BRIEF POLICY THE PERIPHERY OF THE PERIPHERY: THE WESTERN BALKANS AND THE EURO CRISIS Dimitar Bechev Despite the euro crisis, the European Union continues to SUMMARY The euro crisis has not killed enlargement but it expand into the Western Balkans: in July 2013, Croatia will is relegating the region to the outermost circle become its 28th member. But beneath the surface, the EU’s in a multi-speed Europe – the periphery of the relationship with the countries on its doorstep is changing periphery. With Balkan economies beset by low or as a result of the crisis and the way it is transforming the negative growth rates and rising unemployment, EU. Integration is a double-edged sword for the Western it has exposed the limits of the EU’s growth model Balkans: in good times, the European core exported its and undermined the narrative of convergence between the EU and the Western Balkans. Greece, prosperity towards its south-eastern periphery; but now, once one of the region’s models, is now a warning at a time of crisis, it is exporting instability. European about the perils of Europeanisation without policymakers and analysts still casually speak of the EU as deeper transformation. EU membership is still the cure for Balkan pathologies – as if the crisis has never popular in the Western Balkans, but more often happened. But the truth is that a disintegrating EU could than not elites talk Europe’s talk but do not walk also be a curse for them. the walk. The euro crisis further reinforces the temptation The EU is now faced with what Timothy Garton Ash calls that already existed in the EU to pursue a “wait- a “damned if you do, damned if you don’t” situation: if and-see” approach to the Western Balkans. But the eurozone sorts out its problems, the price might well the apparent stability of the status quo could be introversion and no appetite for enlargement; if it prove deceptive. While the violent conflicts of doesn’t, the Balkans will be left out in the cold with little the 1990s are unlikely to re-emerge, stagnation external support for their modernisation and democratic within the region erodes the EU’s influence and consolidation.1 Either way, the crisis is relegating the region encourages competitors. To make enlargement work and reclaim its soft power, the EU must to the outermost circle in a multi-speed Europe – the shift its focus from a narrative based on security periphery of the periphery. A Greek exit from the eurozone to one based on the economy. The EU needs to would send shockwaves through the Western Balkans, with deploy strategically its scarce resources, together whom it has developed extensive trade, investment and with other international actors such as the IMF, human links over the past two decades – exactly as Brussels to avert an economic meltdown and assist growth. hoped it would. 1 Remark made at the 10th anniversary conference of South East European Studies at Oxford (SEESOX), St Antony’s College, Oxford, 28 May 2012. The euro crisis further reinforces the temptation that already might submit a membership application this year. After existed to pursue a “wait-and-see” approach to the Western 16 months of agony following the October 2010 elections, Balkans – particularly as even Romania and Bulgaria struggle a state-level government was formed in Sarajevo and two to convince “old Europeans” that they are proper members critical laws, on state aid and on censuses, were passed last of the club.2 But the stability of the status quo could prove February. The principal hurdle to be cleared, according to deceptive. While Balkan conflicts are unlikely to re-emerge a roadmap extended by the EU in June, is implementing and turn violent, stagnation within the region erodes the the 2009 Sejdić–Finci judgment by the Strasbourg- EU’s influence and encourages competitors. Balancing and based European Court of Human Rights and allowing playing off rival powers in order to reap short-term benefits those not belonging to the three main communities – the at the expense of long-term public interest may well become Bosniaks, Serbs and Croats – to serve in high public offices. the dominant foreign policy strategy for local elites. The Constitutional changes regarding the rules on electing the EU should therefore re-assert the role of integration as an country’s tripartite presidency are proving hard to negotiate engine for economic and social modernisation. The EU but moving closer to the EU is a valuable prize. needs to deploy its existent resources, as scarce as they may be, to bolster growth, competitiveness and employment Kosovo also scored a success when it launched a visa in order to beef up its power of attraction, encourage pro- liberalisation dialogue with the European Commission on reform actors and avoid squandering the political capital 19 January, having fulfilled the criteria set forth by Brussels. already invested in the Balkans. Moreover, on 14 June, the Commission delivered a roadmap specifying reforms on the path to lifting the visas. The so- To make enlargement work and reclaim its soft power, the called footnote or asterisk agreement between Prishtina EU must shift its focus from a narrative based on security to and Belgrade in February was yet another breakthrough. one based on the economy. Political stabilisation through Not only did it pave Serbia’s way to candidacy and open association was a worthwhile strategy in the past but the gates to Balkan regional bodies to Kosovo, but also it these days it is simply not sufficient. Thanks to its already helped the Commission start work on a feasibility study in advanced integration into the EU, the region’s problems March, which may lead to an Stabilisation and Association are largely identical to those faced by many member states, Agreement (SAA) with Kosovo. Such steps will strengthen not least those in Central and Eastern Europe. Perched on the EU’s hand while inaugurating a more mature and even THE PERIPHERY OF THE THEPERIPHERY: WESTERN BALKANS AND THE EURO CRISIS the EU’s periphery, the Western Balkans are exceptionally relationship with both Kosovo and Bosnia, well beyond vulnerable to the economic turbulence originating from crisis management under the Common Security and within its confines. The main challenge is how to safeguard Defence Policy (CSDP). stability in the face of the outside storm while boosting growth. These are not trivial bureaucratic moves but genuine achievements backed by political will and entrepreneurship from enlargement-friendly EU member states and, Enlargement as usual? in particular, the European Commission. In March, enlargement commissioner Stefan Füle launched a high- Contrary to popular rumour, the euro crisis has not killed level accession dialogue (HLAD) to help Macedonia meet enlargement. Following Croatian accession, Montenegro the benchmarks in key areas such as judicial and public also opened accession talks on 29 June and hopes to join administration reform – a way to mitigate the Greek veto within a decade. Even Serbia was upgraded to candidate preventing Macedonia from starting accession negotiations status back in March, in recognition of bold steps taken despite obtaining a positive avis from the Commission. Two towards normalising ties with Prishtina. Even though they days after François Hollande was inaugurated as French brought to the presidency Tomislav Nikolić, a right-wing president in May, the Commission initiated a “Positive populist with an impeccable paramilitary pedigree, and Agenda” as a vehicle to reignite the stalled accession talks installed Slobodan Milošević’s ex-spokesman Ivica Dačić with Turkey. In June, the Council gave the Commission a as prime minister, the elections demonstrated that the EU green light to start working on a visa liberalisation roadmap, is not a divisive issue as in the past. Friends of Europe in a longstanding Turkish demand. In exchange, Ankara the current member states would be happy if their own initialled a readmission agreement. Such moves, though www.ecfr.eu Eurosceptic parties performed as poorly at the polls as hardly a panacea, do show that Brussels is doing its best to Vojislav Koštunica, the only candidate arguing against bypass political roadblocks. Serbia’s accession. Counter-intuitively, the crisis has also boosted certain facets Even laggards such as Bosnia and Kosovo, still under of EU policy. Germany’s economic weight has propelled it international tutelage, aren’t doing that badly. Having to the centre of decision-making and allowed it to act more August 2012 recently marked the twentieth anniversary of the war, Bosnia assertively on the external front too. Thanks to Chancellor Angela Merkel’s decisive intervention, Belgrade started approaching normalisation talks with Prishtina seriously, 2 See Heather Grabbe, Gerald Knaus and Daniel Korski, “Beyond Wait-and-See: The rather than as a box-ticking exercise, and delivered concrete ECFR/60 Way Forward for EU Balkan Policy”, European Council on Foreign Relations, May 2010, available at http://ecfr.eu/page/-/ECFR21_BALKAN_BRIEF.pdf (hereafter, results. Most of the five member states that do not recognise 2 Grabbe, Knaus and Korski, “Beyond Wait-and-See”). Figure 1 Kosovo have, in turn, been enormously debilitated by the Balkan support for and opposition crisis and therefore are much less willing to antagonise to EU membership Berlin or the pro-independence majority in the European Council on a second-order issue such as Kosovo. As ECFR’s Support for EU membership (percentage of population) Foreign Policy Scorecard 2012 argued, the end result has been a unified position by the EU leading to a much more effective deployment of the conditionality tool.3 Over the 2006 2008 2009 2010 2011 2012 past year, the EU has started to talk and act tougher, and Albania 84 83 88 81 81 a chances are that it will continue to do so with Nikolić and Dačić, who was minister of interior in the previous 97 b government.