Fascinated by Eastern European studies, nationhood and national identity, Hungarian-born György Schopflin was educated in the UK, where he was employed by the Royal Institute of International Affairs, and then by the BBC. He took up university lecturing at the University of London. He has produced various academic works, and is currently also teaching at the University of Bologna, in the Department of Political Sciences.

From EU Intervention to Democratic Deficit

Maria-Antoaneta Neag: The EU has entered a period of change: elections, austerity measures, protests, new governments etc. What effects do the events in Greece and Italy have on EU stability? Were the changes of governments imminent and necessary for the stability of these countries?

György Schopflin: Let me start by answering the last question: people think that these changes were overdue. It raises a number of very interesting points. First of all, these are clearly technocratic governments. They did not emerge as a result of elections and I think democracy as a general principle and system accepts that in such situations of danger or emergency, one can take steps which are not democratic.

What is interesting and new is that in both cases of Italy and Greece, the new governments came not as a result of domestic pressure but as a result of external pressure, from the European Union, the European Central Bank, France and Germany. This really raises very interesting questions about exactly where the democratic legitimacy of the actual government comes from and if it is reciprocal. Does this mean that at a future stage, Italy can instruct France to get rid of its government and install a technocratic government because the French are endangering the EU? Where does this stop? I don’t have an answer to it but I think that in terms of democratic theory and practice, these questions have to be asked.

The second point I wanted to make is that the EU is really taking decisions which intervene in the domestic affairs and even in the domestic stability of MS. I wonder how much legitimacy there is to it, especially when the general view of the European citizens is pointing in the opposite direction, away from Europe. That again raises difficult questions regarding the democratic deficit. There is a great deal of power which has accumulated in the symbolic Brussels, the legitimation of which is very thin.

That brings me to the heart of the issue. One justification for intervention is that economic developments are moving much faster than political developments. This is very clear if you look at the last two or three years and it has partly to do with the 24-hour-markets, the capital movements which, in a way, are autonomous of any state or any government, and this has been the case for 15-20 years.

Does this mean we need ‘more Europe’ as Angela Merkel has just said, or does it actually mean we have to go back to the nation state? Both processes are taking place and the difficulty I see is that it is almost impossible for practically anybody to understand that they are simultaneously citizens of their own country and citizens of Europe. The idea of European citizenship has basically not taken off. Until they do see themselves as having a voice in both, the legitimacy deficit that I’m talking about will remain in being.

Here I think that the national political elites have a really major task for which they are not yet prepared.  They are not prepared to discharge it. They don’t see, for the most part, that the solution to the economic processes has to be at the European level. We accept in principle that organised crime is global and we try to work against it at the European level. I think that from this perspective, there is a strong argument in favor of a much more effective Europe, but I think the transfer of more power to Europe is simply unimaginable without a much greater popular acceptance of power at the European level.

I think that the utopian solution is that the national political elites would accept that the European institutional system should have a much more direct link with the citizen, which really does mean that if you are a citizen of Romania or Hungary or any country, you accept that you function politically at two levels. I don’t see it.

A Pan-European List for the European Parliament

MN: You are the shadow rapporteur on behalf of the EPP Group on Andrew Duff’s own initiative report of the “Modification of an Act concerning the election of Members of the European Parliament” in the Committee of Constitutional Affairs. One controversial proposal relates to the idea of a pan-European list which would represent the European interest and strengthen the European identity. Do you think this proposal will ever be accepted by the European Parliament and the Council?

GS: There was a James Bond film called “Never Say Never Again.” I can’t see it happening at this time. Regarding Pan-European list, the idea is that 25 Members of the Parliament, either in addition to the existing 751 or coming from the existing 751  (this is still unclear and undecided) which should be elected on a separate or European list. We debated this in the Constitutional Committee countless times, so we are basically pretty clear on how this should be, but we are only a small minority within the European Parliament. What surprised me is the great majority (probably 60% or maybe even two thirds of the European Parliament) is hostile to the idea, and that includes my own EPP Group.

I don’t think it would stay on the table for too long. Formally it’s still there, but I don’t think there is real support for it in the European Parliament. Some people think that it’s irrelevant with the crisis, others do not see how it would change anything, while others are concerned that this would establish two “classes” of MEPs (European members and domestic members).

My counter-argument is that with the growing power being transferred to the symbolic Brussels in terms of economic governance, one needs some kind of elected representatives who could, in a way, supervise and control this. I think my argument is right, but I’m only one MEP out of the 751: that’s democracy, I accept it. Frankly, this idea will still remain on the ground, at least at this time. It may be that something will change quite radically and then the Pan-European list will get a great wave of support.

MN: Do you have any views from the Council?

GS: I haven’t heard anything from the Council, but I think the MS are probably taking the view that they will deal with this proposal when it becomes important.

The Western Balkans- Looking toward the Future

MN: In this moment of EU crisis, what is to be expected from the countries in the Western Balkans?

GS: I think we can separate Croatia from the others, because we can very much agree that it would join the EU in middle of 2013 and I think the Croats, whether they understand what they are joining or not, basically think that it’s a good idea to join the European Union. That’s true of every country that has acceded. They didn’t really know fully what they were doing. This contributes to the democratic deficit that I was talking about.

Regarding Serbia, my impression is, and I was there very recently, that the European Union still functions as a magnet. This has partly to do with the illusions, partly with reality – meaning that whatever happens, it’s better to be inside then out.

Serbia is interesting and I’ll talk a little bit about this because I’m the shadow rapporteur for Serbia. There is a growing sense of unease in Serbian society about the EU. The support for accession is diminishing. I think it’s around 50%, so it can go up again and it can go down. I have to say it’s the standard process that every MS has undergone: the closer they got to it, the less support there is. This didn’t mean opposition to it. An awful lot of people said “I don’t really know” and prefer to just keep quiet about it. This was the case of Hungary in 2002-2003. I don’t know what things were like in Romania, but probably something fairly similar.

The elites in Serbia are on the whole committed to joining. What is interesting is that the Serbian Progress Party, which used to be a nationalist party has switched. Tomislav Nikolić, with whom I spent an hour back at the beginning of November said, “I’m unconditionally in favor of the European Union, among other things.” This is interesting. I think what it signals is that the Serbian elite, including the radical one (which was really close to Šešelj and the anti-European position) has understood that if you want to become the Prime Minister of Serbia, you can’t be anti-European. Is this tactical, is this sincere, does it matter? I leave these questions open. To be truthful, I think that Nikolić is sincere. I think he really has changed his mind and understands the situation better.

Here I would add one other thing, which is true for every country inside the EU or those wanting to join it. I think the elites, especially the media elite, the intellectuals, are not interested in what is happening in the EU. They don’t take the trouble to learn about the European Union. Also, the academics who are working on it don’t seem to be able to transmit that knowledge to the wider public. I see a gap, a black hole. People say: “there’s the European Union, oh yes,” and then the curtain comes down. They don’t see it and the power issues actually at the heart of the EU simply don’t get transmitted. This feeds into what I was talking about earlier: the “disconnect.” You may remember the first and second Irish referenda on the Constitution/Lisbon Treaty. They used the word “disconnect” which means the gap in understanding, the gap in knowledge; so no wonder the Irish were so reluctant to vote for it.

I think it’s a fairly universal and widespread position throughout Europe. Even if you are moderately interested, where do you find the information? There are various websites, if you really want to know about the EU, you can discover it without too much trouble. However, only a small minority takes the trouble to go through the European news. It is certainly the case for Hungary. When I talk to people in my virtual constituency, they are always very interested, but I don’t think their interest lasts beyond the meeting!

What is European integration for, anyway? European integration is for all sorts of things, but the two which really count, in our part of the world, is that it gives us parity of esteem and status. Each member of the EU, on paper, to some extent in reality, is equal to any other member; in other words, size doesn’t really matter. Secondly, the EU is a superb conflict resolution mechanism. War in Europe, especially if you are an EU member, is absolutely unthinkable. That’s why, in the West, people were so shocked by Yugoslavia breaking up in terrible bloodshed.

To give you one illustration – three or four years ago, the Slovak National Party (SNS) led by Ján Slota, published a map on its website from which Hungary had disappeared. Romania was given the Tisza frontier, which you remember Romania was once promised with the 1916 secret Treaty of Bucharest. The Austrians got quite a lot, Slovaks got Northern Hungary, I think the Serbs got some parts too. In other circumstances, this could have been seen as a direct threat to the integrity of Hungary, and bear in mind the SNS party was part of the ruling coalition, in the Slovak government. Frankly, people in Hungary sort of laughed about it. I don’t think they would have laughed about it had it not been for the European Union.

That’s why I say the EU is a conflict resolution mechanism: it creates a level of security that Central Europe has never had before. Think about the repeated interventions by the great powers in the 19th and 20th centuries or the inter-war period: Germany constantly intervening, playing Hungary off against Romania. The great powers took a very active interest in the two Balkan wars (1912-1913), supplying arms, sending military observers etc. This is unthinkable today. That is part of what the EU brings us, whether the elites in South Eastern Europe are fully conscious of it. However, I think to some level, there is an understanding of it.

The EU as a Conflict Resolution Solution for the Balkan Countries

MN: You’ve mentioned the EU as a conflict resolution mechanism. Do you think the EU can be a conflict resolution solution for countries like Bosnia and Herzegovina or for the Belgrade- Priština dialogue?

GS: Yes! It’s not easy and I think the two situations need to be separated, Bosnia-Herzegovina on the one hand, and Kosovo and Serbia on the other.

I think the Serbs know they really don’t have another alternative but joining the EU. Russia is not an alternative and I don’t think they want Turkey back as their patron. I think that 500 years of Ottoman Empire rule was enough for them.

The Serbs basically know, even if they don’t like it, that if they actually want to join the European Union, they have to recognize Kosovo. The question that I found, when I was there recently, is “On what terms?” Can they do something less than full independence of Kosovo?

The answer from Brussels, as indeed from Berlin, is no. The Serbs are still coming to terms with that and their idea is to create a situation in which Kosovo is de facto independent but actually is formally still a part of Serbia and enjoys complete internal sovereignty. This won’t happen. It’s very difficult to lose territory, it’s very painful. I think that complying with EU conditionality will actually make a difference.

The Non-Consensual Bosnia and Herzegovina

MN: What about the case of Bosnia and Herzegovina?

GS: Whereas Serbia is a single state, even if there are quite some major divergences within the country, nevertheless, I think that there is a fundamental coherence. This is not true of Bosnia. The main problem, which nobody here – whether it is Brussels or Strasbourg – wants to confront, is that it’s a non-consensual state.

The Serbs, the Croats and the Bosniaks don’t want to live in the same state. Geography and, to some extent, history and politics pushed them in that direction. Is this democracy? What do you do when people living on a particular territory which has been given the status of a sovereign state don’t want it anymore? Belgium is the obvious example. I think that the future of Belgium hangs in the balance and I’m not sure that a break-up really matters. I can certainly see a scenario where Scotland opts out of the United Kingdom.

Most people think that states are there forever, but I think states are the product of history. They are human creations and they can change. The configuration of states can change. We pretend otherwise. On the other hand, I think it’s possible that somebody will eventually say to the citizens of Bosnia that they don’t have an alternative:  you have to live in this state whatever it takes and we will force you to do it even if it takes 100 years. I don’t see anybody rising up to say it and, in a sense, this is what is needed if the EU, the world, the US obviously, wants to ensure that Bosnia will become a single state.

Frankly, what I see is that Republika Srpska wants an autonomous status which is so autonomous that it can deal directly with Belgrade and Belgrade is not unhappy with this. They really don’t want too much to do with Sarajevo, they don’t like it and the level of tension below the surface is still very high. It’s a traumatized society, in fact it’s not a single society, but three traumatized societies. There, I think the task of EU conditionality is much greater.

MN: How do you see the rest of the Balkan countries?

GS: Montenegro can make to the EU it fairly soon, although there are still some serious problems: criminality, the Russian presence, but those are different things.

I see Albania as being a long way to anything that remotely resembles an integrable state. I think Enver Hoxha’s regime was worse than that of Ceausescu, hence the communist legacy is worse too.

I feel very regretful about Macedonia because I think it is integrable. I don’t see why nobody is saying to Greece to stop this fight. If Greece is being bailed out and is saved from complete collapse, than the least it can do is to abstain from the fight against Macedonia and accept that it is going to be called that way, and that this name doesn’t really pose a threat to Greece.

Reconstructing Histories

MN: What do you think about the trend in Macedonia to “build their own history” in terms of public works and monuments?

GS: Everybody does this.

MN: Isn’t it like a threat to the so called European identity which we all desire?

GS: No, I really don’t think this for one moment. Every country constructs its own history. There is no such thing as totally objective history. Let me give you one instance. It’s still part of the Hungarian mindset to talk about Mohács, 1526, a terrible defeat at the hands of the Ottoman army. It was partly Hungary’s fault, but we won’t go into these arguments. We talk about the catastrophe of Mohács. If you go to Istanbul, you see signs of celebration of a great victory of Mohács, which is right. They are right in their own way.

There are countless discussions about Transylvania, the Daco-Roman continuity or not. I did once suggest we should start talking about the Daco-Hungarian continuity and that would solve the problem. It’s nonsense. In a way, it’s a ridiculous historical debate but, on the other hand, in terms of identity construction, it’s really very significant. Think about the way Ceausescu constructed the entire Dacian past which is similar to what Macedonia is doing with Alexander the Great. I haven’t seen the new statue live, as it were, but it seems to be complete kitsch which reminds me of another 100 meter-high golden statue, that of Saparmurat Niyazov from Turkmenistan. I don’t want to be unkind, but that statue of Alexander the Great does look like the Tin Man from the Wizard of Oz.

Turkey and Russia’s nostalgia over the Western Balkans

MN: You’ve mentioned the Ottomans and Russia, and their influence in the Western Balkans. Do you think they will give up on the Western Balkans so easily, as both Turkey and Russia have some strategic investments in Serbia, Montenegro and other countries from the region?

GS: They will not abandon their interest entirely. Some of it is economic investment, some of it is political. The question is: can they actually do it, is it important enough for Russia to maintain these significant outposts in Serbia, Montenegro and to some extent in Croatia. I don’t know if they are present in Bosnia in any significant way. Actually, the Russians are also present in a number of other countries. Can they do it? Can’t they do it? The question is the terms on which Serbs actually want them. It’s a two way relationship.

As far as Turkey is concerned, Erdoğan repeatedly denies that there’s any significant strategic interest, but of course he has. When they had the commemoration of the Srebenica massacre, Erdoğan went there and he was the leading figure. He was the most important person there. Everyone deferred to him. In other words, to Bosniaks and to some extent to Kosovars, Istanbul is an important source of moral and economic support. Whether that’s quite so significant or straightforward or welcome for the Serbs and Bulgarians, I wouldn’t like to say.

George Friedman, a hard-line geo-strategist, argues in his book “The Next Hundred Years,” that sometime in the future, Turkey will emerge, it’s already emerging, as a major world power. It’s one of the states that produces over 1% of the world’s GDP. It’s not quite one of the BRICs, but it’s getting that way. It’s a serious player, in regional terms, and to some extent in world terms.

The Turks would want to push their military power northwards, which means back into South-Eastern Europe and then the only counter-force would be a Polish-Romanian alliance and Austria, Hungary, unless Hungary isn’t already occupied. Hungary is indefensible, it’s all flat. If the Turkish army were to advance, Hungary would be occupied very quickly. The battle line would be the Carpathians. I think the idea of expanding the Turkish power northwards which encounters Polish-Romanian power looking southwards, that’s something that doesn’t have to be military, but I think that’s something that makes you think very seriously.

Turkey, sooner or later, if it goes in that direction, will find itself engaged in a very serious contest with Russia. The countries around it mostly speak Turkish languages. Azerbaijan is, in particular, Turkey’s closest ally. All sorts of interesting scenarios can be constructed.

The difficult that I see is that the large states of the West, in a way are not that interested in the smaller states of Central and South-East Europe. I think the French generally feel that the 2004-2007 enlargements were a mistake.

Enlargement Fatigue

MN: Many people are of the view that Romania and Bulgaria may have joined too soon and that the political criteria prevailed over the other Copenhagen aspects. Do you think this was one of the reasons of the postponement of the enlargement in the Western Balkans?

GS: It’s there in the background. Formally, things are going ahead. The Enlargement Directorate of the Commission is working very hard on this and produces these country reports every year. No enlargement can take place without the political will of the existing 27 Member States. I think it will happen, but not in the near future. The negotiations with Croatia began in 2005 and Croatia will enter in 2013; 8 years, it’s a long time.

MN: How long do you think the other Western Balkan countries will have to wait before they receive a comprehensive answer from the EU?

GS: Serbia will very likely get candidate status, but no date. So, how about 2020?

[End Part 1]

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Balkanalysis.com editor’s note: while it tends to be perceived as a Western power with business interests strictly on the Balkan Adriatic coast, Italy is increasingly seeking to look further within the peninsula for opportunities, as this fact-rich new overview documents.

Italy today is, together with Germany, the main commercial partner of the Western Balkan countries, with more than 30,000 Italian firms operating and investing in the former Yugoslav countries and Albania.

These investments, even if stemming from an historical and well-established economic presence, show the growing interest of Italian companies towards this region, still undergoing the lengthy processes of institutional stabilization, European integration and transition to market economy.

Italy’s main sectors of FDI (foreign direct investments) in the Balkans are examined in the following summary, utilizing recent data, such as reports from the Italian Ministry of Foreign Affairs, the Italian Ministry of Economic Development and the National Institute for Foreign Trade. All data can be found (in Italian) here.

Market Attraction

First, we must underline that the economic crisis which began in 2008 put a stop to the then-increasing export of Italian products to the Balkans: while in 2008 the total export amounted to 15 billion euros, in 2009 this figure shrank by around 25 percent, to around 8.4 billion euros, but came close to 10 billion euros in 2010, according to ISTAT/ Italian Institute of Statistics.

For the end of 2011, new growth is expected, however; in fact, investments in the Western Balkans remain a favorable opportunity for Italian firms due to four main reasons: the potential dimension of new markets (at least 25 million customers and growing), the cheap labor costs (30-70% lower than in Italy), the profitable tax regime, and a young, well-educated and specialized local population.

To give some examples, in Bosnia and Herzegovina the value-added tax (porez na dodanu vrijednost, PDV) is 17% and wages in 2008 were still lower than 400 euros monthly on average. In Croatia, where the VAT is 23%, the law guarantees 0% tax for companies investing more than 8 million euros, and the government can subsidize up to 20% of the costs in those counties with unemployment higher than 20%. In Kosovo, where 70% of the population is aged 40 or younger, and unemployment typically at 34-45%, the monthly average wage is 230 euros. Macedonia also offers skilled workers for relatively low wages and the government there has attempted to make attractive tax and other incentives to bring in foreign investment in the last five years.

Italy’s Balkan Investments: the Four Major Sectors

Many Italian corporations have recently taken advantage of this state of affairs, moving part (or all) of their production into Yugoslav successor states (Serbia, Montenegro, Kosovo), all of which have very sound relations with Rome. Market penetration in Croatia, Bosnia-Herzegovina and Slovenia is more difficult because of German and Austrian prominence, though some economic hubs are emerging around Italian companies or merchant banks.

Generally speaking, Italian investments in the Balkans have been made in four principal areass, in which operate major investors: finance, the automotive industry, general distribution and the energy sector.

The financial one is understandably the leading area of Italian investments in any Balkan country; in particular, the major Italian banks Unicredit and Intesa-San Paolo have opened since the 1990s bases and affiliates in new capitols and major towns.

Finance

In Croatia, Unicredit controls the Zagrebačka Banka with 4 branches and 119 counters, while Intesa-San Paolo holds the Privredna Banka Zagreb (8 branches and 230 counters). These are the main Croatian banks and represent 45% of the entire credit market, according  a report from the Italian Institute for Foreign Trade (ICE) in 2011. This centrality is quite evident also in Serbia, where these two groups control around 25% of credit and bank business, and in Bosnia-Herzegovina, where they reach 30% of the market.

The insurance sector represents the second pivotal area in Italian financial investments in the Balkans, lead by Assicurazioni Generali which holds the subsidiary Generali Osiguranje, with a life and non-life insurance turnover of around 30 million euros. In 2006, Generali arrived in Serbia, acquiring 50% of Delta Osiguranje, based in Belgrade: together with Fondiaria-SAI, a second insurance group from Italy, they control a share of 44% in the Serbian market.

Automotive and Industrial Production

Outside of the financial sector, the Italian business presence in Balkan states tends to vary in relation to the disposal of raw materials, energetic sources and level of government commitment in attracting foreign capitals and companies.

Broader investment has been allocated in Serbia by FIAT, Italy’s biggest automotive firm, bent on delocalizing in the former Zastava industries of Kragujevac, by means of a joint-venture (two-thirds, one-third) with the Serbian state.

The total amount of the investments exceeds 700 million euros, and will grow in the next years with the launch of the new minivan L0, entirely produced in Serbia. According to the official project, the production will start at the end of this year and – according to FIAT manager Marchionne’s declarations -  will in 2012 have resulted in 200,000 finished cars.

However, the FIAT-Zastava operation is not the only field of Italian investments in Kragujevac. Magneti Marelli – an automotive components industry controlled by FIAT – signed in May 2010 a new agreement with the Serbian government for the construction of a factory, with a capital expenditure of 60 million euros and the likelihood of granting 400 new jobs. Also, in July 2010 the Italian company Dytech (a producer of fluid-conducting tubes) started the construction of a new factory in Niš, with an overall investment of about 13.3 million euros.

In the field of industrial production, greenfield investments have been made by two Italian medium-sized companies, located in Vukovar and Sremska Mitrovica. In the Danubian town Adriatic Dunav, mostly financed by the company Adriatica S.p.a. from Rovigo, is active in the market of fertilizers: the total amount reached 18 million euros, with more than 200 employers working in an ultra-modern factory with a low impact on the environment; in Vojvodina, the STG group last year opened a foundry in Sremska Mitrovica to produce iron bars for building trade, with an investment of near 35 million euros.

Clothing and Trade

A more active Italian sector in general distribution is clothing production and trade, with some well-known international brands moving factories and productions into Serbia and Croatia: above all, Calzedonia, whose investments in Croatia (Čakovec and Varaždin) amount to about 100 million euros, and directly employing 1,300 workers and boosting a growing satellite industry. This company also owns a 700-employee factory in Sombor in Serbia’s Bačka region (about 16 million euros invested).

Benetton also has a long history of investments in Croatia: since 2001, when the first manufacturing plant was established in Osijek, Benetton Croatia has evolved to become one of the biggest local industries, with 500 internal workers and more than 3,000 in cooperating firms. The total amount of the investments has been approximately 16 million euros (5.2 in 2000, 7.7 in 2001 and 3.1 million in 2006). In September 2010, Benetton inaugurated its Serbian branch: current projects define a future investment of 50 million euros for a new factory in Niš, which will employ about 2,700 people.

Two more important investors in the clothing production industry are Pompea, with some 300 employees in Zrenjanin and Brus, and Geox (third-largest footwear producer in the world) which is investing 8 million euros in a new manufacturing plant in Pirot, southeastern Serbia.

Energy

The fourth area of Italian investments in the Balkans is energy production and supply, in particular in Croatia, Serbia and Montenegro.

Concerning the first country, ENI (Ente nazionale idrocarburi, the largest Italian state-controlled industry) has worked with the Croatian government since 1996 for the modernization of infrastructures and for the construction of a pipeline between the Adriatic gas rig Ivana and the town of Pola, in Istria. This experience led ENI to create a joint-venture with local oil company INA, named INAgip; current production exceeds 5 million cubic meters.

In a joint venture with INA, Edison (the fifth-largest energy company in Italy, active in electricity and natural gas) created ED-INA for research and production of hydro-carbons in the Adriatic. In 2010 Edison funded an exploratory investment of 25 million euros and spent about 110 million euros for developing infrastructures on the new “Isabella” oil field. The rig started production in 2010 and will furnish an estimated total production for 2011 of 200 million euros.

In Serbia, as well, SECI Energie SPA signed an agreement with Elektroprivreda Srbije to create a joint company named Ibarske Hidroelektrane, with a 51%share for the Italian company. This investment (about 285 million euros) provides for the construction of hydro-electric power plants on the River Ibar.

Energy production represents the main sector of Italian investments in Montenegro, as a consequence of the wide operation of recapitalization and partial privatization of the EPCG (Elektoprivreda Crne Gore) led by the government. In this scenario, the Italian Group A2A from Brescia became a pivotal strategic partner of the Dinaric Republic, buying 43.7% of the capital, for a total amount of 436 million euros. This agreement, thoroughly supported by the Italian government, led Italy to became the principal foreign investor in Montenegro in 2010.

A second Italian energy company, Terna rete elettrica s.p.a. (controlled by the Ministry of Economy through the state bank Cassa Depositi e Prestiti) acquired a 22.09% minority stake of CGES (Montenegrin energy distribution society) on November 23, 2010. The entrance of Terna into the state-controlled company is the first step in the project for the laying of a power line between Italy and Montenegro, which will run for 415 km, 390km of this total being under the Adriatic Sea. The total investment by Terna will amount to 720 million euros.

Besides these high-profile investments made in recent years. many smaller Italian companies have opened subsidiary bases or factories in Balkan states, favored by the development of deeper economic relations between these countries and national or international institution and organization. This tendency is likely to continue in the coming years- unless, of course, the entire Italian economic system is not jeopardized by the Eurozone financial crisis first.

Data source: ICE (Italian Institute for Foreign Trade) survey 2011

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Balkanalysis.com Editor’s note: Highly qualified young Serbs still tend to look towards other countries (mainly EU Member States) for employment opportunities. The following relevant article offers insight on the brain drain, brain gain and brain circulation phenomenon related to Serbia, and at Serbian government and other NGOs´ strategies for tackling this challenge (e.g. Programmes for return of Serbian scientists from abroad, youth sports programmes for the diaspora etc.).

An Outbound Trend

Migration trends in the Western Balkans increased during the wars that led to the dissolution of the former Yugoslavia in the 1990s. Today, other than some lingering ethnic conflicts, the economic situation represents the main reason for emigration.

The same applies to Serbia, which is unable to provide a sufficient development perspective to its youth. The situation has deteriorated because of the economic and financial crisis: unemployment reached 22.2% at the end of April 2011, while the public debt went up to 41.3% of GDP by the end of July.

These economic problems, combined with corruption and labour unrest, are the reasons why more and more young educated people possessing knowledge and technical skills prefer to emigrate or to continue their studies abroad (especially in EU countries), thus leaving Serbia with an unprecedented brain drain situation.

A Lack of Data

One of the difficulties encountered when trying to tackle this challenge is the lack of data (regarding the brain drain phenomenon only scarce data is available, both in the country of origin as well as in the country of destination). Those people leaving Serbia for studies abroad are not able to provide a definitive answer regarding the timeframe of their stay abroad, as most of them also aim to find employment in the country where they will study. According to the World Economic Forum and USAID, in 2009 Serbia was second to last (132 out of 133 countries) in brain drain, meaning that there is a critical situation due to the loss of its educated and skilled people. These circumstances may impact Serbia’s future development and its labor market. Although the situation is rather difficult, there are a lot of projects focusing on brain gain.

Government Aid and Interaction with Serbian Communities Abroad

To better manage the communication with its Diaspora, the Serbian government has put in place a special Ministry for Religion and Diaspora that focuses on specific programs, having among its prerogatives the responsibility to keep an active relationship with Serbian nationals living abroad, estimated at three to four million people by the Ministry for Religion and Diaspora in 2010.

The ministry makes efforts to open new schools for the Diaspora in Serbian language and Serbian Orthodox traditions, to organise and undertake visits to the Diaspora, to provide priority to Diaspora Serbs when trying to acquire new identification documents, and to promote special programmes facilitating summer jobs for students from the Diaspora.

The Law on Diaspora was adopted on October 26, 2009, came into force on November 5, 2009. It changed the legal grounds of the Serbian relationship with its nationals living abroad. This law also envisaged the creation of a Diaspora database, to collect information (on a voluntary basis, with protection of confidentiality promised).

Economic cooperation with the Diaspora is an important aspect that is enhanced with the help of this law. The special Diaspora ID helps the Serbians exercise their rights and apply for different forms of support.

Brain Gain Strategies and the NGO Sector

An important point was made by the Minister for Diaspora, Srdjan Sreckovic, speaking at the General Assembly of the Organisation of Serbian Students Abroad (OSSI). He noted that “human resources, or human capital, are Serbia’s greatest advantage in comparison with its neighbouring countries, and the only sector of society in which Serbia does not lag behind other nations.”

There are a great deal of brain gain strategies now underway in Serbia, among most important recent ones being the Strategy of Scientific and Technological Development of Serbia 2010-2015, the Strategy to Preserve and Strengthen the Relationship between Homeland and Diaspora, as well as Hmeland and the Serbs in the Region (Ministry for Diaspora) and the Migration Management Strategy (Commissariat for Refugees). However, concerns about the actual return of the highly qualified young people back to Serbia should be addressed.

There are also a lot of NGOs working on migration issues and assistance for return and Diaspora programmes. These include the NGO Grupa 484 and its programmes aiming at developing the systematic support of highly qualified people, and the Belgrade Fund for Political Excellence-BFPE and its initiatives to improve the reputation of Serbia.

Initiatives for Brain Circulation

There are countries in Europe which are particularly experiencing the brain drain phenomenon, such as Serbia and Romania, losing their young talent to other states. Concurrently, there are countries enjoying the effects of brain gain, such as Austria and Germany, and the inflow of highly qualified workers on their labor markets (with the help of special legislation in this field).

Howecver, as anti-migrants feelings continue to increase throughout Western Europe, affecting the political discourse and power relations in various countries, the best solution for all stakeholders is to have strategies for brain circulation encouraging international studies and mobility, but also return to the country of origin.

For Serbia, an opportunity lies in developing constant cooperation, exchange of resources and know-how between scientific Diaspora and institutions in the home country, such as universities, research centres, business corporations and so on, with an aim to develop cooperation in the process of so-called brain circulation.

At present, the existing brain gain programmes focus on creating better working conditions for the highly qualified people (Ministry of Science and Technological Development), scholarships and mobility programs (Petnica Science Centre, University Centre for Career Development founded by Belgrade University, National Employment Service, Ministry of Youth and Sports etc.) and cooperation with the professional Diaspora and other forms of support for returnees (Serbian Unity Congress, Organisation of Serbian Students Abroad – OSSI, Belgrade Fund for Political Excellence-BFPE).

Common Efforts with Regional Partners

Some common efforts on brain gain have also been made in the region together with the countries around Serbia, such as Bosnia & Herzegovina, Albania, Montenegro and the Republic of Macedonia. A regional conference on migration, Mobility and Emigration of Professionals: personal and social gains and losses,  has been held in Belgrade on November 26, 2010, with the aim of sharing experience and ideas for managing migration in these countries and seeking a regional response to the brain drain phenomenon.

The current cooperation in the region has been developed with financial support from the Balkan Trust for Democracy and the initiatives of NGOs: Grupa 484 (Serbia), European Movement in Albania (Albania), Academia (BiH), Center for Democracy and Human Rights (Montenegro) and the Center for Research and Policy Making (Macedonia).

Complications and Bureaucracy

Even though there have thus been a lot of efforts made to encourage the flow of highly qualified experts back to Serbia, this is often made rather complicated by the lack of institutional support. People who are willing to return to their home country face difficult bureaucratic procedures, and are frequently disappointed by the lack of support experienced throughout the process. Such burdens are often the engine that pushes them to leave Serbia forever.

Another challenge relates to the extremely complicated and lengthy procedure required for the recognition of foreign diplomas. The process can take up to a year and can be quite expensive. The lack of coordination between universities and responsible ministries is evident. The procedure differs in all universities across the country: in 15 universities there are 15 different requirements.

When it comes to employment, the main problem is the absence of a national framework for qualifications which leads to non-recognition of professions, simply because they are not listed in the system. It has to be noted that even some people who graduated specific majors in Serbian universities face this problem!

Students who finished interdisciplinary or multidisciplinary studies abroad face even more hardships because the Serbian educational system does not recognise those degrees. The government is challenged in its efforts to address this issue. Even though officials are showing the will to deal with this challenge, according to Vesti, it turns out that the issue is far more complicated than it seems. Nevertheless some non-governmental actors are underlining the need for a sustainable solution, pointing out the major negative impact of the diploma recognition obstacle on brain gain strategies.

A New Proposal and Initiative

The leaders of Grupa 484 had the initiative to establish systematic support for returnees who need their degree issued by foreign universities to be recognised in Serbia. Currently, this proposal is being drafted and developed in cooperation with organisation such as NALED, BFPE, Serbian City Club and some others, with the aim   of simplifying the procedure for recognition of diplomas and qualifications.

“It is necessary to accelerate validation of diplomas obtained abroad, especially in prestigious European and world universities. It is preferable that through cooperation of university administrations in Serbia, a single list of the world and university centres is established for which diploma validation procedure is not necessary, but which will be automatically recognised taking into account the authority and reputation of the institution that has issued them.” – Recommendation by Grupa 484

Considering all these challenges, Serbian stakeholders – including the government -have realized the positive effects of brain circulation on the future development of the country. For that reason, they are stressing the need for cooperation with its Diaspora and exchange of knowledge across borders.

Thus the goal should be to stimulate the mobility of highly educated people and professionals preventing, at the same time, their outflow. In order to achieve this, it is not sufficient to encourage their return only in a symbolic way but also to provide all necessary conditions for the returnees’ inclusion into the labour market. A swifter process for recognising diplomas is just one of the institutional problems this country still needs to face.

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Since the Democratic Party, with its leader Boris Tadic, came to power in Serbia, the country has been moving towards EU membership, but many ask: at what cost? The pro-European party is losing the support of the people it represents, though its politics have brought visa liberalization for Serbian citizens and closer relations with the Union. The Stabilisation and Accession Agreement between Serbia and the EU was signed in 2008 and the country has this year returned the last set of answers to the Union’s questions before the preparation of the avis for membership (Government of the Republic of Serbia).

In addition to other conditions, which the neighbouring countries also had to fulfil in order to ask for EU membership, two issues were considered of fundamental importance for the Serbian bid: cooperation with the International Criminal Tribunal (ICTY), and the resolution of the question of Kosovo. Two years ago, Serbian police found and extradited to the ICTY the wartime leader of the Bosnian Serbs, Radovan Karadzic. During the past year, General Ratko Mladic and Goran Hadzic, have also been arrested. With these arrests, Serbia’s cooperation with the ICTY has been assessed as satisfying and a positive development towards the country’s EU future. The reforms and laws required to achieve candidate status were implemented. However, Kosovo remains the unresolved question.

The independence of Kosovo is a complicated issue. Historically, the area has been a cradle of the Serbian state, since the 12th century. Considering the role history plays in the politics of the Balkans, this is of utmost importance for the Serbs. Serbian religious and cultural monuments and churches are all located there. However, throughout modern history, due to migrations and wars, Serbs in Kosovo have become a minority. Today, 60 000 Serbs live there (BBC News).

Kosovo officially declared its independence in 2008, but the territory has been run by NATO (now supported by an EU law-and-order mission) since 1999. Although Serbia has maintained that the unanimous declaration of independence has never been accepted, it is taking part in the EU-administered talks in order to help resolve the situation to some extent and to deal with the urgent issues, which would facilitate the lives of the people in the area and allow for the movement of both people and goods.

The negotiations have resolved many of the contested issues, but the status of northern Kosovo is still problematic. The majority of the citizens are Serbs, who refuse to accept the jurisdiction of the new state. The most recent problem arose regarding the question of so-called ‘parallel institutions’ (Serbian institutions still in place in the north of Kosovo), border control and imposition of trade ban on goods from Serbia (which was done in response to a Serbian ban on products from Kosovo). The roadblocks set by the Serbs in the north, as a sign of protest of Kosovar border controls, are still in place, though there has been no violence (The National Interest).

Serbia insists that anything but negotiations leading to a diplomatic solution is out of question. The government is torn between the promise of EU membership and fighting for its territorial integrity. So, what can Serbia do in order to satisfy both demands? The status quo of northern Kosovo cannot be maintained for much longer. According to local media, Serbia has proposed a plan to the EU to resolve the disputed situation, however, the details of the plan have not been disclosed to the public. It is clear that the situation will have to be solved in order for both Serbia and Kosovo to join the Union.

This August, during her visit to Serbia, German Chancellor Angela Merkel announced that working out the problems in Kosovo is the fundamental step before Serbia can join the EU. She made it clear that no Serbian claims for the northern Kosovo territory will be accepted by the Union. Although officials from Serbia insist that the country does not need to choose between the EU and Kosovo, Ms Merkel’s visit suggested otherwise (The Economist).

It still remains to be seen how the situation will develop and what impact will the question of Kosovo and Serbia’s territorial integrity have on the country’s future within the Union. The possibility of Serbia giving up on the EU and fighting for Kosovo instead is unlikely. Although the EU is having internal problems with its currency and financial stability, Serbia has done too much to just turn its back on the Union now and blow the chance to get candidate status in December. Additionally, the fight for Kosovo would have to involve a military conflict, the possibility of which the government has ruled out. It must also be taken into account that the presence of EU troops in Kosovo would make any kind of military action from the Serbian side irrational.

The results of the Serbian parliamentary elections early next year will reflect the way in which this situation is handled. In case President Tadic decides to trade Kosovo for the EU, his party is very likely to lose the next elections. Mostly, the general public in Serbia sees the issue as one to which there should be no negotiations. Many Serbs are unwilling to succumb to ‘blackmail’ and trade Kosovo for the promise of EU membership, and often accuse the government of doing exactly that. There is a general feeling that they have been treated unfairly by the international community in the recent past, and believe that the question of Kosovo is no different. And with 22 EU member states recognising Kosovo’s independence, they don’t see how they stand a chance in any negotiations. Russian representatives in the UN agree with this view, stating that the international forces are taking sides with the Albanians, which further complicates an already grave situation (RT News).

The problem of Kosovo can either result in a mutually satisfactory solution or will be forcefully implemented by the EU’s local representative, EULEX, in which case violence remains a possibility. That would make it difficult to establish good relations between the two states in the future and to appease the Serbian minority in Kosovo, which is likely to either protest or feel forced to emigrate to Serbia, causing a complete ethnic exodus from the region. And, whatever Serbia decides might well not mirror the wishes of Serb in Kosovo. Can the government in Belgrade control their actions? They could decide to act against the imposition of the new state’s institutions, riot, engage in military conflict or even declare their own independence (TransConflict).

The EU is supposed to grant Serbia the status of candidate country this December, which would improve the ruling party’s chances of winning the parliamentary elections in 2012. However, Chancellor Merkel’s blunt message and the current crisis on the Kosovar border might not result in candidacy just yet. In the next few weeks, President Tadic’s diplomacy could still offer some surprises on how to appease the European integration and the Serbian territorial integrity.

Ms Licht is currently president and founder of the Belgrade Fund for Political Excellence, an NGO that is part of a Network of Schools of Political Studies in South East Europe, which itself operates under the auspices of the Council of Europe with the aim of creating and developing a democratic political elite.

Among her many distinctions, Ms Licht has recently been recognized by the European Movement in Serbia and the International European Movement with an award granted each year to “the person who contributed the most to the process of European integration and the promotion of European ideas and values in Serbia” – “Contribution of the Year Award 2011.”

Living Together- Separately?

Maria Neag: Given your work and research experience on issues related to human rights, minorities, cohabitation and ethnic conflicts, what could you tell us about Serbia in this context? Have Serbians yet recovered after the wars that dissolved Yugoslavia? What is their relationship with and attitude towards Serbia’s neighbours and other ethnic groups?

Sonja Licht: The disintegration of Yugoslavia left deep scars throughout the entire ex-Yugoslav space, from Slovenia to Macedonia. And it would be foolish to believe that it could be otherwise. Yugoslavia existed for more than 70 years. People did live together – from being neighbors to getting married and forming new family ties. Many moved from poor to more developed parts of the country. Economic, cultural, educational relations created numerous networks that were often very much interdependent.

Thus, the dissolution of the country would be a very painful process even without wars. The wars added to the traumas and tragedies. There are still more than half a million people in Serbia who came to the country as refugees during the nineties, and at least 100,000 so called IDPs, people who escaped from Kosovo immediately after the NATO intervention in 1999. This means, that among other things, the ethnic composition of some places changed quite dramatically.

For example, during the nineties many ethnic Hungarians left for Hungary (escaping the drafting or direct discrimination and pressure, finding better work opportunities, studying at Hungarian universities etc.). The percentage of Croats who left Vojvodina is even higher. During the same time, many Serbs from Croatia and Bosnia came to Vojvodina. Many of them joined relatives there who settled after the first and second world wars. All these processes, as results of wars and ethnic cleansings, made inter-ethnic relations even more difficult. And yet I am convinced that the overall development since the democratic, pro-European forces came to power 11 years ago is going in the right direction.

There is growing institutional recognition of the needs of minority populations, including all minorities, not only the ethnic ones. For example, the Law on National Minority Councils (20 councils in total) provides legal opportunities for minorities to form their own educational and cultural institutions and media in their own languages. I believe this approach of the state could be a major step in changing the overall climate as well, although the distance between various ethnic groups is still high- though decreasing in most of the cases, except toward the Roma. The other minority group still faced with a very strong animosity is the LGBT population. It is of utmost importance that all the social and political actors work on the implementation of the anti-discrimination law and, among others, strengthen the role of the Commissioner for Equality in Serbia.

The attitude towards Serbia’s neighbours is changing for the better as well. To mention a few examples: each July thousands of young people from neighbouring countries attend the Exit festival in Novi Sad; it became a custom that huge number of youngsters from Slovenia are coming to Belgrade to the New Year’s festivities. The number of Serbian tourists in Croatia is growing every year. In Montenegro, Serbian citizens remain the most numerous tourist group every summer. This does not mean that tensions disappeared. There are still political and other types of disputes, but the communication is becoming more intensive among ordinary citizens as well as between states officials, including communication on the most sensitive issues such as justice and home affairs.

MN: We are witnessing a polarisation of the political spectrum and the emergence of extremist and populist political parties in Europe, including Serbia. What role can or should the civil society play in the fight against the rise of xenophobia, intolerance and anti-migrants feelings?

SL: Civil society could and should play a much more comprehensive role than it is playing now. However, it is very important that both national authorities and international organizations, including the European Union, Council of Europe and OSCE take its potential much more seriously. Civil society could play a much more active role in opening new ways of communications and building bridges between various groups, by initiating public dialogue about difficult issues that concern the relations between the locals and the people with migrant background, issues that are sometimes too sensitive and unpopular for the politicians. Civil society should also play a more prominent role in life long education.

However, this requires a much more responsible attitude of the media toward the danger of rising xenophobia, intolerance and anti-migrant feelings and attitudes. It is sad to witness how independent, autonomous, progressive media – outlets that fought a courageous battle against the autocratic, nationalist regimes of the nineties both in Serbia and Croatia – have been disappearing since they were not able or ready to cope with the primitive but omnipotent commercialization of the media.

MN Both Angela Merkel and Nicolas Sarkozy have spoken of the failure of multiculturalism. Do you think the European identity will ever prevail over the national identities? What are the public and civil society’s views on this topic since Serbia is also a multi-ethnic country? What is the way forward to surpass this ideological/philosophical deadlock?

SL: I had the honour to be part of the Group of Eminent Persons of the Council of Europe that prepared the report “Living Together – Combining diversity and freedom in 21^st-century Europe.” The report based its recommendations firmly on the principles of the European Convention on Human Rights, especially individual freedom and equality before the law. It holds firmly that “identities are voluntary matter for the individual concerned, and that no one should be forced to choose or accept one primary identity to the exclusion of others.

It argues that European societies need to embrace diversity, and accept that one can be a ‘hyphenated European’ – for instance a Turkish-German, a North African-Frenchwomen or an Asian-Brit.” With its guiding principles and recommendations for action I believe that this report could be a very useful guidebook for debates, especially with young people and teachers, with the media and cultural operators, and, last but not least, civil society actors and political activists and leaders in designing various actions in fighting xenophobia and fear-of-the-other. Civil society in Serbia and our whole Balkan region has an impressive experience in dealing with these menaces and I strongly believe that we could both offer our lessons learned and learn from others how to establish a renewed, but extremely important, culture of living together in challenging circumstances.

The EU and Civil Society’s Influence in the Decision-making Process

MN: Many of the political decisions in Serbia are taken in order to pursue the European perspective and the EU is pushing forward the reform process. In this context, can the civil society be considered a motor for change in Serbia? In what way does the civil society influence the decision-making process?

SL: Civil society was the real motor of both resistance and change during the times of Milosevic’s autocratic regime. After the democratic forces came to power the situation became much more complex concerning the role of civil society. Some decided to focus on setting the agenda and build partnerships with the decision-making bodies, others to remain in a more or less pure watch-dog capacity, the third to deal with humanitarian and development issues etc.

I believe that diversification is extremely important for civil society’s strength and sustainability. It needs to remain independent from various power centers, including the political and financial ones, a very difficult approach to maintain when foreign donors are cutting down their assistance and the countries, including Serbia, are facing protracted economic crisis. And all this is happening in parallel with real potential for growing influence of the civil society on the decision-making process, especially in protection of human and minority rights, gender equality, civic education and capacity-building in general. Just to mention one of the latest examples: in May 2011, at the peak of the debate about changes of the electoral law, there was a strong push to avoid [the stipulation] that every third member of the parliament must be from the less represented gender. A short but well coordinated campaign by the civil society, supported by some political activists, prevented this from happening, and for the first time in the history of Serbian parliamentary life, every third member of the parliament will be a woman.

MN: Serbia is facing a difficult challenge with regard to young and educated people who decide to study and look for employment opportunities abroad. You and the NGOs with which you are collaborating have been very active in implementing programmes to address the “brain drain” phenomenon in Serbia. What were the most successful initiatives in this sense and what input has civil society brought to the drafting process of the governmental strategies for “brain gain”?

SL: Unfortunately the “brain drain” will be impossible to stop, especially in these times of severe economic crisis. What we are trying to do is to provide a better insight into the entire situation, and to help in designing methods for a parallel “brain gain” approach/policy. This means that we are advocating for a much better communication with both young people in the country and already abroad, for an easier access to job opportunities and diversification of ways by which those who remain abroad could be connected to institutions and projects in the country. We are organizing round tables and conferences that include all the relevant stakeholders and trying to encourage everyone – and especially the authorities – to develop policies and practices which would address these issues in a systemic and strategic way.

The International Community’s Presence in the Balkans

MN: During the wars of the 1990’s, the international community intervened in the interest of conflict resolution, peacekeeping and peace-building. It has remained present until today in the Western Balkans, and has influenced the democratic and economic development of the region. To your mind, is the international community’s presence still needed? How would you quantify its involvement in Serbia?

SL: The international community’s presence has been very important, I would say crucial in developing an autonomous civil society in Serbia and the entire Balkan region. I would have to limit myself to this part of the answer- otherwise this set of questions could be answered only in the form of a much longer text.

Although there have been different experiences with different organizations and donors, one has to be fair and to state that without them, an autonomous civil society would not have had a chance to develop as a genuine actor of social change. It is true that there were many mistakes, development of donor dependency- for example, misunderstandings of specific needs and problems of finding the right timing, especially in the second half of the nineties, but one has to be fair and say that without democracy assistance from abroad, including the huge support after the democratic change in October 2000, Serbia would not be the same country: it would have been much less ready to proceed on the path to European integration.

This support is still needed, of course, especially through various EU funds, both for institution-building and also for the development of political culture and development in general, for example, in the fields of environmental protection and the shaping of a new energy future for Serbia and the whole region.

It is very difficult to quantify its overall involvement, but let me give you again two concrete examples related to my organization. At the beginning of 2011, the Belgrade Fund for Political Excellence initiated the launch of a new event- the Belgrade Security Forum. There have been similar regular events in Bratislava, Riga, Brussels and Munich organized for years. In partnership with two other CSOs, the European Movement in Serbia and the Belgrade Centre for Security Policies we are organizing the First Belgrade Security Forum, September 14 to 16 this year with more than 70 distinguished guests from abroad.

This would simply have not been possible without the generous support of the Slovak, Czech, US, and Norwegian governments, the UNDP, the Balkan Trust for Democracy of GMF, the European Fund for the Balkans and a few local corporate donors. The same is true for another project we are working on, Public Dialogue for Sustainable Use of Energy in SEE. This project was launched with the support of the German GIZ and the International Visegrad Fund. I am mentioning these two projects as personal testimony for why, without international donors they would either have to wait for years to be realized or would not happen at all.

MN: Recently, we have seen a withdrawal trend of the US from Balkan affairs. The US is stepping back while the EU is showing more and more interest in becoming a mediator in the remaining conflicts in the region. Is this shift of international actors going to affect Serbia?

SL: It is fully understandable that the EU is taking a much more active mediating role in the Balkan region, including the dialogue between Belgrade and Pristina. All these countries want to join the Union, and the Thessaloniki agenda is still on the table. On the path toward full integration in the EU, it is absolutely essential to build the strongest possible mutual understanding and trust between all of us and our future “home,” especially having in mind that we shall also be active participants in a common European foreign and security policy and possibly even a common fiscal policy (given that the membership of these countries, except Croatia, is still quite far away).

Present Leaders and the Future Political Elite of Serbia

MN: As the Belgrade Fund for Political Excellence (BFPE) promotes leaders engaged in the political realm, as well as in the administrative sector, media, culture etc., it is clear that you had the chance to get familiar with the activities and goals they embrace. What can you tell us about their backgrounds? What are the criteria for receiving consideration from your organization?

SL: BFPE worked with several hundred people from various political parties, including those who occupy very high positions, more than a hundred MPs, many local officials, as well as people coming from all other relevant sectors of the society. First of all, the majority of those who take part in our programs do so because they are eager to learn more about topics covered by BFPE: from the functioning of European institutions to the major issues related to stability, security and regional cooperation, from economy to ecology.

We have also organized specialized seminars on minority and human rights, human security, empowerment of women in politics, poverty reduction, energy efficiency, how to face climate change, etc. People participating in these programs gain additional knowledge but also use these opportunities to get to know each other better. There are still very few inter-party, inter-sectoral dialogues in Serbian society; thus by participating in our programs they also create informal networks and start to understand each other much better. Our main requirements in selecting the participants are that they come from different institutional and organizational backgrounds, want to learn, to transfer experience and are ready for mutual exchange in a tolerant atmosphere.

MN: Could you say that Serbia’s leaders are, somehow, atypical?

SL: I don’t think that they are atypical at all. We have many regional gatherings where participants from other schools of our Network come together, and once a year there is a major gathering at the Summer University for Democracy in the Council of Europe. In all these situations it is more than visible that especially those from our region not only share the same concerns and hopes, but that they find a very easy way to communicate with each other. Tim Judah would find this to be a genuine proof of his theses about the ‘Yugo-sphere.’

MN: What about the future political class? Did you notice any noteworthy evolution among the young politicians? How prepared are they to face future Serbian and EU challenges?

SL: It is extremely important for them to find their own ways of expression, to define their own views and not to be only followers of the existing patterns of political behavior. I am hoping that our activities, as the activities of our entire Network (16 schools in total, with one in every capital in the Western Balkans) will contribute to the development of their knowledge and self-esteem and even attract some additional bright, decent, socially conscious young people to take part in political life. I must say that in my opinion, most of our participants are ready to face the future Serbian and EU challenges, but I am hoping for even more: for a new generation of politicians both in Serbia and Europe who will bring ethics back into politics and to build a political class that will enhance democratic governance and restore citizens’ trust in politics.

Serbia’s Role in Reinventing the Balkans

MN: In a speech made during an event in the European Parliament (Serbia and its contribution to the regional cooperation in the Western Balkans, May 26, 2011), you stated that Serbia has the role of reinventing the Balkans as a European place. By what means could Serbia undertake this responsibility?

SL: Serbia and all the other countries of the region, I strongly believe, have the same responsibility and the same opportunity- to develop not only themselves but indeed the whole region into a genuine European place. When you speak with citizens from any of these countries they will all tell you that they are very proud of their history, of their cultural heritage, of the fact that since Roman times they have been part of Europe.

However, this is not enough to be part of the common European space. We must adopt all those values and standards built by contemporary Europe, i.e. the EU. And we also must convince this very special club that we are bringing in some added values. These values are [not only] our cultures, our potential to face the past and get rid of our demons, but also our geography and our history.

MN: Can the Balkans be called a “success story” considering the clashes of the past and the unresolved issues regarding Kosovo or the difficult situation in Bosnia & Herzegovina?

SL: Yes I am absolutely convinced that the Balkans is one step away from being considered a “success story”- of course, when compared with other post-conflict areas in the world today. A decade after the armed conflict ended, we have developed relations in some of the most sensitive areas, such as cooperation in fighting organized crime, in the military field, as well as in other relevant security areas. Economic cooperation is growing, as well as educational and cultural exchanges. [Not to mention] the growing awareness that only as a region can we provide enough energy security and thus development for our countries.

The signs about a changing climate are everywhere: just a few days ago the Belgrade Philharmony, conducted by Zubin Mehta, was met in Dubrovnik with ovations. Film directors are regularly inviting actors from various Balkan countries to play in their films, concerts of Serbian singers in Croatia or Bosnia & Herzegovina, and vice versa, are not news any more. When the Macedonian Tose Proeski, singer, song-writer and actor was killed in a car accident the entire region was in mourning. And the most popular Croatian pop-singer Severina is expecting a baby with her Serbian boyfriend, while all the popular magazines are following her pregnancy with great interest and sympathies. The ingredients and potential for a “success story” are already present, it depends on all of us and especially our political leaders as to whether they will be wise enough and responsible enough to transform them into a long-term policy, and thus to secure the European future for our entire region.

In this detailed new interview for Balkanalysis.com contributor Cristian Dimitrescu in Belgrade, however, former State Secretary of the Ministry of Kosovo and Metohija Dušan Proroković provides an informed and detailed situation report on the factors involved with current and future negotiations, the role of foreign powers in Kosovo diplomacy, and the current escalation of tensions in the north.

Dušan Proroković served as State Secretary of the Ministry of Kosovo and Metohija from 2007-2008 and, from 2004-2007, was Chairman of the Committee on Kosovo and Metohija in the Serbian National Assembly. He was also a member of the Parliamentary Assembly of the Council of Europe, and member of Parliamentary Assembly of NATO. Today, he works under the auspices of the Serbian think-tank Center for Strategic Alternatives, and as an associate of the Foundation Slobodan Jovanović.

……………………..

Cristian Dimitrescu: When, in 2006, Serbia declared its independence, the country was already engaged on a European path: since 2001 it had been part of the EU-FRY Consultative Task Force (CTF), a member of the subsequent Enhanced Permanent Dialogue (EPD) and, starting in October 2005, it became involved in negotiations with the EU on the Stabilization and Association Agreement (SAA). If you recall, what prospects did you foresee for the country at that time and what were the major shortcomings you expected to be encountered in the short- and medium-term?

According to Dušan Proroković, “the solution for Kosovo will have to be looked for in a new security and political framework that will be defined for the Balkans in the coming decades.”

Dušan Proroković: After the fall of Slobodan Milosević in 2000, a desire emerged in Serbia to join the EU and there was a hope that this could be done within a reasonable time. First, Serbia did not have some other clear alternative and all countries in the region were already in some stage of EU accession. [Serbia was] a country that had just gotten out of the dreaded sanctions that had caused isolation. Secondly, the EU looked like an opportunity for successful integration and challenging society. Thirdly, European integration had become heterogeneous – the EU had just received Eastern European countries which were in a similar economic situation as Serbia. And fourth, it appeared that the supranational framework is a desirable model for solving the accumulated international problems in the Balkans.

Three reasons are usually stated as an explanation for why Serbia has not yet joined the EU. First, in the last 15 years, from a successful commercial alliance the EU has become a geopolitical entity with vague goals and often conflicting interests of the leading states. There is no consensus on the admission of Serbia among key member states. The EU as a whole is not even sure why she needed Bulgaria and Romania. Second, at the very moment when Serbia accelerated its European integration the economic crisis – which in the last two years has started spreading, like an epidemic – had just begun. And third, one question becomes more and more relevant: where are the borders of ‘Westliche Hochkultur’- Western civilization and the Western cultural pattern? What is the place and role of Orthodox Christianity in the new geopolitical makeup of Europe? All these dilemmas had an impact on slowing down and finally, essentially, stopping Serbia’s EU integration. However, the key to the whole process is something else.

Willy Wimmer, a former vice-president of the OSCE Parliamentary Assembly and a long-time MP of the German CDU in the Bundestag, attended a closed meeting in Bratislava, organized by the US State Department in the spring of 2000. Regarding the findings from this meeting, he informed the German Chancellor Gerhard Schroeder and later the German public in an interview for “Blätter für deutsche und internationale Politik” in summer 2001.

European Antecedents

It came down to this: General Eisenhower had failed to deploy ground forces in the Balkans as a geopolitical hub in 1945, and so the US must not repeat this mistake. In this sense, the US expected the support of European countries, and those countries, like Serbia, whose support in the long-term they could not count on, would be denied access and opportunities for rapid and sustainable development, and would be subjected to peaceful isolation.

In Henry Kissinger’s book, Diplomacy, there is one map that represents Southeastern Europe before the First World War, and under the Serbian name there is a note saying, ‘Russian ally.’ Nothing similar was written on any other map or under the name of any other state, not even on a map that explains the very complicated alliances after the Thirty Year War (1618-1648).

Serbia had clearly become a danger for British geopolitical interests even in 1813, after the Russian-Persian agreement on the influence zones in the Caspian and Central Asian region. The British had tried to slow down Russian advances in the southeast, fearing for their possessions in India. That is why they tried to open a new “soft belly” of Russia in Southeastern Europe.

Because of that, the Ottoman Empire had a great significance for them. France and the Austro-Hungarian Empire also had an interest in this idea, and restless Serbs were just a ‘disturbing factor.’

The US took on fully the British attitude in this matter in the early 1990s. The current situation on the Balkans in full represents a result of this fact. That is why, viewed from today’s perspective, we can say that the European powers historically were never actually interested in Serbia as a subject, but rather as an object of international relations.

Strategic Limitations

CD: As Kosovo is one of the prominent issues on Belgrade’s agenda, we cannot avoid acknowledging the different frameworks employed to clear the way for sustainable outcomes: the United Nations Interim Administration Mission in Kosovo (UNMIK) established by the June 1999 UN Resolution 1244, and the EU facilitated dialogue between Belgrade and Priština set through the September 2010 UN General Assembly Resolution 64/298. How dedicated is Serbia to such initiatives, and how much responsiveness and openness did it receive from the Kosovar side at the level of the aforementioned structures?

DP: The EU has expended a lot of energy in persuading others that the ‘creative interpretation’ of the international law is the legal basis for its engagement in Kosovo. The existence of multiple parallel legal frameworks in Kosovo is a proof that the situation is not legally clear. The EU engagement in Kosovo is based on illegal decisions. This is the main reason why we have such a complex legal and political system in Kosovo today. Negotiations will not change this.

First we need an answer to the question: why do we have the current negotiations? From Belgrade’s perspective these negotiations are a shortcut to EU membership candidate status, something that President Tadić sees as an important electoral asset.

From Priština’s perspective, negotiations present a chance to be accepted as an equal partner by Serbia and a possibility of de facto recognition of their independence, if Serbia accepts signing of bilateral agreements.

It should also be stated that Belgrade is limited by the Serbian Constitution and no intergovernmental agreements with Priština institutions can be signed. On the other hand, Hashim Thaçi is limited in a political sense- in order to preserve his shaky parliamentary majority, he cannot agree to another ‘original’ solution that would only affirm Priština’s unequal position compared to that of Belgrade. In such circumstances one cannot expect that an agreement will be achieved, nor that Belgrade will get candidate status, or that Kosovo will be de facto recognized by Serbia.

The EU will spend a lot of energy in order to convince the international public that the sustainable and functional agreement between Belgrade and Priština has been achieved. The failure of these negotiations would be marked as a failure of the EU and that would have a bad influence on Brussels’ image. This is how we will soon see some ‘creative interpretation’ of the political reality.

CD: In an interview for the Associated Press, Serbian Minister of Foreign Affairs Vuk Jeremić said that the agreements reached at the end of the fifth meeting of the Belgrade-Priština dialogue, on July 2, owe to the fact that the Kosovar counterparts “moderated their demands.” As one who has held, for some time now, a great deal of interest to this matter, could you be more specific regarding this ‘moderation’? What exactly is it that Kosovo’s negotiators have conceded?

Out the Window

DP: The message of Minister Jeremić was primarily addressed towards the local public. The need of Serbian officials to constantly present something as a success is in fact the proof that the Serbian government cannot commend itself [as having made] some visible results.

Having in mind what was asked of them, the pressure they were under and what the final results were, we can say that Serbian negotiators have achieved a certain success in the July talks in Brussels. However, that was their personal success. The question is: what kind of benefit will Serbian interests have from this in a final result? It is as if we have fallen from the second floor of a building onto a concrete sidewalk and now feel triumphant because we have only broken our legs, but we are still alive. We need to seriously address the issue of why did we fall? Why did this happen?

President Tadić made a strategic mistake in September 2010 when he accepted the ultimatum of the EU and a resolution written in Brussels, which was subsequently adopted by the UN General Assembly. In doing so, President Tadić accepted that instead of the UN, where Serbian still has the overwhelming support and understanding for its own attitudes, the Kosovo issue should in future be resolved by the EU, where Serbia has neither support nor understanding.

He explained this move, although very unconvincingly, with Serbia’s need for ‘EU integration.’ But this was more a reflection of his expectations, than an argument-based political position. Since September 2010, to quote former Serbian Prime Minister Vojislav Koštunica, the Serbian policy has been wandering like “a blindfolded man in the dark.” That is why Serbia fell out of the window and slammed down on the concrete.

Import Ban Ramifications

CD: On July 20, the Kosovar authorities introduced an embargo on import of goods from Serbia. This decision, agreed upon by the Government of the Republic of Kosovo on the proposal of the Ministry of Trade and Industry, was officially explained by the Kosovo government as a “measure of reciprocity in trade exchanges” caused by “the failure to reach agreements on recognizing Kosovo custom stamps in exchange for free trade of goods.” How does the reaction fit national and international legislation and what are the economic consequences Serbia will have to face due to this measure?

DP: There will certainly be some economic consequences for Serbia, but they will be short-term. Serbian producers sell annually to Kosovo goods worth above 300 million euros. Most of these are food products and construction material. There were hints in 2008 that something similar would happen at the time when Kosovo Albanians adopted a unilateral declaration of independence. At that time a plan to re-export Serbian goods to Kosovo through Montenegro and Macedonia was being elaborated. In that way Serbian goods would be a bit more expensive, but their prices would still be competitive.

I do not know whether Serbian state authorities are considering a similar plan this time, but even if they are not thinking about this, businessmen will do it on their own. Therefore, the measures taken by Kosovo Albanians cannot drastically hurt the Serbian economy. As for the question about the legality of this decision, I believe that this question is not in place. How can we talk about the legality of one decision in a situation where everything else is illegal?

CD: The ban on Serbian goods came just before a new meeting of the Belgrade-Priština dialogue, scheduled for July 20 and 21. The agenda was supposed to cover issues such as telecommunications, customs stamps, energy supply, cadastral records, mutual recognition of university diplomas, etc.

In a press statement dated July 19, the EU mediator for the dialogue foreseen in UN General Assembly Resolution 64/298 Mr Robert Cooper, assessed that “we have now reached a stage in the dialogue where agreements are part of the process” and that “there are a few issues that are ready or very close to agreement… in accordance with [the] EU acquis and in line with international standards.” Could you specify what are the items on which Serbia is ready to agree with Kosovo?

A Growing Dissatisfaction

DP: Belgrade and Priština have a range of topics they need to discuss because they are in their mutual interest. But there will not be a serious dialogue any time soon, because that would mean that both sides would be ready to make some concessions. On the one hand the position of Belgrade is not so good. Serbia has no political, diplomatic or military force to convince Albanians to negotiate, and to get them to see that they need to make some concessions in this respect. Albanians, who have a saying – ku është shpat, është feja – ‘where there is a sword there is faith,’ have realized that the sword is in the hands of the United States.

This is why they strongly, at any cost, hold on to Washington, which has no interest in any kind of rehabilitation of Serbia. On the other hand, the mess made in Kosovo in the last decade has left terrible consequences. The situation in Kosovo today resembles the situation there during the late 19th and early 20th century. Collective frustrations are enormous, tension is felt everywhere and lack of prospects has never been greater. Directing part of the growing dissatisfaction towards Serbia and Serbs is one kind of a vent, which cannot be used much longer.

The only job young people from Kosovo can find for sure is to become a part of criminal gangs involved in smuggling heroin. Since, similar to the case of Afghanistan, no plan for sustainable development can be found, the West eventually began to tolerate parallel criminal structures that provide some sort of income for people. That is why the illusion of peace will exist only until NATO and the EU tolerate these activities. How long this will last we cannot predict, but we can see that activities of Kosovo Albanians in Europe are increasingly becoming an obstacle, and that at some point NATO and the EU will have to respond to these challenges. This response probably will not differ much from the Young Turks’ attempt to impose order among Kosovo Albanians at the beginning of the 20th century. And this will only make the situation worse than it already is.

Demonstrations of Strength

CD: The issue of custom stamps was a sensitive one, which developed a certain history of its own. However, why do you believe the decision was taken, and announced shortly before the beginning of the new round of negotiations and not, eventually, after discussing officially the matter during the meeting? For how long have the parties conducted these concealed consultations aiming to find a compromise to this issue which, apparently, became a deal-breaker at this stage of the negotiations?

DP: There are two reasons why Hashim Thaçi entered negotiations. The first reason is an attempt to obtain de facto recognition from Serbia, something that will not happen as he had planned. The second reason is the external pressure he was under, especially from the EU, which he sought to dispel. This is why the last weeks of crisis in Kosovo was a chance he could not allow himself to miss.

On the one hand, it provided Thaçi with the opportunity to enter future negotiations with a stronger position- he will thus have no regrets even if negotiations fail, because he has achieved his main goal.

On the other hand, he has demonstrated his strength to the EU and once more has shown that he enjoys the full support of Washington, something the EU will have to take more seriously into account. Also, Thaçi does not look favorably on a number of investigations led by EULEX for war crimes and organized crime against people close to him. So, furthermore, this was a way for him to strengthen his position within domestic politics.

The main problem for Serbs is that the use of force and embargo by Hashim Thaçi is just the beginning of his campaign. What will he come up with for the next elections? Charged as an organizer of the illicit trade in human organs, a head of political organization whose members and sponsors are questioned by EULEX, [having achieved] no success in economic policy, faced with bankruptcy, he will have no other way out but to start a campaign of taking over Serbian Northern Kosovo.

With a combination of the use of force in the establishment of Priština institutions and intimidation of the Serbian population, Thaçi will re-impose himself as a key politician in Priština who can get another four-year term in government. A number of people are urging him to do this, also, for historical reasons. If he occupies Northern Kosovo he will be remembered as the Albanian hero who established full Kosovo sovereignty, whatever this means. Being an important and discreet American player he will most probably get the full support of Washington for this.

Escalating Tensions in the North

CD: Recently we’ve been witnessing an escalation of tensions and violence on the ground: Kosovo Albanian police seizing the border crossings of Brnjak and Jarinje, located in the Serb-dominated northern regions, leading to sharp reactions from the Serbs in the region, including an exchange of gunfire and setting of barricades.

As a result, in a Declaration on the current situation in Kosovo and Metohija adopted by the Serbian National Assembly on July 31, the protection of the legitimate interests of Serbia in Kosovo and Metohija was declared a priority of the state institutions and public factors in the country, until a compromise solution is adopted; at the same time, it asks the government to continue the dialogue with Priština, while doing “everything it can to protect life and property, rights and freedoms of citizens of the province.”

Corroborating this stance with the August 1^st closed-door meeting, between chief negotiator Stevanović and minister Bogdanović with Serb representatives in Zvečan, an ethnic Serb-dominated town in northern Kosovo, one can clearly see a display of support and engagement.

However, given that – as you previously said – Serbia is not in the best political, diplomatic, and military position to force the ethnic Albanians to engage in conclusive negotiations with Belgrade, what are the tools the Serbian government can use in order to fulfil the tasks referred to in the Declaration? How and to what extent can the Serbian authorities protect the Serb communities in Kosovo and Metohija?

DP: The Serbian government has moral, legal and political reasons to react. Between 70,000-100,000 Serbs are living in Northern Kosovo. They are citizens of the Republic of Serbia, and Serbia has a moral obligation to help them.

It is not in the interest of Serbia to create an unsafe environment in the north, but, at the same time the Serbian government cannot just stand and watch a humanitarian catastrophe unfold in Northern Kosovo, starting with shortages in medicine, food and energy supply. The Serbian reaction will for sure cause a counter-reaction from Kosovo Albanians, NATO and the EU, but at the moment Serbia does not have another choice. Legally, Kosovo is part of Serbian territory, and Serbia has full legitimacy to act. No international court can deny this right to Serbia. However, in the current political situation NATO and the EU can always limit or even suspend the actions of Serbian institutions in Kosovo.

But even so, the Serbian government has to react for political reasons- for if it does not react, the Serbian government will risk weakening its already unstable and low rating in the coming election period.

The official Serbian request is that the situation in Northern Kosovo be returned to the previous condition. This will not happen. KFOR will not withdraw from the administrative crossings, and Hashim Thaçi will not give up the institutional occupation of Northern Kosovo. Serbian negotiators will not be able to persuade him to do this by any arguments.

If the Serbian government wants a result and diplomatic victory it has to use more radical solutions, such as full blockades on the Serbian side of the administrative line as well, an embargo on shipments of goods and services to Priština (the threat of stopping electricity transfer can be a pretty persuasive argument), rejecting further negotiations because of a deficit in democratic legitimacy and capacity of the government led by Hashim Thaçi… these would lead to further worsening of relations between Belgrade on one side, and NATO and the EU on the other. Is the Serbian government ready for something like this? I think not. But at this moment, I do not see any other way in which the Serbian government can react without turning out to be the complete loser.

The Outlook for September

CD: Following the trade embargo and the reaction of the Serbian side, mediator Robert Cooper, considering there to be “no point in holding a meeting unless we’re going to be able to reach an agreement on something,” decided to postpone the sixth round of the dialogue until September, when there “will be a better prospect of agreeing on quite a number of issues.” Apparently, just as in the case of the previous such encounter, Mr Cooper took this decision in order to allow the parties involved the necessary time for doing “a little bit of thinking” and working on possible solutions. What should we expect from the September round of discussions?

DP: Robert Cooper is a politically educated man with enviable experience. These kind of people are rarely found among the loads of bureaucratic careerists in Brussels. However, he represents the paradigm of EU involvement in Kosovo. How come a man who wrote about the disintegration of nations happened to be named as a mediator in a problem with exclusively national roots? That’s like if a man who smokes two boxes of cigars a day was giving lectures on the dangers that tobacco presents.

Under normal circumstances, this mediation would be destined to fail even before it began. However, viewed from the Serbian side, negotiations are already taking place in abnormal circumstances. Since the election slogan “there is no alternative to Europe” has become the official policy of the Serbian authorities, Serbia started accepting almost everything coming from Brussels, without any critical attitude and without previous definition of self-interest that must be protected.

It is therefore likely that the Serbian authorities will accept the majority of future proposals from Robert Cooper. Still, the problem for this presents limitations imposed by the Serbian Constitution. That is why a special mechanism was set up for defining the conclusions. There is not going to be any signing of documents between Belgrade and Priština, but the binding conclusions for both parties will be defined in a statement of Robert Cooper, who is probably also the one who guarantees implementation of these arrangements. That is why the direction in which the negotiations will develop will mostly dependent on future relation between Brussels and Priština.

The International Recognitions Battle

CD: Up to now, 76 out 0f the 192 UN members and 22 EU Member States have recognized Kosovo’s independence. Even though at a slower pace, the trend seems to be continuing, with Andorra the latest country to recognize Kosovo.

That said, how will the remaining states succeed to balance their position on Kosovo in the presence of the two main stances promoted, through political and diplomatic channels, by the US and Russia?

DP: The West has shown all of its weakness in the process of bilateral recognition of Kosovo. Until Saudi Arabia joined these efforts, only around 50 countries had recognized Kosovo. Out of this number, if we exclude the EU and NATO members, some small states, island states and semi-dependent states, only seven other countries from around the world that could be called mittelstaat or regional powers recognized Kosovo independence.

This shows the full diplomatic influence of the Western, Euro-Atlantic part of the world on a global scale. Therefore, the western part of the world had to start the search for allies that could help in this process. The ally was found in Saudi Arabia, which could influence around another 15 countries thus contributing to a significant increase in the number of countries that recognized Kosovo. It’s true that among these recognitions there were some bizarre examples like Somalia who recognize the secession of Kosovo although on its own territory it had two self-proclaimed states – Somaliland and Puntland, while a third one was being formed.

On the other side, though, are all the BRIC states and a large number of influential regional powers that are trying to promote a fundamental respect for international law. Russia has directly tied the question of Kosovo status to the question of the status of Abkhazia and South Ossetia, which only made it more complex and harder to resolve. The only way for Kosovo Albanians and their Western allies to come to a positive solution is for Serbia to recognize Kosovo. However, despite the enthusiasm expressed by certain Serbian politicians, at this time this is impossible.

A New Balkan Framework

CD: For a long time the entire international community is advancing solutions for the situation in Kosovo. The UN, the EU, the US and Russia have all expressed themselves in this regard. Out of the available proposals, which ones do you find more suitable?

DP: When the Austro-Hungarian Empire withdrew from Bosnia and Herzegovina in 1918, it left behind a society in which 88% of the population was illiterate. There is no need to explain how the economic, political, scientific or educational system in this society looked. The EU will leave a similar result behind in Kosovo.

The main reason for this is that power, either “hard” or “soft” is seen as the key measurement for reaching a solution. Negotiation and other solutions based on international law and diplomatic compromise are thus put to the side. For example, a good framework for solving the Kosovo problem could have been the conclusions of the Badinter Commission- the boundaries of the former federal units were there declared internationally recognized and problems within these borders were supposed to be resolved by international mediation. With the unilateral declaration of Kosovo Albanians independence, however, this rule was violated. A new norm of establishing borders on ethnical principle was launched.

The West has made a huge mistake and cannot go back anymore. In the future the West will have to be aware of the new reality that is being created in the Balkans. The solution for Kosovo will have to be looked for in a new security and political framework that will be defined for the Balkans in the coming decades. To make this framework more viable it would be advisable to seek a solution with the participation of the US, EU, Turkey and Russia.

Final Observations

CD: Then, considering also some of the recent events in Serbia – such as the visit of Russian Prime Minister Putin, the July 2^nd agreements concerning the “areas of civil registry, freedom of movement and acceptance of university and school diplomas,” the trade embargo, the preparation of the following meeting of the dialogue foreseen in UN General Assembly Resolution 64/298 etc. – how would you briefly define Serbia’s solution to the Kosovo issue and what developments do you envisage?

DP: It is too late now to ask what Serbia is suggesting. And it is not even correct to ask that kind of question. Serbia had a moderate proposal, limited to 20 years, proposed in November 2007. This proposal was easily rejected by the US and the EU. The self-declared independent state of Kosovo’s Albanians is today in a catastrophic position, first of all diplomatically. Its president, Atifete Jahjaga, had not been heard of before [the election]- diplomats serving in Priština say that when the American ambassador told four party leaders that she was the US favorite for president, none of them knew who he was talking about. So they had to call the interior minister, Bajram Rexhepi, as Jahjaga was working in the police, to inquire about this person who they were supposed to vote for. Not knowing why they were asking about Jahjaga, Minister Rexhepi’s first reaction to ask if he should fire her.

Also, the prime minister of the Kosovo government is accused of being one of the organizers of human organs trafficking, one of the most monstrous war crimes in the territory of the former Yugoslavia. A person dealing with accusations from ICTY for war crimes is one of the opposition leaders. Another opposition leader has given a political legitimacy to Great Albania and does not care a whole lot about international representatives’ opinion.

In Kosovo, GDP per capita is on the same level as the GDP of East Timor. Pensions are around $60 per month. The unemployment rate today is above 50%. Only one-third of the state budget of Kosovo is made up of sustainable sources. Another third is coming from internationals donations, and the final third believed to come from money laundering from smuggling of narcotics.  There are no prerequisites for sustainable development in Kosovo.

But Serbia should be interested in some other issues. USA and the EU have taken the full responsibility for the development of situation in Kosovo so this is the issue that they should worry about. The Serbian interest in Kosovo at this moment should be aimed at taking care of the Serbian population, the preservation of Serbian cultural heritage and creating stronger foreign political ties with countries that support Serbia’s position. Serbia has a moral right to lead a self-centred policy regarding Kosovo.

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By Kostis Geropoulos in Athens*

Serbia may not be part of the European Union – at least not yet – but its northern region of Vojvodina is striving to meet the bloc’s 20-20-20 goals to battle climate change and drive energy sustainability in the Balkans- on its own, if need be.

Vojvodina is at the forefront of renewables and energy saving, trying to meet EU climate change goals. “Yes, of course, [meeting] European goals and targets is a part of our policy because an EU future is at the center, it’s at the heart of what we are doing as a government so energy policy is devised in this context as well,” Serbian Foreign Minister Vuk Jeremic told me on 19 May at a seaside resort in Lagonissi, south of Athens.

He was speaking on the sidelines of a conference that discussed current developments in the region. Asked if Vojvodina’s energy policy would reduce reliance on natural gas, Jeremic said that “renewable energy is the future as far as we see it, so we are looking to develop as much capacity as possible.”

Further, Branislava Belic, Vice President of the Vojvodina Assembly, told me earlier this spring on the sidelines of a climate conference in Brussels that “Russian gas is too expensive, and it was always expensive, so this is an initiative.”

She noted that her region of Serbia in particular is on the right track. In March, Vojvodina completed the Peer Review, in a joint project with the Assembly of European Regions (AER) and the Central European Initiative. She stated in Brussels that experts have observed that this project has very strong political support.

In addition, added Ms Belic, her region has “well-drafted strategies in several energy-related areas [and] important competencies in key section fields.” She mentioned in addition that the population in Vojvodina has the mentality of a global player.

Experts have recommended that in accordance with the government of Vojvodina each local community should continue with improving energy management. They would organize monitoring and energy audits, explaining the benefits of saving energy and, at the same time, saving personal budgets, she told me. Belic said that Vojvodina has a very good project line with EU funds, but no specific budget for energy issues, and that “the State gives very weak financial incentives.”

Nevertheless, while Ms Belic added that Vojvodina has rich experience in cross border cooperation, it does not yet boast similar experience in the field of public private partnership. “Since the Temerin municipality already has renewable energy potential, we have to focus on coordination of technical actors,” she said, referring to energy managers and consultants, as well as plans to include and coordinate communication with NGOs, schools, and local politicians.

“The project has started with an improvement and I hope it will continue that way,” Belic said, referring to a primary school and a kindergarten in Sirig. “This is a new trend in Vojvodina, of using more and more renewable energy,” she said.

As Foreign Minister Jeremic told me, Serbian energy policy is aimed at meeting EU rules and goals. But some are skeptical. For Sanja, a spirited 24-year-old woman from Subotica, Vojvodina’s second largest city, it will be a very long time before Serbia joins the EU. “Vojvodina could join on its own,” she told me laughing. “But the rest of Serbia is far behind.”

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*Guest contributor Kostis Geropoulos is the Energy and Russian Affairs Editor of the New Europe newspaper. His weekly column, “Energy Insider,” is available at www.neurope.eu, and he can also be followed on twitter (@energyinsider).

Editor’s note: with Western Balkan governments seeking to demonstrate their commitment to EU accession reforms, major steps are being taken to promote transparency implement rule of law, and tackle organized crime. The present investigation discusses the past, present and future of the latter in the region, in light of the evolution of (and cooperation with) Italy’s major mafia syndicates.

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Joining the European Union is, without doubt, the main goal of every Balkan country not already part of the bloc. In the last few years, many requirements have been met by several aspiring states; Croatia and Montenegro are now official candidate countries, while status may be given this year to Albania and especially Serbia – the latter having now fulfilled one key requirement when it arrested former Bosnian Serb General Ratko Mladic last week. Macedonia has made many necessary reforms, with the main obstacle remaining being something completely unique and unrelated to the typical EU accession package (that is, the name issue with Greece).

Among the key political, economic and social goals required for getting into the EU, the most problematic have often been full collaboration with The Hague Tribunal and international police, and the willing prosecution of organized crime- which, in the Balkans, refers especially to human, drugs and arms trafficking.

Perceptions of Old-School Balkan Mafia: Warlords, ‘Nationalists,’ and Territorial Control

Many stereotypes linger about the binomial relation between mafia as a concept and the Balkans. During the wars of the 1990s, these stereotypes became part of that orientalistic interpretation of the war portrayed by many Western media outlets: the Balkans was depicted as an indistinct area, a land of war and hatred, a region led by despots and inhabited by crooks and people who were, generally, desperate sorts.

This public perception must be the reason why, paradoxically, the role of mafia and organized crime – and their connections in finance and politics – are often underestimated or “taken for granted” by journalistic and academic analysis concerning Southeast Europe. One thus might note (with some despair) that news regarding people and institutions involved in organized crime affairs are more and more being confined to judicial reporting or specialist publications.

An article published on December 21, 2010 by Montenegrin weekly Monitor aptly depicts the image surrounding the predecessors of today’s Balkan organized crime groups. During and after the wars of the 1990s, in most former Yugoslav countries, public power was understood to be based on a mixture of “kleptocracy, organized crime and alleged patriotism;” in that period, state officials in Zagreb, Sarajevo, Pristina, Podgorica, Skopje, Belgrade and so on, transferred large amounts of national resources into their own hands and into the hands of their local elites.

Propaganda was their principal ally, the story goes, and their weapon, spread by controlled and accommodating media, and certified by integrated intellectuals, historians, academics: all actively involved in the construction of new national stories. This propaganda was so capillary that its traces can be seen still today, in the history taught at schools and in the language spoken in everyday life.

A machine devoted to transmitting a precise story: leaders were acting to save the country and its population from their enemies, with anybody who denounced these crimes actually a criminal himself; as a consequence the people, impoverished and frightened, attested through their ballots the rule of these leaders.

During these years, criminal organization, mafia groups and local clans acquired a central role in supporting political leaders, doing the dirty work and profiting from smuggling, black market, drug and human traffic across the renewed Balkan state borders.

Belgrade at the turn of the millennium was a bombed city transformed into a battlefield for gangs, where bosses and smugglers went to wash dirty money financing the building of new apartment blocks and commercial centers in Novi Beograd.  The leading faction was then the feared Zemun clan, located in the so-named suburb north of Belgrade. The group’s connections with the army and the government (pre- and post Milosevic) became clear after the assassination of Socialist Serbia’s former president Ivan Stambolić in 2000, and of the acting prime minister, Zoran Đinđić, in 2003.

As became clear, many members of this organization were part of a disparate but well-sponsored section of the army: the special operation unit (Jedinica za specijalne operacije), also know as Red Berets, who merged many paramilitary units that fought in Croatia, Bosnia and Kosovo. Amongst them were the remnants of Arkan’s Tigers, who regrouped after their leader’s murder on 2000. The leader of the Zemun clan, Dušan Spasojević, was killed by Serbian police two weeks after Djindjic’s death.

Obviously, this situation could not last. The fall of the leaderships that lead the war, as Milosevic’s SDS in Serbia and Tudjman’s HDZ hardliners in Croatia, unveiled the importance of mafia in the social and political order of these new states.

A Gentler New Face for Balkan Organized Crime: Lessons Learned from Italy

Only during the middle of the last decade did something begin to change, together with a broader collaboration between local and foreign police officers and more transparency, throwing a light on what had survived hidden under the ashes of the war. (Even in Bulgaria, where no war had occurred, organized crime became less visibly violent, following several high-profile assassinations).

This change was sensible for two reasons: on the one hand, the arrest and prosecution of many war criminals often was supplemented with their indictment for drug trafficking and money laundering, as well as for goods “unofficially” acquired during the war, with the compliance of police and government officials.

On the other hand, the institutional stabilization of Balkan states gave inquirers more freedom in investigating those relations between politics, finance and organized crime that had lurked for years behind the official affairs of state.

Especially in Serbia, some decisions marked a firm line: the killing of Spasojevic, the disbanding of the Red Berets and the arrest of more than 10,000 criminals for a time beheaded local mafia and disclosed its relations with the army and politics. But these police operations by no means eradicated organized crime in Serbia.

In the Western Balkans, organized crime survived by changing its shape and methods- just as the Italian mafia had been forced to do during the 1990s. In Italy, the capos came to understand that public bombings and audacious killings in broad daylight could have a boomerang effect: these acts ended up arousing public anger, and brought increased attention from the police. This unwanted visibility in turn made doing deals more difficult, forced potential allies to become enemies, and increased the chances of being prosecuted before an approving public.

The last major act related to the old kind of mafia behavior in the Western Balkans happened in Croatia in 2008, an act that also represents in many ways a turning point: the killing of the Croatian journalist Ivo Pukanić, murdered by a bomb in the very center of Zagreb.

In less than six months, Serbian police arrested the supposed perpetrators: their leader was Sreten Jočić, a.k.a ‘Joca Amsterdam,’ a businessman and alleged kingpin of drug smuggling. Police accused him of having received 1.5 million euros from unknown parties to kill the journalist. Once arrested, Joca claimed innocence, accusing the “high spheres” of Balkan governments of using him as a scapegoat to cover up for the alleged deeper connections between politics and criminal organizations.

The trial in Belgrade is going on now, and it has already featured some “coupes de theater.” The suspect behind the murder, Serbian (but Geneva-based) businessman Stanko Subotic or ‘Cane’ (one of the richest men in Eastern Europe), gave a controversial interview for the Croatian magazine Jutarnij list, in which he supported  Jočić’s claim, accusing top leaders of Serbia’s Democratic Party, such as Vojislav Kostunica’s entourage. Subotic was arrested in Russia in 2009, but will freely attend his trial and his extradition after a generous bail. However, he was not arrested for the death of Pukanic: he was actually arrested for alleged involvement in international cigarette smuggling said to have occurred back in the 1990s.

Mafia Evolution: the Switch to Low-Profile

Before exploring this subject further, it would be wise to consider the profiles of the alleged protagonists of the “Pukanic affair”: businessmen, politicians and lawyers. The time of Arkan and Legija has passed: if we are looking for the prototype of the current mafia leaders in the Balkans, we should not seek warlords who built their fortune conducting massacres and robbery during the conflict in Croatia, Bosnia and Kosovo.

In those countries where changes at the top made contacts with power more and more difficult, mafia survived submerging in the society, trying to become “invisible,” to gain freedom for its trafficking operations. This is why the Zemun clan survives still today, and is still able to act beyond Serbian territory- as was quite possibly attested in the spectacular 2009 Vastberga helicopter robbery in Sweden – in which armed men used a stolen helicopter and decoy explosives to drop down on top of a cash depot and make off with some $5.3 million.

If Serbian Interior Minister Dačić (who gave testimony for an Associate Press interview in 2009) is to be believed, the clan was behind the Stockholm job. The daring, Hollywood-style operation unfolded with military-style precision, and involved a number of participants involved with everything from acquiring SIM cards, explosives and machine guns to staging a traffic accident and placing false bombs by police helicopters to thwart a response, as a detailed report from Sweden’s ‘The Local’ explains.

According to this article, seven of the 10 men charged (several, Serbian) were found guilty after the heist. It also came out the Serbian intelligence had warned their Swedish counterparts several weeks earlier that plans for a major criminal operation were in the works.

Balkan Leaders under Scrutiny

In December 2010, two important news stories broke that can help explain the current situation in the region. On 14 December, Swiss member of the Council of Europe Dick Marty presented a CoE report claiming to prove that Kosovo’s prime minister, Hashim Thaci, had been the head of a human organs traffic web during the 1998-99 war while a top figure in the KLA. Although Marty lacks investigative powers and the document was – as expected – denounced roundly by the Albanians, it did come after the revelations were initially made in the memoirs of Carla Del Ponte, the former chief prosecutor at the Hague Tribunal. While Thaci remained in his position, the accusations have created new diplomatic tensions and sparked demands (especially, from Belgrade) for a full investigation.

A week later, on 21 December, something much quieter but perhaps more significant happened: Milo Đukanović resigned as prime minister of Montenegro. Many observers attested that Đukanović had been quietly forced to do so, because of international pressure over long-standing cigarette-smuggling allegations. However, a trial against him had concluded in 2009 because he enjoyed diplomatic immunity (the documents surrounding the investigation have been published, in Italian). However, according to the prosecutor, Giuseppe Scelsi, the participation of the then-Montenegrin president in the affair was clear.

In the lengthy Italian investigation, two names repeatedly appeared: that of Subotic, and that of Brano Micunović, the alleged leader of the “Belgrade faction” of this new criminal organization based in Montenegro. By the end of the inquiry, the Italian weekly, Espresso, reported that the Office of the Prosecutor in Naples and Bari had put together 4,000 pages of evidence against them, including recorded conversations and testimonies.

While institutional stabilization, enforcement of police and international cooperation led to new arrests in Serbia and in Croatia, the center of mafia trade in the Balkans moved to more quiet and disposable countries, like Kosovo and Montenegro.

However, the curtain hanging over these two countries is just starting to be lifted. The tiny Dinaric Republic, after being the center of tobacco smuggling during the war years, became well known before its independence in 2006 as a transit hub for cocaine and heroin, a free space for a new kind of organized criminals able to use the state machine and public finance in order to launder money acquired from human and drug trafficking.

Major Operations Begin: The DEA Steps In

This new wave of Balkan mafia was the target of a recent investigation by the American DEA (Drug Enforcement Administration), which began in 2009 in cooperation with local police and intelligence services from several countries (but mainly those of Greece and Serbia). Its codename was, ironically, “Guerrieros balcanicos” (“Balkan Warrior”), a name that stressed the connection between the mafia warlords of the nineties and the mafia managers of the following decade.

In an unprecedented (and once unthinkable) joint operation, the DEA and Serbian intelligence (BIA) confiscated 2.8 tons of cocaine in international waters off of South America, on October 17, 2009. The drugs had a street value of $170 million. According to the Financial Times, the operation also involved the Argentine and Uruguayan police. Nevertheless, “the gangsters allegedly in charge of the shipment came from Serbia and its coastal neighbour, Montenegro.”

Serbia’s cooperation in reining in a vast criminal enterprise based in the Balkans earned praise from its American counterparts. “The Serbian authorities did an outstanding job,” stated Russ Benson, DEA regional director for Europe and West Africa.” He further noted that continuing investigations would focus on “several major Balkan-based organisations with connections to numerous countries… while the Balkan area is used as a significant path for cocaine importation, shipments could be acquired by those groups and go directly into the EU.”

This historic joint investigation highlighted the existence of a vast international drug smuggling ring, with its operations leading from Uruguay to the Balkans. Media reports claimed that it was directed by members of the Zemun clan: as reported by B92 on 21 January 2010, the DEA identified two ‘hot’ names at the top of the pyramid: Darko Šarić, a Montenegrin-born Serbian businessmen alleged to be well connected with the Montenegrin government, and Goran Sokovic, who was arrested by the police on February 9, 2010 in Pljevlja in the north of Montenegro- the hometown of both men.

Immediately after the operation, however, Belgrade was stand-offish: “…suspecting Montenegrin state collusion with the Saric network,” reported the Financial Times. Serbian prosecutors “refused to share their files with the neighbouring state during the investigative phase…. ‘Delivering the evidence at this stage could jeopardise our work,’” stated Miljko Radisavljevic, Serbia’s chief prosecutor for organised crime. Fears that political protection for the suspect from the highest levels in Montenegro could scupper the whole investigation motivated this reticence.

Citing the Serbian interior minister, the Financial Times report stated that “Mr Saric’s group has earned an estimated €1 billion from cocaine trafficking since 2000,” with a similar amount of money having been laundered by all of Serbia’s crime syndicates. The Šarić group was claimed to have owned approximately €100 million in assets, particularly in real estate and cars, seized by the Serbian government after the anti-narcotics operation.

Serbian concerns over political influence in the case appeared to be quite legitimate, as things turned out. Sokovic was released in December 2010, after the Montenegro state prosecutor decided that there was not enough evidence to prosecute them. Đukanović – then still prime minister – commented that since the Montenegrin constitution forbids the extradition of a citizen of the country, he agreed with the decision of the prosecutor. Monitor reported also that Darko Šarić, who had been born in Pljevlja, requested Montenegrin citizenship just a few days before receiving the international arrest warrant. Đukanović then said, in an interview for B92, that there were no reasons to refuse his request (though he had previously sought Serbian citizenship at the time Montenegro became independent in 2006).

Something weird seemed to be happening in this small Balkan country: not only did a chief of state support the freedom of an internationally wanted fugitive, but also suggested a possible safe place for him to hide.

In approaching this matter, the first question that must be posed is an historical one: how did the Balkan mafia, in the period between 2003 and 2011, become one of the most powerful criminal organizations in Europe, growing strong enough to control routes between Europe and South America, and to warrant the intense attention, and ultimately a crackdown, from the world’s most powerful anti-narcotics service, the American DEA?

To answer these questions, we must return to the other side of the Adriatic, and see what happened to Italian organized crime in the meanwhile.

The Fragmentation of Italian Organized Crime and a New Alliance

The profile of Italian organized crime, as has been mentioned, changed during the 1990s, following a trend that has been witnessed during the following decade, in the practice of Balkan mafia groups. Yet first we have to specify what is meant by the general terms “Italian mafia” or “Italian organized crime.”

In Italy, organized crime syndicates are divided into at least four major organizations: the Sicilian Mafia (or “Cosa Nostra,” meaning ‘our thing’), the Neapolitan Camorra, the Calabrian ‘Ndrangheta and the Apulian Sacra Corona Unita.

Descriptions of the divisions and the relations between these four organizations can be found in periodical reports issued by the Italian DIA (Department of Anti-mafia Investigations). Twenty years ago, the Sicilian mafia found itself being challenged for control of drug routes to the United States by newcomers like the Chinese, Vietnamese and Puerto Rican smugglers. The mafia thus made an operative deal with the Camorra, a group from Naples, by “subcontracting” to them the distribution of heroin and cocaine in Italy. Both groups maintained their independence and their features, but shared their market.

Trying to defend their interests and to find new routes for drug supply, the Camorra became one of the principal interlocutors of the Serbo-Montenegrin mafia during the nineties. But they were not the only ones. Sacra Corona Unita emerged in the 1980s, when many Mafia and Camorra bosses were jailed in Apulian prisons. Because of this, many Apulian clan leaders in the early 1990s acquired the permission and the necessary know-how to conduct smuggling of cigarettes across the Adriatic.

This cooperation went forward, enforced by the contemporaneous fragmentation or “flaking” of the Italian Mafia, as a consequence of the police’s beheading of Mafia and Camorra leaders. Arrests, stricter laws and better international collaboration complicated the job for Italian organized crime. It needed allies, and found them in the criminal organizations and in some cases the governments of young Balkan states: tobacco smuggling showed the potential of the eastern shores of the Adriatic to become, for both the Camorra and Sacra Corona Unita, an area of growth and expansion.

This agreement allowed criminal organizations to participate side-by-side in trafficking and other activities in various countries and continents, acting just like an international corporation. This was a structure originally used by the classic predecessor, the Sicilian-American Mafia: a well-organized, effective and bureaucratic organization capable of handle drug supplies from South America, but also highly complex money laundering schemes in Switzerland and northern Italy.

This new kind of transnational mafia reunited Italian groups, and brought them together into (what is called in the DEA report) a “Balkan Holy Alliance.” It put the routes of cocaine distribution in Europe and the contacts with Colombian narcotics producers into the hand of Serbian and Montenegrin clans.

As reported in a recent briefing by the Italian strategic publication “Osservatorio Italiano,” the contacts between Serbia and South America are currently being guaranteed by the Calabrian ‘Ndrangheta: the same DEA report states that this trafficking ring enjoys a turnover of 25-30 million euros per year, and could even become a serious threat to the stability of the European Union.

The Italian magazine Narcomafie has already shown, in an article dated 18 November 2010, how deep the tentacles of this new organization extend. Bigger Italian towns like Milan provide the proof: Michele Rinella, an anti-drug police official who followed the case, said that Serbian and Montenegrin mafia men “appeared almost suddenly on the scene… and act without any trouble because they guarantee to the entire [group] to get their money without conflicts between clans.”

Here, then, is the golden rule of Balkan mafia: to give back to every link in the chain the portion that each deserves.

Following the Money

The late Italian judge Giovanni Falcone was the first, together with his colleague Paolo Borsellino, to identify the Mafia as a widespread structure, an entity well-connected in politics, finance and economy. Unlike the Mafia of old, the new Mafia disappears, hides in the neighboring society, and exploits laws and rules to cover its tracks, counting on lawyers and complaisant bank directors to serve its purposes. To untie its knots, inquirers have one principal and time-tested method: follow the money.

Indeed, this slogan applies well for any investigations concerning Mafia relations across the Adriatic. In 2009 and 2010, two operations by Italian police hit this trafficking network between Italy and Montenegro; the first one, labeled “Domino,” led to the arrest of 83 people, including the Sacra Corona Unita boss Savino Parisi.

Milan was the center of a joint-venture between Parisi’s clan and the Serbo-Montenegrin ones, as reported in Narcomafie on 16 November 2010: the “Balkan Holy Alliance” administrates the routes along with Colombian narco-producers and provides Italian clans with drugs to be distributed on the territory.

Last year, the conjunct operation “Scacco Matto” (“checkmate”) carried out between Italian, Slovenian, Serbian, and Montenegrin police led to the arrest of Duško Micunović, a Montenegrin citizen from Niksic, whose brother Brano is considered by many to be the leading figure of the Montenegrin mafia. Duško Micunović was alleged to have been at the top of an organization operating from the two opposite shores of the Adriatic – Bari and Bar – with many branches in Italy, Switzerland and Sweden. He was arrested in February 2010 and extradited to Italy on 21 October 2010. Over the same days, Darko Šarić ‘s brother, Duško, was arrested in Montenegro on charges of being part of this trafficking operation.

The Montenegrin daily Dan, citing police sources, reported that this arrest was related to the recent visit of Italian Anti-Mafia chief prosecutor Pietro Grasso to the country, a visit apparently related to Operation Checkmate. But the knot is far from being untangled, if we can believe the article from Monitor which describes the country as a “Mafia hostage,” while denouncing a persisting lack of assistance from the national authorities.

The goal of gaining membership in the EU pushed Serbia, Bosnia and Croatia ahead in fighting criminal organizations, as underlined by the successful cooperation with the DEA during Operation Balkan Warrior. But in Montenegro this operation is just in its beginning stages: indeed, right up until a few days before the international arrest warrant against Darko Šarić was issued, the man was completely unknown, nothing more than a businessman with some companies spread between Serbia and Montenegro, and sound relations with politics and finance. Only after the confiscation of his assets, when Operation Balkan Warrior landed, effectively, in the Balkans were inquirers able to get more information about the man and his endless fortune.

On 30 September 2010, B92 reported on an Austrian police investigation of a Montenegrin bank, the Hypo Group Alpe Adria (HGAA), which has been accused of laundering around 100 million euros belonging to Šarić, during the three-year period between 2007 and 2009.

However, the HGAA has also come up somewhere else: it was one of the banks recently nationalized in Montenegro, to avoid bankruptcy. Together with the Prva Banka, a credit institution which has played a major role in the Montenegro economy since the 1990s and is now involved in many project in cooperation with Italian firms, the HGAA is now under the control of Aco Đukanović- brother of the former Montenegrin president.

Following the money, the road thus ends on the doorsteps of very significant people in Montenegro. And this brings up again the question of Đukanović’s resignation- was it perhaps the cost of exchange for the European Union to open its gates to Montenegro? And was it perhaps not by chance that the country received EU candidate status just a few days before his resignation?

But what should we expect about the trial which has been suspended thanks to diplomatic immunity? Maybe it will start again- or maybe, just maybe, was its conclusion part of the deal that lead Đukanović to resign? Only time will tell.

Spanish Operation Uncovers the Brazilian Aspect of Balkan Narcotics Smuggling

So far do the Balkan criminal groups’ tentacles extend that even the massive, multinational police operations – Balkan Warrior in 2009 and Operation Checkmate the following year – could not sever them for long. On 6 May 2011, the Brazilian police announced that they had arrested 17 people over the previous days- most of them Serbs, and internationally wanted already. The men were allegedly managing a drug smuggling network from Brazil to Europe, with an estimated turnover of around 850,000 euros.

Their alleged leader, who was one of those arrested, was Goran Nesic, alias ‘Ciga;’ the Bulgarian online media Focus reported on this case, adding that Nesic was believed to be the boss of cocaine smuggling towards the UK market. On the very same day, Serbian interior Minister Dacic said that the police were not sure yet whether Nesic belonged to Šarić’s group, reported ADN Kronos. But at very least, the location of activity, illicit trade in question and provenance of the ringleaders indicates that the South American connection with the Serbian/Montenegrin groups is alive and well.
Human Trafficking: the Next Point of Contact?

In Montenegro, the change at the top – Đukanović has been substituted as Prime Minister by his former finance minister, Igor Luksić – may, or may not, lead to stronger international collaboration, and help to control the routes of human and drug traffic across the Adriatic Sea.

The urgency of this issue has been exacerbated by recent events that just a year ago seemed improbable, or even impossible to imagine: revolutions in Tunisia and Egypt, a civil war in Libya, violent uprisings in Syria and Yemen and unrest elsewhere throughout the Middle East and Gulf. These events taken together are deeply influencing the stability of the larger Mediterranean-Balkan region, and Europe still does not have answers for it- perhaps, because the scope and nature of the question it must resolve is still not completely known.

For now, it is difficult to forecast what influence the new multinational policing cooperation, or the leadership re-evaluations in the Balkans, may have on the Italo-Balkan crime route in terms of human trafficking. But there are indications that this observers should be aware of its potential.

Recent investigations in Italy (reported in many Italian publications) showed the involvement of Sicilian mafia clans with boat captains that ferry migrants from conflict zones in North Africa to Europe, usually in exchange for large sums of money.

Taking control of “human routes” towards Italy and Schengen countries could give the mafia alliance between Italy and the Balkans great power and, ironically, even a role in conditioning public policies in the EU. While European countries promote laws against immigration (and recently President Barroso mentioned the possibility of “blocking” Schengen access in some cases), immigration has become a business in itself, and maybe a way to divert attention from other – and more profitable – forms of trafficking, such as money laundering and drugs.

From the Italian perspective, this can clearly be acknowledged by the uproar that the arrival of barely 5,000 Tunisians on Lampedusa, a little island 30 miles away from the Tunisian coast, produced in the peninsula one month ago: it was so loud that it forced the Italian government to release special “permits of stay” for these immigrants.

Of course, many more have come and will continue to come, both those fleeing from the war in Libya and, mixed up with them, typical economic migrants: during one recent weekend, more than 1,000 migrants arrived on Lampedusa in very difficult conditions. The strain of conflict elsewhere in Africa, the Middle East and Arabian peninsula is sure to exacerbate existing migration unfluxes from Turkey into Greece and the Balkans. With an arc of instability spreading from Morocco straight across to Yemen, and Europe considered safe ground, the southeast of the continent – and those who do ‘business’ there – are clearly poised to profit.

How could this affect the Balkans? For now, this is less clear. In the 1990s, a lucrative trade emerged in smuggling migrant workers from Albania to Italy via speedboats. However, both governments cracked down on the practice and it is no longer a major concern. In the bigger geographical picture, relatively little information exists regarding any current cooperation between Italian and Balkan mafias in human trafficking across the wider Mediterranean.

However, since the Italian mafia is controlling these routes from North Africa, they will increase their profits from this trade due to the ongoing unrest in that region, and probably liaise with whatever nascent trafficking mobs develop on the African side. The latter will be necessity also have a strong armed presence/protection and as such will most likely be close with whichever military group comes to have a monopoly on power locally. And, there is always a possibility that the Italian groups can expand their cooperation with Balkan syndicates from drugs to human trafficking in these cases.

In fact, the whole regional dynamic of trafficking pattern may be undergoing a shift as well, now that Bulgaria and Romania are set to join the Schengen zone, and all Balkan countries except Kosovo enjoy visa-free travel within the EU. Recently, police in Macedonia announced the discovery of several illegal immigrants from North Africa, believed to have come via Greece, which is overwhelmed with migrants trafficked originally from Turkey. Macedonian politicians complain in public – and influential foreign diplomats back them up in private – that Greece is regularly engaged in “immigrant-dumping” by sending unwanted migrants northwards (Turkey, the ultimate source of the problem, will only repatriate those illegals who come from countries having a land border with it). Further, as Greece faces a painful and prolonged economic contraction, there are fewer and fewer jobs for immigrants who had previously sought to base themselves there. Simply put, more and more desperate people are on the move.

Thus it is possible to expect a shift from the traditional trafficking operations that transfer immigrants from Asia and Africa towards Northern and Western Europe, towards an inter-European trafficking movement of illegal immigrants that have been stuck into countries with low or even negative economic growth. Paradoxically too, the closer that Balkan countries come to joining the EU and stabilizing themselves, the more attractive they will be to immigrants as well. Should one or both such scenarios develop, it would present a great opportunity for Balkan mafia groups of various ethnicities, who have good contacts with their own diasporas and immigrant groups in every European country.

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Serbia has come a long way since the Yugoslav conflicts of the 1990s, when it was sanctioned by the West and ultimately bombed by NATO, and was considered one of the ‘improving’ Western Balkan countries in the annual European Commission report of October 2011. Having traditionally been the economic motor of the Balkans, and a major center of regional political life for much of the 20th century, it was clear that despite the essentially pariah status the country endured during the rule of Slobodan Milošević, Serbia’s fortunes would eventually improve.

This is the case today, with Serbia attracting more foreign investment opportunities and in general a more positive image abroad. Still, despite the dissolution of the last vestige of Yugoslavia in 2006, successive Belgrade governments have sought to maximize the country’s leverage on the international stage by wooing – in much the same way that Tito did – suitors from both East and West.

This ability has largely been sustained by the continued impasse over Kosovo independence, something that remains unacceptable to Serbia. The influence of Belgrade in Bosnia’s Republika Srpska is another factor that has kept international diplomats from far and wide engaged with Serbia’s government.

With a rich and lengthy history, and numerous contributions to world culture, Serbia remains one of the more confident Balkan nations. Despite endemic corruption and some organized crime, infrastructure deficiencies and the decline of rural life, Serbia sees a strong future for itself in its industrial capacities, its agriculture, and in its potential to be relevant in terms of regional energy transit and regional diplomacy. Plus, despite the degradations of the transition years, and numerous lessons learned the hard way, Serbia has managed to strengthen its institutions, and has enhanced its capacities in key areas such as the security sector.

Outstanding Issues

The issue of Kosovo independence, and the fate of Serbs living in Kosovo; poor relations with Sarajevo over the aspirations of Bosnia’s Republika Srpska; official corruption, and some organized crime concerns.

Forward Planning: Points of Interest

• Government’s actions and statements in all regards to the Kosovo issue, especially the showdown over border blockades in the North
• Government’s role in supporting ethnic Serb interests in Bosnia-Herzegovina, in light of the latter’s political uncertainties
• The ever-shifting balance of relations between Serbia and its Western and Eastern partners, including relevant institutions such as NATO and the EU, or issues of cooperation with countries like Russia and Iran
• Security-related issues, especially Islamism in Sandžak and ethnic Albanian demands in southern Serbia
• Foreign investment trends in the country, and problems of brain-drain among young professionals going abroad
• Relations with the Diaspora on the political and economic levels

Boris Tadić, President

Mirko Cvetković, Prime Minister & Finance Minister

Ivica Dačić, Interior Minister

Dragan Šutanovac, Defense Minister

Vuk Jeremić, Foreign Affairs Minister

Brands & Distinctions

Blackberries, plums and related drinks (Slivovica); ‘Gypsy Brass’ bands, Basketball and water polo

Major Industries

Hydroelectric energy, transport equipment, machinery and chemicals; agriculture and food processing; pharmaceuticals; electrical and electronic goods; textiles

Key Trade Partners

Italy, Germany, Russia, France, Greece, Hungary, Macedonia, Bulgaria, Romania

Main Airports

Belgrade, Niš