cult road to travel down, confi rmed

Koumoutsakos, and the countries of the Western Balkans need guidance to

navigate it. However, he continued, it must be admitted that the EU has notalways sent an encouraging message.

Membership in the EU is not

a beauty contest. If we cannot

maintain the legal community,

it is game over for the EU.

Ingeborg Grssle MEP, Member of the EuropeanParliament


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The message most frequently broadcast in the previous period has been a

warning of enlargement fatigue; of the very long and diffi cult path towardsinstitutional reform, he added by way of clarifi cation. There has been suspicion

from the region that focus on regional cooperation by EU institutions is a tactic

to replace full accession, leading many countries to feel that the Thessaloniki

Agenda for the Western Balkans had been abandoned.

Enlargement is not just a political process but a technical and legal one as well.

And it is in the technical and legal framework that regional cooperation will bear

fruit.

However, countered Drobnjak, with Croatias recent successes in the accession

process, the European Commission Directorate General for Enlargement is

sending a strong message of encouragement that internal reforms and adherence

to the Thessaloniki Agenda are successful steps towards integration.

Enlargement is not just a political process but a technical and legal one as

well, he added, and it is in the technical and legal framework that regional

cooperation will bear fruit.

Enlargement is not just a political process but a technical

and legal one as well. And it is in the technical and legal

framework that regional cooperation will bear fruit.

Vladimir Drobnjak, Chief Negotiator for EU Accession Negotiations inthe Ministry of Foreign Affairs and European Integration of Croatia


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The morning plenary sessions were followed by an economicroundtable that explored what the future will hold for Balkaneconomies.


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SESSION III Do the economic stormclouds have a silverlining for the Balkans?

The plenary sessions were complemented by an economic roundtable during

which over 60 senior discussants gathered to discuss the future of economic

recovery and reform in the region.

Opening the fi rst roundtable session, co-moderatorAlistair Nolan, Head of the

Investment Compact for South East Europe at the Organisation for Economic

Co-operation and Development (OECD), provided a snapshot of the economic

situation in Southeast Europe.

Economic growth in the Western Balkans was strong up until the third quarter

of 2008, he began, but by early 2009 many economies in the region had gone

into recession. This recession was an imported crisis, he continued, a result of

the global economic downturn.

We actually see that the impact of the crisis in the Western Balkans seems

closely related to the degree of integration of the different economies with the

Eurozone markets, Nolan asserted. The impact was therefore most severe in

Croatia (as well as member states Romania and Bulgaria), while Albania has

been less severely affected and, along with Kosovo, is projected to achieve

growth in 2009.

Summarising the effects of the global economic downturn, Nolan told the

participants that the crisis has exposed the fl aws of a growth model which did

lead to high rates of growth from 2000 to 2007; but this growth was based on

rapid expansion of credit and on increases in domestic consumption rather than

investment of the best sorts.

Really what the crisis has underlined is something that has to do with the

regions broader competitiveness, the regions ability to pay for itself in the globalmarketplace, Nolan concluded.

Afternoon: Economic Roundtable


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Improving government involvement

In his opening remarks, introductory discussant Tim Brett, President of theAlpine and Adriatic Business Unit of The Coca-Cola Company, highlighted the

importance of economic growth for the region. The speed at which the countries

of the Western Balkans can join the EU depends in part on the continued growth

of the areas economies.

If the crisis can be seen to have a silver lining, contributed discussant Sandra

Bloemenkamp, Manager of the Europe and Central Asia Unit at the World Bank,

it is that we have seen a number of governments in Southeast Europe looking

with renewed interest towards how to better manage their economic needs.

The roundtable agreed that there are a number of areas in which reforms are

needed. The fi rst thing we have to focus on is productivity, said Tim Brett. As

in business, there is probably room for improvement regarding how each of the

local authorities optimise their resource allocation.

This could be instrumental in cutting the amount of waste incurred by corruption

in government structures, agreed Muhamet Mustafa, President of the Institute

for Development Research (RIINVEST), Kosovo-UNMIK. The main problem

with doing business in the Balkans is the corruption, he asserted, adding

that the solution to this problem lies in the reforms outlined in EU Stability and

Association Agreements (SAA) and the greater accession process.

The Albanian authorities have shown another way to improve productivity in

government processes, added Genc Pollo, Minister of State for Reforms and

The speed at which the countries ofthe Western Balkans can join the EUdepends in part on the continued growthof the areas economies.

Tim Brett, President of the Alpine and Adriatic BusinessUnit of The Coca-Cola Company


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Relations with the Parliament of Albania. The country has recently adopted the

implementation on a massive scale of information technology in its ministries andadministrative structures. This has created a major enhancement in government

capabilities and less corruption, he said.

Another key area where governments need to be involved is in competitiveness,

alleged Brett, claiming that the longer it takes us in the Balkans to improve

overall competitiveness within countries and regions, the slower the process of

economic growth will be.

Reforms must be implemented throughout the region to make it competitive

in global markets, he continued. This could take the form of tax reforms and

legislation to generate a more level playing fi eld for companies wanting to enter

Balkan markets.

To support this idea, Brett provided the example of juice nutritional labelling

legislation in Serbia. The Coca-Cola Company, after acquiring a Serbian juice

company in 2006, found that the regulatory framework and capacity governing

juice labelling and production control were not up to EU and international

standards. This seemingly insignifi cant factor was creating an uneven advantage

for free riders putting products with questionable quality on the market, so the

company called the Serbian governments attention to the problem, which

promptly resolved it.

I was astonished at the speed of the governments actions on the matter,

Brett recounted, stressing the need for government involvement in matters of

competitiveness. He presented this issue as an important indication of promise

for the regions broader competitiveness on the global level.

The notion of competition should not be taken too far, warned discussant Will

Bartlett, Senior Research Fellow at the London School of Economics, United

Kingdom. There is a danger of competitiveness of tax regimes across the

region, he said; the countries of the Western Balkans need to become more

competitive with other regions in global markets, not with themselves. In order

to attract more foreign investment, the Balkan countries need to foster regional

cooperation on these issues, possibly within the framework of the Central

European Free Trade Agreement (CEFTA).


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Promoting investment through a better

business environmentWe are only valid as a region of 55 million people, explained discussant Ivan

Vejvoda, Executive Director of the Balkan Trust for Democracy of the German

Marshall Fund of the United States in Belgrade. In a region of this size, cooperation

on regional infrastructure projects with the goal of attracting investment should

be a key element of the economic growth model, he added.

Alistair Nolan supported this idea, stressing that the relationship between the

economy, business, regional cooperation and EU integration is very important;

therefore these elements must not be separated.

The fi scal crisis, which has been created by a decrease in tax receipts and

an increase recession-associated public spending, remains a risk to economic

recovery in the region, Nolan told the roundtable. This fi scal crisis, he asserted,

limits the room for manoeuvre for further government spending.

Minister Pollo disagreed with Nolans interpretation. Albania was the only

country with positive growth, he reiterated. This may be partly explained by

the implementation in 2008 of a fl at tax of 10% on corporate earnings and

income alike.

Rather than decreasing government spending, he continued, these tax cuts

had the double effect of improving the business environment and reducing tax

evasion in Albania, which has kept government revenues at a sustainable level.

Representing The Coca-Cola Companys business interests in the region, Tim

Brett showed support for decreases in taxation. Taxation and social obligations

structure and levels can be a deciding factor in whether or not to invest in theregion, he said.

Although the country made huge strides in the EU accession process, the

percentage of personal income which goes towards taxes and social obligations

in Croatia, for example, is amongst the highest in the Western Balkans and

considerably higher than in many EU member states, he explained. Therefore,

governments should not look towards augmenting business and consumer

burden as a way to increase revenues but instead should work towards creating

a more inviting environment to attract foreign and domestic investment.


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There is no golden rule that says that companies have to invest in an area which

creates 1.5% of European GDP, concluded Brett. However, if the regionsgovernments continue to improve the business environment, I believe that there

is a huge possibility for increasing investment in the Balkans.

Educational and social reforms: a long-term perspectivePeace and education are the keys for development in the region, asserted

introductory discussant Dusan Sidjanski, Professor Emeritus at the University

of Geneva and Special Advisor to the President of the European Commission.

Development in these areas will lead to stability, which in turn will lead to

economic growth, he elaborated.

One of the greatest stumbling blocks to social reform in the Western Balkans

is the question of national identity and the nation-state, continued Sidjanski.

It seems that many want to have a nation-state with an ethnic or cultural

majority dominating. This is not in line with the European concept of respect for

minorities. For long-term economic growth, it is important to increase positive

relations between the different ethnic and cultural groups in the region.

According to Sidjanski, identity is built through the opposition to other former

Yugoslav republics rather than in cooperation with them. This is shown, for

Peace and education are the keys for development in the region.

Dusan Sidjanski, Professor Emeritus at the University of Geneva andSpecial Advisor to the President of the European Commission


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example, in the effort to create different offi cial languages corresponding to

the new states in the Balkans yugospace: Serbian, Croatian, Bosniak andMontenegrin, as opposed to one common Serbo-Croatian language.

Respect for minorities is an issue that Kosovo takes very seriously, argued

Ahmet Shala, Minister of Finance and Economy of Kosovo (under UNSCR 1244).

All minorities are represented in the parliament and, on average, 4.8 times more

funding goes towards minority groups than to the majority, he continued.

We have taken this on, not only as an obligation to the EU, but based on

their own merits, he concluded. This even treatment of minority issues by the

hotly contested Kosovar Parliament demonstrates the dedication of some in the

Western Balkans to European ideals.

The fundamental problem in the Western Balkans is the use of cultural identity as

an instrument for policymaking, insisted Sidjanski, citing the passion speakers

in earlier sessions showed while discussing certain bilateral issues. This cultural

prejudice must be excised from social identities in the region, beginning with a

restructuring of the education system, he added.

Financing educational reform has been addressed in the greater discussion on

Balkan integration, the roundtable heard, but there has been less focus on the

substance of what should be taught. I am sure that the EU should place more

importance in education, Sidjanski affi rmed. It is between the ages of 3 and

10 that children begin to assimilate basic concepts and prejudices, so primary

education is fundamental. The way in which national history and literature

are taught is symptomatic, he continued. He suggested that the "Hands On"

We all agree that teaching young children

that your neighbours are your friends is

the best way to build sustainable peace.

Genc Pollo, Minister of State for Reforms andRelations with the Parliament of Albania


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method of introduction to science (by Nobel Prize laureates Leon Lederman and

Georges Charpak) being progressively used in the European Union under thename of Pollen should be extended in the region. It is a way of teaching science

by experiments and logic, which has a positive secondary effect: learning to

argue but also to respect the opponent. It is therefore a means for youth to be

initiated to democracy.

We all agree that teaching young children that your neighbours are your friends

is the best way to build sustainable peace, confi rmed Genc Pollo. The Council

of Europe, he continued, has taken steps to institutionalise these attitudes by

Over 60 senior discussants were present to debate the economic realities

facing the Balkans.


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publishing histories which treat the many cultural issues in the region more

calmly and evenly.

We must elaborate a commonly agreed upon history of the region, as did

Germany and France following World War II, Sidjanski explained. Investing in a

tolerant treatment of the shared history of the Western Balkans will, in the long-

term, lead to more tolerant treatment amongst the populations which will in turn

lead to more cooperation and regional integration and a further alignment with

the attitudes of the European Union.

More tolerance in primary education is a big step towards peace and stability in

the region, but how strong is the connection between education and economic

growth? Alistair Nolan mentioned a study undertaken by the OECD, the


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Programme for International Student Assessment (PISA), which covered three

economies in the region in 2006 and provided an overview of quality of initialeducation.

The results showed that two of the economies have scores which put them

far behind the OECD averages. In fact, were they able to bridge that gap, they

would have signifi cantly better growth rates of up to 2% higher GDP.

The silver lining a final wordIn his closing remarks, co-moderator Alistair Nolan addressed the question of

whether or not there is a silver lining in the economic outlook for the Western

Balkans. If there is a silver lining, he said, it is not the kind of silver lining that

we want. One problem with the economic crisis, he elaborated, is that it could

serve to shorten the time horizons within which policymakers think.

The kind of investments that we have been talking about to upgrade productivity

and competitiveness are long gestating investments, he explained. They

require long term investments in education and infrastructure. Even though

reforms in the region have progressed, what the crisis has illuminated is the

incongruity between the time required to secure positive reform and the time

available for the same.

There is a mismatch between what exists on paper and what exists in the real

world, Nolan concluded. Most of the countries in the region have robust legal

frameworks but enforcement is still very weak. The problem is in the capacities

required to effect implementation. Faced with the twin problems of shortened

timeframes and limited government capacity, it is likely that economic growth

in the Western Balkans will continue to be fraught with diffi culties in the comingyears.


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SESSION IV The challenge ofinfrastructure: canBalkan states shareprojects?

Co-moderator Giles Merritt, Secretary General ofFriends of Europe, opened the

fi nal session by saying that the whole issue of infrastructure will be a deciding

factor in the inclusion of the Balkan countries in the European economy. The

regions ability to innovate and the mobility of their labour forces will depend on

the sort of infrastructure that they are able to build.

The infrastructure needs are daunting and will need signifi cant investment over

time, acknowledged introductory discussant Peter Sanfey, Lead Economist in

the Offi ce of the Chief Economist of the European Bank for Reconstruction and

Development (EBRD). Yet it remains to be seen from where this investment will

come, even as initiatives are being developed by the public and private sectors

as well as international fi nancial institutions (IFIs) such as the EBRD.

As had been mentioned throughout the summit, the future of the Western

Balkans lies with integration into the European Union but, while part of this

integration process requires the implementation of social and political reforms

in the respective countries, introductory discussant Dirk Lange, European

Commission Head of Unit for Croatia in the Directorate General for Enlargement,

explained that it is clear that there is a need for a physical connection with the

EUs infrastructure.

The infrastructure needs are daunting and will needsignificant investment over time.

Peter Sanfey, Lead Economist in the Offi ce of the Chief Economist ofthe European Bank for Reconstruction a


44/64


The concept of regional cooperation holds particular relevance to the issue of

infrastructure projects but, as participants at the summit heard throughout theday, the question of relations between Balkan states raises doubts about their

capacity to work together.

The need to strengthen ties in the Western Balkans was underlined byAhmet

Shala, Minister of Finance and Economy of Kosovo (under UNSCR 1244), who

told the roundtable that the region must cooperate to fi nd the most rational way

of pushing aside all physical and bureaucratic barriers, leaving aside whatever

differences and historical background we may have.

Private-public partnershipsReferring to business interests in the Balkans, Peter Sanfey told the participants

that the regions poor infrastructure creates obstacles to investment.

When we ask businesses what are the main obstacles they face, he explained,

we fi nd that the perceived diffi culty of infrastructure has gone up signifi cantly in

the last few years. We need to work to improve this.


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One oft-cited avenue to increase the attractiveness of the region is private-public

partnerships (PPP), offered Alistair Nolan. However, these types of partnershipsare likely only in cases of small-scale infrastructure projects. Even in the US,

he added, where private sector investment is the most advanced, only about

1% of the entire road network is toll roads.

Mr. Nolan is right to be sceptical that PPP can solve all the problems of

infrastructure, agreed Peter Sanfey, adding that the public sector is going to

need to have a strong involvement in the improvement of infrastructure in the

coming years but we think that there is scope for further development of well-

designed PPP. They are not easy to achieve, but there are some successes

across the region that can be built on.

The EBRD and other IFIs can help facilitate private sector involvement, Sanfey

continued. A focus on regional integration, on projects that facilitate cross-

border trade and investment would be a natural complement to other initiatives

that have taken root in recent years, for example the CEFTA agreement which

is lowering trade barriers. But you can only go so far in trade agreements if the

infrastructure isnt there to facilitate trade, he admitted.

Developing infrastructure through regional cooperationAhmet Shala, in his opening remarks, explained that, considering the size of

the markets in the Western Balkans when compared with, for example, China,

it is very diffi cult to convince business to come invest in the region.

These are relatively small countries we are talking about in terms of scope

and population, agreed Dirk Lange. There is a common need for regional

coordination if the infrastructure is to help economic development.

I fi nd the fi gures alarming, opined Giles Merritt. The World Bank estimates

that the Western Balkans will need to spend 27 billion euros over the next ten

years to develop energy and environmental projects alone. This fi gure is liable to

be dwarfed by investments needed in transport and communication.

The European Commission has already committed 4 billion euros to the region

for the period of 2007 to 2011 through the Instrument for Pre-accession

Assistance (IPA), Dirk Lange explained, allowing that this amount falls far shortof the numbers needed to effect the necessary changes.


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What we try to do with the IPA support, he elaborated, is to help the

countries to draw from other IFIs to implement the Western Balkans InvestmentFramework (WBIF).

The WBIF, launched in early December of this year, will serve to coordinate

different sources of fi nancing for infrastructure development projects that

specifi cally support regional cooperation.

Discussant Dominique Courbin, Head of the Western Balkans Division at the

European Investment Bank (EIB) explained that the process of pooling of

resources that will be generated by the Western Balkans Investment Framework

is important because it builds on the long-standing cooperation of the European

Commission, EIB, EBRD and the Central European Bank (CEB) in supporting

projects in the Western Balkans.

A stumbling block to the work of the WBIF will be establishing government

policy oriented to a regional approach, asserted discussant Dragomir Markovi,

General Director of Electric Power Systems, Serbia.

There are a large number of proposed joint energy projects in the region, he said,

listing off fi ve to demonstrate the point, but promoting regional interests over

national interests is a very sensitive task for the mostly coalition governments

in the region.

Kosovar Minister Shala also voiced concerns about the Balkan states

willingness to work together. Kosovo, given enough time, will build roadways

connecting Pristina to Albania but how can we be sure these roads will be

Kosovo, given enough time, will build roadwaysconnecting Pristina to Albania but how canwe be sure these roads will be continued?

Considering Serbias attitude towards Kosovo,will they hold up their end of the bargain?We just dont know.

Ahmet Shala, Minister of Finance andEconomy of Kosovo (under UNSCR 1244)


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continued? Considering Serbias attitude towards Kosovo, will they hold up

their end of the bargain? We just dont know, he concluded.

Slavica Penev, Senior Research Fellow at the Economics Institute in Serbia,

contradicted her fellow discussants, telling the roundtable that it was agreed at

the Euromoney Conference in Dubrovnik in October that infrastructure projects

in the region are one of the fi rst priorities for the countries in the region. It is

up to the EBRD and other IFIs to support these plans, but the readiness of the

region should not be doubted.

Initiatives to support regional cooperation are of central importance to the

greater economic development of the region, agreed Dirk Lange. The countries

in the Western Balkans have to share projects otherwise they are doomed to

fail, he said.

Regional cooperation and EU integrationSpeaking from the perspective of the EBRD, Peter Sanfey introduced a challenge

to improved funding of regional initiatives for infrastructure development, namely

the reform defi cit found in the EU integration processes of the Western Balkan

states.

Looking at reform objectives across the region, he explained, we have found

that three countries: Albania, the former Yugoslav Republic of Macedonia and

Montenegro stand out, not just for having a need for better quality roads and

railways, but also for having a big reform defi cit.

Though there is less of a defi cit in reforms in the other countries in the region,

overall they are still far behind the EU member states known for their poorinfrastructures, namely Poland, Hungary and Romania. This issue is being

addressed by the EBRD, Sanfey concluded.

If we are to speak about infrastructure, said Dirk Lange, let me mention the

obvious point of view: the Western Balkans is surrounded by member states. It

is clear that there is a need for a connection with EU infrastructure.

An initiative showing some promise in the area of improving this connection

is the South East European Transport Observatory (SEETO), he added. This


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project is designed to aid the development of the main transport connections

in the area.

Let me mention the obvious point of view: the Western Balkans is surrounded

by member states. It is clear that there is a need for a connection with EU

The goals of SEETO underline the greater aim of European integration for the

region, continued Lange. It is clear that it is not only suffi cient to design the

main transport connections but that it is also necessary to harmonise technical

specifi cations in many areas. This harmonisation can best be carried out in

the framework of the acquis communautaire which promotes standardisation

across the EU member states.

Aligning their infrastructural advances with the EUs existing standards will

serve the purpose of bridging both the physical and legislative gaps that

currently exist between the European Union and its inner courtyard.

We are the inner courtyard of Europe and NATO, concluded discussant

Ivan Vejvoda with considerable optimism. The fact of being straitjacketed,

in a positive way, means that there is really no direction but forward for the

development of the region.

Let me mention the obvious point of view: the Western Balkans

is surrounded by member states. It is clear that there is a need

for a connection with EU infrastructure.

Dirk Lange, European Commission Head of Unit for Croatia in theDirectorate General for Enlargement


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There are serious intentions in the region to recognise that they need to

harmonise their legal systems, agreed discussant Slavica Penev, not only forthe EU accession process but also to have a chance to compete in global

markets.

Competing in global markets is the economic endgame for the region,

concluded Ahmet Shala at the end of the roundtable discussions. For the

Western Balkans, this means working together all the way up to the European

level. The European Union is competing with other global giants and we all need

to work together to make Europe as competitive as we can.marketplace,

Nolan concluded.

Dirk Lange commenting on the importance of a shared infrastructure in theregion.


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ANNEX I - List of Discussantsand Speakers

Jan Andersson, Member, National

Parliament, Sweden (Riksdag),

Committee on Industry and Trade

Ihsan Atalay, Vice President, Project

& Corporate Finance, Aktif Bank,

TurkeyWill Bartlett, Senior Research Fellow,

London School of Economics, United

Kingdom

Hido Biscevic, Secretary General,

Regional Cooperation Council, Bosnia

and Herzegovina

Sandra Bloemenkamp, Manager

Europe and Central Asia Unit,

The World Bank

Henri Bohnet, Resident

Representative in the former Yugoslav

Republic of Macedonia, Konrad-

Adenauer-Stiftung (KAS)

Former Yugoslav Republic of

Macedonia Offi ce

Tim Brett, President of the Alpine and

Adriatic Business Unit, The Coca-Cola Company, Austria

Geert Cami, Co-Founder & Director

Friends of Europe, Les Amis de

lEurope

Branislav Canak, President,

Nezavisnost, Serbia

Bratislav Ceperkovic, President of

the Managing Board, Transnafta,

Serbia

Armand Clesse, Director,

Luxembourg Institute for European

and International Studies

Marije Cornelissen, Member,

European Parliament: Delegation to

Albania, Bosnia and Herzegovina,Serbia, Montenegro, Kosovo

Dominique Courbin, Head of

Division - Western Balkans, European

Investment Bank (EIB)

Aleksandar Damjanovic, Chair of

the Committee of Economy, Finance

and Budget, National Parliament,

Montenegro

Aart Jan de Geus, Deputy Secretary-

General, Organisation for Economic

Co-operation and Development

(OECD)

Bozidar Djelic, Deputy Prime Minister

for EU Integration, Serbia

Milo Djukanovic, Prime Minister,

Montenegro

Zoran Drakulic, President, East PointHolding, Serbia

Vladimir Drobnjak, Chief Negotiator

for EU Accession Negotiations,

Ministry of Foreign Affairs and

European Integration, Croatia

Milka Forcan, Vice President,

Delta Holding, Serbia

Nathalie Furrer, Director, Friends of

Europe, Les Amis de lEurope


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Andreas Galanakis

Ingeborg Grssle, Member,European Parliament

Nikola Gruevski, Prime Minister,

Former Yugoslav Republic of

Macedonia

Vuk Hamovic, Group Chairman,

Energy Financing Team (EFT), Serbia

Andreja Jerina, State Secretary,

Ministry of Foreign Affairs, Slovenia,

Government Offi ce for Developmentand European Affairs

Zeljko Jovanovic, Chair, National

Parliament, Croatia, National Council

for Monitoring Anti-Corruption

Strategy Implementation

Tim Judah, Western Balkans

Correspondent, The Economist

Georgios Koumoutsakos, Member,

European Parliament: Committee onTransport and Tourism

Eduard Kukan, Chairman, European

Parliament: Delegation to Albania,

Bosnia and Herzegovina, Serbia,

Montenegro, Kosovo

Dirk Lange, Head of Unit for Croatia,

European Commission: Directorate

General for Enlargement

Michael Leigh, Director General,

European Commission: Directorate

General for Enlargement

Robert Manchin, Chairman and

Managing Director, Gallup Europe

Dragomir Markovic, General

Manager, PE Electrical Power

Industry of Serbia

Dragica Martinovic, Director,

Croatian Chamber of Economy,Brussels Offi ce

Giles Merritt, Secretary General,

Friends of Europe, Les Amis de

lEurope

Srdjan Mihajlovic, General Manager

of Public Enterprise, Transnafta,

Serbia

Miroslav Miletic, Chief Executive

Offi cer, Bambi-Banat, SerbiaPierre Mirel, Director for Albania,

Bosnia & Herzegovina, Montenegro,

Serbia, Kosovo Issues, European

Commission: Directorate General for

Enlargement

Hedvig Morvai-Horvat, Executive

Director, European Fund for the

Balkans, Serbia

Muhamet Mustafa, President,Institute for Development Research

(RIINVEST), Kosovo-UNMIK

Alistair Nolan, Head of the

Investment Compact for South East

Europe, Organisation for Economic

Co-operation and Development

(OECD)

Borut Pahor, Prime Minister, Slovenia

Genc Pollo, Minister of State for

Reforms and Relations with the

Parliament of Albania, Offi ce of the

Prime Minister, Albania

Viola Puci, Executive Director,

Albinvest, Albania

Goran Radman, Chairman, Business

Advisory Council for South East

Europe, Greece


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Blerimh Reka, Ambassador, Mission

of the former Yugoslav Republic ofMacedonia to the EU

Peter Sanfey, Lead Economist in

the Offi ce of the Chief Economist,

European Bank for Reconstruction

and Development (EBRD), United

Kingdom

Goran Saravanja, Chief Economist,

Zagrebacka Banka, Croatia

Ahmet Shala, Minister, Ministry ofFinance and Economy, Kosovo (under

UNSCR 1244)

Dusan Sidjanski, Professor Emeritus

and Special Advisor to the President

of the European Commission,

University of Geneva, Switzerland

Branko Stefanovic, Founder and

Chairman of the Board of Governors,

Vern University of Applied Sciences,Croatia

Margo Thomas, Regional Programme

Coordinator, Foreign Investment

Advisory Service, Serbia

Osman Topcagic, Ambassador,

Mission of Bosnia and Herzegovina

to the EU

Lidija Topic, Advisor, Regional

Cooperation Council, Brussels Liaison

Offi ce

Nikolaos Tzifakis, Head of

the International Cooperation

Department, Constantinos

Karamanlis Institute for Democracy

(CKID), Greece

Vygaudas Usackas, Minister, Ministry

of Foreign Affairs, Lithuania

Ivan Vejvoda, Executive Director,

The German Marshall Fund of theUnited States, Serbia, Balkan Trust

for Democracy

Per Vinther, President, Association of

the Local Democracy Agencies, Italy

Matjaz Vrcko, Secretary, International

Affairs Directorate, Ministry of

Transport, Slovenia

Peter R. Weilemann, Director of the

European Offi ce, Konrad-Adenauer-Stiftung (KAS), Brussels Offi ce

Franc Zlahtic, Head of Unit, Ministry

of Economy, Slovenia

Gordana Zrnic, Director, Chamber

of Commerce and Industry of Serbia,

Brussels Offi ce


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ANNEX II - Programme

MORNING: PLENARY SESSIONS

08.30 09.00 Welcome & Registration of Participants

09.00 09.15 WELCOMEADDRESS by Peter R. Weilemann, Director of theEuropean Offi ce of the Konrad Adenauer Stiftung

OPENINGADDRESS by Michael Leigh, European Commission

Director General for Enlargement

SESSION I MAKING 2010-2020 THE DECADE09.15 11.00 OF THE BALKANS

In some ways the Balkans are teetering on the edge of a breakthrough thatcould transform the region economically and socially. But the first hurdleto be overcome is political, for today's early signs of a new democraticmaturity have yet to be turned into moderate and constructive political

processes that reject all forms of nationalism. How can the rule of law andthe fight against corruption be strengthened? And in light of the EU's moodof enlargement fatigue, what should Brussels be doing to maintain the paceof reform in Balkan countries whose membership prospects seem to bestagnating?

Aart de Geus Deputy Secretary General of the Organisation forEconomic Co-operation and Development (OECD)

Milo ukanovic Prime Minister of MontenegroNikola Gruevski Prime Minister of the former Yugoslav Republic of

MacedoniaEduard Kukan MEP Chairman of the European Parliament Delegation to

Albania, Bosnia and Herzegovina, Serbia, Montenegro,Kosovo

Borut Pahor Prime Minister of SloveniaVygaudas Uackas Minister of Foreign Affairs of the Republic of Lithuania

Moderated by Giles Merritt, Secretary General of Friends of Europe, andNikolaos Tzifakis, Head of the International Cooperation Department of theConstantinos Karamanlis Institute for Democracy

11.00 11.30 Coffee Break


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SESSION II STRENGTHENING OWNERSHIP: PROMOTING11.30 13.00

REGIONAL COOPERATION AND ENHANCINGLOCAL CAPACITIES

The European Union's Stabil isation and Association Agreements havecontributed to a significant shift in Balkan countries' relationships with theEU; today they are partners, whereas a decade ago they were more likeBrussels' subjects. But if the western Balkan states are to take ownership ofthe stabilisation process they must develop and greatly intensify their regionalcooperation. With this in mind, has the new Balkan-administered RegionalCooperation Council become an efficient instrument? To what extent could

the EUs upcoming Danube Strategy enhance regional cooperation? Whatare national governments in the Balkans doing to encourage local decisionmaking and a far stronger application of the EU's subsidiarity principle?What sort of benchmarking could ensure that civil society plays a greaterrole in all countries that aspire to eventual EU membership?

KEYNOTEADDRESS by Boidar elic, Deputy Prime Minister of Serbia

Hido Bievic Secretary General of the Regional CooperationCouncil

Vladimir Drobnjak Chief Negotiator for EU Accession Negotiationsin the Ministry of Foreign Affairs and EuropeanIntegration of Croatia

Ingeborg Grssle MEP Member of the European ParliamentGeorgios Koumoutsakos MEP Member of the European Parliament

Committee on Transport and Tourism andSubstitute Member of the Committee onForeign Affairs

Pierre Mirel European Commission Director for Albania,Bosnia & Herzegovina, Montenegro, Serbia,and Kosovo Issues in the Directorate Generalfor Enlargement

Co-moderated by Giles Merritt, Secretary General ofFriends of Europe, andTim Judah, Western Balkans Correspondent for The Economist

13.00 14.00 Networking Lunch


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AFTERNOON: ECONOMIC ROUNDTABLE

SESSION III DO THE ECONOMIC STORM CLOUDS HAVE09.15 11.00 A SILVER LINING FOR THE BALKANS?

The figures make gloomy reading; the Balkans' economic buoyancy,averaging 5% growth in recent years, has been abruptly shattered by thecrisis. No longer boosted by the magnet of privatisation profits, foreigndirect investment (FDI) has slowed to a trickle in most Balkan countries andthere have also been slowdowns in such economic staples as exports ofraw materials and tourism earnings. The substantial 4bn coming to the

region during 2007-11 in pre-accession funding from the EU is becominga lifeline rather than an aid to reform. But could the crisis be seen as ablessing in disguise, creating the conditions in which Balkan governmentswill find it easier to introduce the tough market reforms that are crucial tofuture competitiveness? What plans can western Balkan countries point tofor improving education and training and boosting research and innovation?How can the importance of the shadow economy be reduced?

Opening remarks by:

Tim Brett President of the Alpine and Adriatic Business Unit of TheCoca-Cola Company

Genc Pollo Minister of State for Reforms and Relations with theParliament of Albania

Dusan Sidjanski Professor Emeritus at the University of Geneva and SpecialAdvisor to the President of the European Commission

Co-moderated by Giles Merritt, Secretary General ofFriends of Europe,andAlistair Nolan, Head of the Investment Compact for South East Europe at theOrganisation for Economic Co-operation and Development (OECD)

15.30 16.00 Coffee Break


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SESSION IV THE CHALLENGE OF INFRASTRUCTURE:16.00 - 17.30

CAN BALKAN STATES SHARE PROJECTS?

The future prosperity of the western Balkans wil l to a very large extentbe determined by infrastructural decisions taken today. And the scale ofinfrastructural costs now facing the region is daunting; the World Bankestimates that between now and 2020 some 27bn will have to be spenton energy and environmental projects alone, and that takes no account ofthe road and rail transport links and industrial processing infrastructuresthat are vital to an efficient economy. What steps are Balkan governmentsnow considering for joint projects and cross-border partnerships, and what

advice have they been receiving from bodies like the European Commission,the European Investment Bank, the OECD and other multilateral agencies?What financing arrangements would be on offer if Balkan governmentsbegan to view economic policymaking as a regional rather than nationalmatter?

Opening remarks by:

Dirk Lange European Commission Head of Unit for Croatia in theDirectorate General for Enlargement

Peter Sanfey Lead Economist in the Office of the Chief Economist ofthe European Bank for Reconstruction and Development(EBRD)

Ahmet Shala Minister of Finance and Economy of Kosovo (underUNSCR 1244)

Co-moderated by Giles Merritt, Secretary General ofFriends of Europe,andAlistair Nolan, Head of the Investment Compact for South East Europe at theOrganisation for Economic Co-operation and Development (OECD)

17.30 End of Summit


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ANNEX III - List of Participants(for Discussants and Speakers see p 48)

Filippo Addarii, Director, Euclid Network, United KingdomNerijus Aleksiejunas, Head of EU Enlargement Division,Ministry of Foreign Affairs, LithuaniaPascale Andrani, Ambassador, Delegation of France toNATO

Albena Arnaudova, Communications Advisor, World HealthOrganization (WHO) Office at the European Union

Angelica Attolico, Political Analyst, Unicredit Group, ItalyAdrian Aupperle, Policy Officer, Transparency International

Gani Azemi, Correspondent, Qendra Pr Informim e Kosovs(QIK)Ana Babovic, Member of European Integration Team, Officeof the Deputy Prime Minister for EU Integration, SerbiaTomasz Banka, Administrator, European Parliament:Committee on Civil Liberties, Justice and Home AffairsMartin Banks, Journalist, The Parliament MagazineMiklos Barabas, Member of the Contact Group on WesternBalkans, European Economic and Social Committee (EESC)Dragan Barbutovski, Senior Consultant, Weber ShandwickBranko Baricevic, Ambassador, Mission of Croatia to the EUSandro Baricevic, Corporate Identity, Public Affairs &Communications Manager, The Coca-Cola CompanyMichelle Barrett, Regional Programme Officer, USAID

Regional Services Center for Europe and Eurasia, HungaryLubomir Batary, COWEB Delegate, PermanentRepresentation of the Slovak Republic to the EUJan Bverstrm, Information Specialist, European Parliament

Adam Bennett, Senior Advisor, International Monetary Fund(IMF)

Alexandre Berlin, Honorary Director, European CommissionJanusz Bielecki, Head of Unit, Council of the European UnionMichael Bird, Regional Director South East Europe, BritishCouncil, AustriaSteven Blockmans, Senior Research Fellow, T.M.C. AsserInstituut, the NetherlandsPeter Bonin, Fund Manager Open Regional Funds SouthEast Europe, Deutsche Gesellschaft fr Technische

Zusammenarbeit (GTZ), MontenegroAdelaide Boodts, Junior Research Fellow, Institute franaisdes relations internationales - BruxellesLaure Borgomano, Conseillre, Delegation of France to NATOMavrov Borislav, Senior Expert, European Institute, BulgariaMarc Botman, Head of Unit Austria and Slovenia, EuropeanCommission: Directorate General for Regional PolicyDejan Bozovic, Journalist, TV Montenegro

Veit-Ulrich Braun, Cameraman, Radio Televizija SlovenijaOleg Bredikhin, First Secretary, Mission of the RussianFederation to the EUTatjan Butorac, EU Liaison Manager, Heinrich BoellFoundation

Alain Camu, Treasurer, European Movement International

Bo Caperman, Programme Manager, European Commission:Directorate General for EnlargementCagney Capps, Political Military Analyst, United States AirForce

Enzo Caputo, Senior Associate, Economic & Policy Analysis,Development Researchers' Network (DRN), Italy

Andrea Cellino, Director of Policy and Planning, OSCEMission in Bosnia and HerzegovinaMarie-Hlne Chevallier, European Affairs Officer, ServierBarbara Chiappini, Head of the EU Task Force, Ministry ofthe Environment and Territorial and Marine Conservation, ItalyEuropean Union Task ForceDusan Chrenek, Head of Unit, Enlargement, European

Commission: Directorate General for Agriculture and RuralDevelopmentStian Christensen, First Secretary, Mission of Norway to theEUEfthimios Christodoulou, Chairman, Hellenic Petroleum,GreeceMihael Cigler, Western Balkan Special Adviser, Center for eGovernance Development, SloveniaPaul Claes, Secretary General, European Federation forIntercultural LearningRachel Claessens, Counsellor, Dynamic Resources ConsultPhilippe Claeys, European Government Sector Advisor,PricewaterhouseCoopersKristof Clerix, Journalist, MO*

Christopher Coakley, Press Officer, Group of the EuropeanGreens-European Free Alliance (Greens-EFA)Aleksandra Colic, Third Secretary, Mission of Montenegro tothe EUMichel Courtin, Chairman, Dynamic Resources ConsultClaudia Crawford, Resident Representative in Serbia andMontenegro, Konrad-Adenauer-Stiftung (KAS), SerbiaBelgrade OfficeStanislav Daskalov, Head of Brussels Liaison Office, RegionalCooperation CouncilMartin Dawson, Deputy Head of Unit, European Commission:Directorate General for EnlargementFabrice De Kerchove, Project Manager, Fondation RoiBaudouin

Stojan de Prato, Senior Correspondent on EU Affairs, VecernjilistJoan Delaney, Independent ConsultantPolydoros Demetriades, Principal Administrator, EuropeanCommission: Directorate General for Education and CultureFranois de Ribaucourt, PhotographerBesa Dervishi, Student, University of Geneva, SwitzerlandMaria Chiara Detragiache, Business Development &Marketing Assistant, MGM International Europe

Verena Detzel, EU Business Development Advisor,PricewaterhouseCoopersPetrit Doberdocani, Business Developer, Euronet ConsultingUrsa Dolinsek, Translator, Council of the European UnionMeta Dragolic, Correspondent, Radio Televizija Slovenija

Ovidiu Dranga, Ambassador, Embassy of Romania toBelgiumIlir Dugolli, Ambassador Designate, Embassy of Kosovo(under UNSCR 1244) to Belgium


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Radka Edererova, Counsellor, Permanent Representation ofthe Czech Republic to the EUDino Elezovic, Head of Office, Sarajevo CantonRepresentation OfficeNina Elzer, Political Advisor to Nadja Hirsch MEP, EuropeanParliamentTanja Fajon, Vice-Chairwoman, European Parliament:Delegation: EU-CroatiaGilbert Fayl, Secretary of External Affairs, European Academyof Sciences & Arts, AustriaUlric Fayl von Hentaller, Adviser to the President, EuropeanAcademy of Sciences & Arts, AustriaPascal Fendrich, Academic Assistant, College of EuropeChristopher Flores, Consultant, Aspect ConsultingCatherine Flumiani, First Counsellor, Delegation of Italy toNATODominik Frelih, Policy Advisor to Alojz Peterle, MEP, EuropeanParliamentStefan Fr

Documents

2009 EPS Balkans Web