Thu, 30 Mar 2000

Donors to help shape peace in Balkans

By Martin Winter

BRUSSELS (DPA): A year after NATO's short aerial onslaught on Yugoslavia over Kosovo, the West still finds itself hard pushed to help the jittery Balkans achieve stability through peaceful means. How serious the participants in the region's reconstruction and development take this will be shown by the donor conference now taking place at the European Union in Brussels.

Starting Wednesday, delegates from EU-aid recipients Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Montenegro and Rumania will meet representatives of 37 donor countries and 37 international state and non-governmental organizations.

There the beneficiaries of EU cash will explain which economic, political and social reforms they intend to institute; in return, the donors will agree to chip in with money to see the projects brought to life.

The aim of this complicated process, which the Stability Pact for South-East Europe has prepared from the fruit of a series of conferences held over the last few months, is a reduction in the danger of war breaking out again through the development of an area of prosperity and democracy.

The co-ordinator of the international effort to rebuild the Balkans, Germany's Bodo Hombach, has given the donors a list of 300 concrete projects which were agreed with the countries in the region and should be started on within the next year.

The projects range from school-building to bridge and road construction to the establishment or enhancement of legal frameworks.

Hombach deliberately limited himself initially to a "quick- start" package, because on the one hand, the countries must provide evidence that something will happen soon, while on the other, no one can guess the final bill for the financial engagement in the long term. For the next year, though, the pact will make do with 1.6 to 1.8 billion euros (US$1.5 to $1.7 billion).

Many of these projects are already secured through the agreement of individual countries or institutions. For the unpledged remainder, around 400 million euros, Hombach will hope to find financiers at the conference.

Of course this sort of top-up financing won't do the trick. Completion of the projects will also depend on extra funds in the coming years. The EU's mid-term financial planning, shows the organization is looking to 2005 to complete the tasks at hand.

During this period, Brussels will put up around 5.5 billion euros, although 2.5 billion of the sum has yet to be secure. With contributions of around $3 billion, the United States will certainly enjoy a strong presence on the team, while Germany is aiming to make available some $600 million to the stability kitty.

The EU's other members, who bear the brunt of the stability pact, are expected to give pledges of money at the conference.

No one in Brussels is prepared to estimate what the engagement in the Balkans will end up costing. For one thing, not only the direct and indirect consequences of 10 years of Balkan wars will need to be removed but also the results of forty-odd years of Communist mismanagement before that.

The second point to note is that the progress in instilling stability depends on if and when Yugoslavia starts treading a more democratic path. If Serbia were to free itself of its self- enforced isolation, billions will need to be directed there too.

Thirdly, the cost of helping Kosovo to its feet must also be included in the final bill. The international protectorate will probably require civil and military involvement for 20 years to come.

Finally, six billion euros as "pre-membership aid" will be due to Rumania and Bulgaria within the coming six years.

That all costs a lot of money, probably with two digits before the billion. No wonder then that so many governments, chief among them the French, are tending to pinch pennies.

The alternative, though, is the risk of further wars, something that would undoubtedly swallow up far more money. Bodo Hombach recently lectured EU finance ministers on a simple truth: "If I had come to you in uniform, it would cost far more."