Can the EU Hack the Balkans?

The sight of Slobodan Milosevic being tried for war crimes in the Hague may suggest that we have reached the end of history, Balkans-style. The prospects of large-scale conflict in the region are low; democracy and pluralism are slowly taking root; and the Balkans' claim on the world's attention, declining even before September 11, continues to fall. Over the next two to three years, NATO will likely reduce its peacekeeping presence further, foreign aid will decline, and international attention will continue to drift elsewhere.

The Bush administration has led the exodus, progressively turning over Balkans responsibilities -- both long-term development and short-term crisis management -- to the European Union. The EU, for its part, is eager to take the reins. It has already stepped in to keep Serbia and Montenegro together in some fashion and declared itself available to replace NATO peacekeepers in Macedonia.

One of the twentieth century's most troubled areas thus gets a new shot at the history books, as a proving ground for a new partnership between the United States and the EU. This time, however, Europe is in the lead. The stakes are high -- for regional stability, to be sure, but also for the future of a serious European foreign policy and a newly balanced transatlantic relationship. The question, therefore, is no longer whether Europe can succeed in the Balkans; for its own sake, if not for America's, Europe must succeed there.

Yet at the same time as the EU is acquiring greater responsibility for Balkan affairs, it finds itself absorbed in internal debates over expansion, constitutional revision, and pressing global matters such as the ongoing conflict in the Middle East. Moreover, despite efforts at streamlining, the EU's weakness in security and foreign policymaking remains obvious, and strengthening European capabilities in these areas will take years. Thus, Brussels' ability to handle the assortment of challenges it has taken on in southeastern Europe, and Washington's willingness and ability to be an effective junior (but still prodding) partner, remain very much in doubt. STATE OF THE UNION

Milosevic may have been replaced by friendlier forces, but all is not quiet on the Balkan front. The toughest economic challenges lie ahead. Membership in the EU -- or even candidate status -- for the states of the former Yugoslavia (except Slovenia) is far away, while ethnic fears and hatreds still hover close to the surface. Some crucial policy judgments must be made, and made correctly, to ensure that recent gains are not lost in the coming years.

The centerpiece of the EU's Balkan strategy is to move the region's states toward membership in the union, however distant that prospect remains. In theory, this accession process will enmesh the divided peoples of the former Yugoslavia in the EU's legal, political, and economic standards, and Western traditions of pluralism and tolerance will eventually supersede local tensions. A two-part waiting room for EU membership has been set up to work toward these goals: the region- wide Stability Pact, which offers a framework for undertaking concrete projects and for restoring discussion and cooperation among the formerly warring groups; and the Stabilization and Association Process, which maps the steps toward association with and later membership in the EU.

But as observers of European politics well know, EU enlargement runs an immense risk of stalling. From Euroskeptics concerned about the centralization of power in Brussels, to taxpayers unhappy with the prospect of an EU of more than 30 members, the obstacles to enlargement seem endless. The scheduled 2004 expansions thus may well be the last for a decade. If even fast-progressing Croatia has to wait ten years for admission, what inducements can Brussels offer Serbia and Montenegro, Bosnia, and Macedonia? The new high representative in Bosnia, the highly regarded British politician Paddy Ashdown, has been heard to remark that he has only one big carrot, EU membership, with which to influence Bosnian behavior. But this carrot will start to seem less tempting if Brussels cannot make the prospect of membership realistic, and the benefits tangible.

In the meantime, the region's stability -- and its ability to build institutions that will meet Europe's requirements -- hinges on how it answers crucial existential questions. What will be the structure and political orientation of rump Yugoslavia and its current constituent parts (in particular, Serbia, Montenegro, and Kosovo)? How will Macedonia accommodate its restive ethnic Albanian minority and move beyond the province's current cold peace? How can Bosnia achieve some economic dynamism? These and many other questions highlight crucial considerations for the establishment of secure self-government, for fostering justice and reconciliation, and for promoting longer-term social progress across the region. Finding peaceful, mutually acceptable solutions will require a political course beyond what is envisaged in the Stabilization and Association Process; each step, in turn, is likely to demand determined leadership.

Now, with the United States losing interest in Balkan issues, the results could be disastrous if the Europeans cannot independently muster the strength to make -- and follow through on -- tough decisions. Brussels has thus far shown great initiative at maintaining the status quo, but less in enlisting the region's reformers in resolving pressing political problems.

One major obstacle to strong European action in the Balkans is the fact that the EU remains a prisoner of the narrow individual interests of its 15 members, too often allowing individual countries to block an effective EU-wide policy. The classic example is Macedonia's name, which Greece, largely for domestic political reasons, asserts represents an irredentist claim on Greek territory and cultural heritage. Consequently, the EU's official dealings with Macedonia still refer to it with the provisional name Former Yugoslav Republic of Macedonia. Athens continues not just to block a solution that eases the deep anxieties of ethnic Macedonians, but to prevent even a serious discussion of the issue or of a common EU position. Greek-Turkish differences have also blocked efforts to finalize arrangements for EU military operations -- a critical new EU capability to be used first in Macedonia. Further examples abound of national interests or politics undermining EU efforts. SOCIAL ENGINEERING

Beyond the EU's internal problems, it has also got its Balkan priorities wrong, focusing too much on long-term economic possibilities and not enough on current political shortcomings. The results of this approach are most evident in Serbia. A stable Serbia, able to convince its neighbors that it has chosen the multilateralism of the twenty- first century over the nationalism of the nineteenth, is essential to peace and ultimately economic cooperation among the Balkan states. On the upside, the republic has made good economic progress. But its political prospects remain clouded by pitched battles between reformers and nationalists and challenges to civilian control of the security forces. During this crucial time, misguided policy could undermine the progress of recent years.

Brussels, however, has declined to use its economic leverage to push Belgrade to address Serbia's central political challenges -- confronting the past, pursuing war criminals, and reforming the security agencies. Indeed, earlier this year, Brussels offered $100 million in new loans to Belgrade on the same day that Washington suspended aid over noncooperation on war criminals; pointedly, France and Germany chose that occasion to announce that accountability for war crimes would not affect their aid decisions. (Both governments seem to ignore the fact that without the conditions Washington placed on aid, many fewer cells reserved for defendants in The Hague would have been filled.) As the EU becomes the chief economic partner of the Balkan states, it must find ways to vigorously promote not just its institutions but also its values.

To take another example, Brussels has apparently decided that the Balkans' future lies with a strong Serbia and fewer statelets -- meaning that Serbia must be joined to Montenegro and, apparently, to Kosovo as well. Certainly no one who has spent any time in the region believes that Kosovo can again be ruled from Belgrade. This camp includes reformist Serbian leaders, who say that holding on to Kosovo will slow down, not speed up, their progress toward EU membership. Yet France, Italy, and Greece, among others, have signaled that the province must remain part of Serbia, with no protest from other EU governments. Thus, the EU now refuses even to open a discussion on final status for Kosovo.

Brussels' insistence on preserving a single Yugoslav state has also hindered Montenegro's postwar transition. Instead of fostering reform and rapprochement with Serbia through a democratic process, EU negotiators bludgeoned Montenegro into joining a new entity to replace the Federal Republic of Yugoslavia, one with two economic systems, two currencies, and two speeds of reform: a "Quasimodo state," as Yugoslav National Bank Governor Mladen Dinkic has called it. Now, despite the skepticism of many in the Serbian government, and the agreement signed by Serbia and Montenegro, the European Commission appears to be trying hard to have Montenegro returned to Belgrade's full economic control. Many Serbs, meanwhile, are calling for a "Serbian independence movement."

In the long term, the EU's hybrid Yugoslavia is likely not sustainable. In the short term, Brussels' approach means that the progress of Serbia, Montenegro, and Kosovo toward EU integration will be held back by the slowest among them -- despite the EU's stated intention of rewarding those who move forward on reform. Serbian and Montenegrin authorities have all but acknowledged this situation and are asking hard questions about their own membership prospects as a result. (Kosovo will be heard from only once it has a government that is allowed to function.) EUROSKEPTICISM

Last year's Balkan challenges -- staving off conflict in southern Serbia and responding to conflict in Macedonia -- were resolved with intense U.S. and European involvement. Macedonia still needs constant watching, both for its own sake and because ethnic Albanian rebels there could re-ignite fires in nearby Kosovo, southern Serbia, or even Montenegro. But the United States no longer has a high-level envoy for the region, despite the U.S. envoy's successful negotiation of the 2001 Ohrid Agreement between Slavic and Albanian Macedonians, and Europe has done little to gain the trust of ethnic Albanians -- or to address lingering suspicions among Balkan Muslims that European prejudice will leave them outside the "common European home."

Indeed, the EU suffers from a generalized lack of respect across the region. The misadventures of the early 1990s, such as the Srebrenica massacre, cast a long shadow. Even as Brussels has worked to build a military capacity, many remain skeptical of its value. The EU's eagerness to take over NATO's role in Macedonia this fall has set up a key test: Europe must find the military muscle to prevent or halt flare-ups, the political strength to enforce the peace agreement, and the economic wherewithal to aid the population.

Even the EU's economic weight, its greatest strength, is also frequently questioned. Brussels is the largest donor to the Balkans, and European officials have strongly expressed their commitment to the region. But EU assistance is known in most Balkan countries for its frequent tardiness, and for the small proportion of what has been pledged in Brussels that actually materializes. Moreover, just as Washington has slashed its aid to the Balkans, Brussels has refocused its programs on more advanced economic and structural reforms. As a result, foreign assistance levels are falling in the countries most in need of support. In Kosovo, for example, the European Commission's cards program (Community Assistance for Reconstruction, Democratisation, and Stabilisation) will cut aid by 70 percent next year, from 180 million Euros to

50 million Euros. This slowdown comes as all countries are asked to make tough reforms and swallow unpopular compromises. Kosovo is hit particularly hard, receiving no foreign investment and almost no World Bank assistance because of its indeterminate status. WASHINGTON WATCH

Years ago, Henry Kissinger famously asked whether Europe had a phone number. Today it does, in the office of Javier Solana, the EU's foreign policy chief. The question now, however, is how much the United States will work the phone on Balkan issues.

Already, U.S. engagement in the Balkans has fallen off dramatically. American assistance to the region declined 10 percent this year and is slated to fall another 20 percent next year, from $621 million to $495 million. Troops are moving out swiftly -- dropping to 1,800 U.S. service personnel in Bosnia in the fall of 2002, down from 4,400 last year. Responsibility for Balkan decision-making at the State Department has drifted down from "7th floor" special envoys and political figures to the "6th and 5th floor" mid-level career officials and out to the embassies themselves -- a reduction not necessarily in competence, but certainly in high-level attention.

The war on terrorism has stemmed a bit of the decline in Washington's interest in the Balkans. After making early statements of distaste for the region, the Bush administration has now recognized that the United States retains a security interest in seeing that the Balkans do not become a staging point for terrorism, political extremism, human trafficking, or crime. That imperative means that the Balkans must be stable, well managed, and reforming.

The United States also has key interests in seeing past investments in the region pay off, having Europe emerge as a better partner for other global undertakings, and seeing the Balkans develop the long-term stability that can grow out of increasing democracy and pluralism. In turn, this stability will obviate the need for U.S. forces to return.

But there is a real fear in the region and among many in the United States that Europe will keep getting key decisions wrong -- or, by postponing decisions, make it harder for the big challenges to end with the right outcomes. European enthusiasm for institutional arrangements, state-building, and regional powers such as Serbia tends to crowd out a focus on pluralism, the building of civil society, and the realities on the ground. The United States has shown rare deference to the EU belief that difficult decisions can be postponed because new developments will make them easier. But this waiting game is a recipe for delaying economic and political reforms, impairing investment, and freezing old hatreds.

The Bush administration now faces an important choice. It can decide, as its involvement declines, that Balkan policy will be an area where the United States does not second-guess Europe, does not press its own preferences, and does not raise its voice when it sees Brussels diverging from outcomes that Washington prefers. Such a hands-off approach would be easy given other U.S. tensions with Europe -- and many in Europe would welcome it.

But many Europeans would also agree on the value of U.S. diplomatic involvement, which brings energy and initiative, as well as the broad U.S. experience in numerous areas, from civil-society development and judiciary-building to security-sector reform and accountability. Above all, Washington has the clout to prod Brussels on the hard decisions and to break intra-EU stalemates.

Can the United States learn to be supportive without being a doormat, to be a strong voice but not the only voice? In this new era in the Balkans and in transatlantic relations, can the United States muster those moral, diplomatic, and political qualities necessary to forge with the EU lasting solutions to difficult challenges? Progress on numerous Balkan issues will foster a new approach to partnership and burden sharing. Failure will prolong instability in the Balkans -- and create more of the tensions in U.S. relations with Europe that both sides are seeking to avoid.