PPS 201108 MameliSimona

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08Portal on Central Eastern and Balkan EuropeUniversity of Bologna - 1, San Giovanni Bosco - Faenza - Italy

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Regional Cooperation in Western Balkansin Times of Political

and Economical Uncertainty

Junior ResearcherInstitute for Central and Eastern Europe and the Balkans

Simona Mameli


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PECOB's Papers Series | February 2011 | #08 | www.pecob.eu

RegionalCooperationinWestern

BalkansinTimesofPoliticaland

EconomicalUncertainty

SimonaMameli

InstituteforCentralandEasternEuropeandtheBalkans

Tableofcontents

Abstract............................................................................................................. 4

Keywords .......................................................................................................... 4

1 Generalbackground:theWesternBalkansfacingtheglobalcrisis ......... 42 BackgroundofregionalcooperationintheWesternBalkans...................7

3 RegionalCooperationInitiativesintheWesternBalkans:ageneralpicture.......................................................................................................... 9

4 Towardsregionalownership?TheestablishmentoftheRCC ................. 14

5 Oneyearafter:thepoliticallandscapeafterKosovoindependence,theglobalcrisisandtheuncertaincertaintyoftheregionalownershipwithintheRCC...........................................................16

6 TheEUinterventionforsupportingregionalcooperationintimesofpoliticalandeconomicaluncertainty.................................................... 176.1 TheappealtoeffectivenessforRCC..........................................................186.2 Theappealtoinclusiveness:theKosovoissue..........................................19

7 Highstakesinplay:theneedtorescueandenhanceregionalcooperationfromtheEUperspective ......................................................207.1 The relevance of Kosovo inclusion within the regional cooperation

framework:politicalarguments.................................................................21

7.2

The

relevance

of

Kosovo

inclusion

within

the

regional

cooperation

framework:economicalarguments.......................................................... 24

8 Strengtheningregionalcooperationintimesofeconomiccrisis:

3


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4 Simona Mameli

www.pecob.eu

theroleofForeignDirectInvestments .................................................... 27

9 Finalconsiderations...................................................................................29

Bibliography......................................................................................................31

Institutionaldocuments..........................................................................................31BooksandArticles.................................................................................................. 33Websites .................................................................................................................34

Abstract

A firstdraftof thispaperwasoriginallypresentedat the International

Conference The Global Crisis and Regional Governance in the Balkans. IsthereaThreattoStability?,organisedbytheUniversityofBologna/CentreforEasternEuropeandtheBalkansandheld inFaenza, Italy,5th6thFebruary2010.

TryingtogiveananswertothequestionsatthebasisofthatconferenceIstheglobalcrisisimpactingongovernanceintheBalkans?Isthereathreattostability intheregion?thepaperfocusesonthecurrent impasseofregionalcooperationintheWesternBalkans,duetopoliticalandeconomicaluncertainty.Specialattentionhasbeendevotedonproblemsaffectingtheyoungestactorofregionalcooperation inSouthEastEurope,theRegionalCooperationCouncil,theroleoftheEuropeanUnionasanexternalactorsupportingregionalcooperation,andthedisputedstatusofKosovowithitsnegativepoliticalandeconomicalrepercussions.

Keywords

regionalcooperation,WesternBalkans,SouthEastEurope,Kosovo

1 Generalbackground:theWesternBalkansfacingtheglobalcrisis

The international economic crisis reached the Western Balkans in the

secondhalfof2008/firstquarterof2009,affectingtheregionwithdifferentpaths,dependingonthedegreeofintegrationofnationaleconomiestothe


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Regional Cooperation in Western Balkans in Times of 5

SouthEastEurope GDPGrowth(average)*

Country 2006 2007 2008 2009 2010 2011

Albania 5.5 6.0 7.7 4.3 2.0 3.9

BosniaHerzegovina 6.7 6.8 6.0 4.4 0.6 1.9

Croatia**

4.8 5.6 2.4 5.9 0.6 2.0Bulgaria 6.3 6.2 6.2 4.8 0.0 2.7

FYRMacedonia 3.7 5.1 4.8 1.2 2.0 3.8

Montenegro 8.6 10.3 7.5 4.3 0.4 2.0

Romania 7.9 6.0 7.3 7.0 1.3 2.3

Serbia*** 5.5 7.5 5.5 3.1 2.4 3.2

Table1: SouthEastEurope GDPGrowth

Source:EuropeanBankforReconstructionandDevelopment:EBRDTransitionReport2008;RegionalEconomicProspectsinEBRDCountriesofOperation:QuarterlyUpdateOfficeoftheChiefEconomist,January2010;.Theabovechartisthe

authorsreelaborationofEBRDdata.*Weightedaverages.TheweightsusedforthegrowthratesareEBRDestimatesofnominaldollarGDPlaggedbyoneyear.Yearoveryearpercentchange,updatedasofEBRDJanuary2010forecasts.**EBRDdoesnotrecognizeKosovoasanindependentState.

globalmarket.Countries with higher degrees of financial and economic integration

startedtosufferfromtheglobalriskaversionandliquidityshortageaswell

as from theslowdownofeconomicactivity in theEU. Asecondgroupofcountries, less integrated into the international chain of contagion, remainedrelativelyshieldedatthebeginningof20091.

Duringthelastquarterof2009theinternationalfinancialandeconomiccrisis was affecting the Western Balkans mainly via shrinking external demand, loweringForeignDirect Investmentandcapital inflowsanddeceleratingcreditgrowth2.Notwithstanding the prospects for a mild recovery in 2010 and 2011, longlasting effects of the crisis will be nevertheless evident in the nearest fu

ture,withaccesstoforeigncapitalandforeigndirect investments likelytoremainconstrainedforsometimeintheWesternBalkans,andcompetitionforthosefundsprobablyevenharderthaninthepastyearsofampleliquidity.

The current crisis is expected to severely affect the region also in themediumterm,sinceitchallengestherecentgrowthmodelofWesternBal

1 EuropeanCommission,DirectorateGeneralforEconomicandFinancialAffairs,TheWest

ernBalkans

in

Transition,EuropeanEconomy,OccasionalPapers46/May2009,p.21.

2 EuropeanCommission,DirectorateGeneralforEconomicandFinancialAffairs,Candidate

andPreAccessionCountriesEconomicQuarterly,October2009,p.3.

(CC) You are free to share, copy, distribute, and transmit this work


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6 Simona Mameli

kan economies, based on negative domestic savings and investment balances, cheap international capital, low investment in equipment and machinery, low exports, and in the poorest economies the expatriation of a

sizeable

part

of

the

workforce.

Financing

domestic

growth

needs

will

be

come increasinglydifficult3.Even ifFDImayresumeoncethe internationalcrisisisovercome,inthemeanwhileremittancesflowsmayslowdownandforeigncapital is likelytoremain lessreadilyavailable,withhigherriskpremiumsandrates.Thissituationwillrequireanadjustmentinexternalimbalances, supported by a more prudent policy mix. An acceleration of structuralreformson labourandproductmarkets,and improvingthequalityofpublicspendingwould increasethecapacityoftheWesternBalkaneconomiestocompetewithotheremergingmarkets inattractingforeign invest

mentintherecoveryphase,thatremainsakeyforrescuinggrowth.Insuchascenery,giventhecoincidenceoftheeconomicalcrisiswithpo

liticaldifficultiesfacedbyregionalcooperationinrelationwithKosovo'sindependenceanditsnonrecognitionbysomeStatesintheregion,theEuropeanCommissionurgedtheneedforWesternBalkanstoremainengagedinregional cooperation, as a tool for maintaining the march of approach oftheregiontotheEU.

InthewordofCommissionerforEnlargement,OlliRehn:

()morethanever,theEUperspectiveandimprovedregionalcooperationareabsolutelyessentialtohelppullthecountriesoftheregionoutofanegativeeconomicspiral4.

AsacornerstoneoftheEUagenda,regionalcooperationis()ofparamount importance to make the countries more resilient to the crisis. Ofcourse, the economic weight of the Western Balkans as a region is limited.Yet,regionalcooperationshouldnotonlybeseenintermsofexportmarkets,butalsoasachancetocombine inputsandknowhowfromtheregioninordertosucceedintheglobalmarket5.

The argument of regional cooperation as the magic wand to solve

stabilityproblemsintheWesternBalkansisnotnew.Thisisnottosaythatregional cooperation doesn't have intrinsic advantages, since it is out ofdoubtthatpublicgoodsnotattainablebysinglestatesmightbeinsteadgotthrough coordination, cooperation, progressive homogeneity of rules, lib

3 EuropeanCommission,DirectorateGeneralforEconomicandFinancialAffairs,TheWest

ernBalkansinTransition,op.cit.,p.21.4 EuropeanCommissionerOlliRehns forewordattheConference"TheWesternBalkans:

Overcomingthe

economic

crisis

from

regional

cooperation

to

EU

membership,Brussels,9De

cember2009.5 Ibidem.

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eralizationofmarkets,andsoon.Intimesofeconomicalcrisis,regionalcooperation may represent a crucial instrument in order to avoid unilateralpoliciesandmanoeuvresthatcouldresult inageneraldeteriorationofthe

economical

environment.

Regional

cooperation

forums

might

serve

also

to

coordinatemultilateralrequestsof financialassistancetobeaddressedtorelevant internationalstakeholders, in fields of regionalcommon interest,liketransport,energy,environment.Thescopeofcoordinationistoamelioratetheinflowofexternalcapitalsintheregionevenintimesofeconomicglobalturmoil,thereforespeedingrecoveryandrescuingpathsofgrowth.

However, towork in thisdirection, regionalcooperationneeds to restonsolidbasesofgenuinepoliticalwilling,andtobedulycoordinated.And,at the end of 2009, regional cooperation in the region seemed not well

equippedtoresist,withoutexternalhelp,topoliticalandeconomicalchallenges.

2 BackgroundofregionalcooperationintheWesternBalkans

OneofthemainfeaturesofregionalcooperationintheWesternBalkansis its externallydriven nature. Making it a prerequisite for integration,theEUmaderegionalcooperationcompulsoryforthecountriesoftheregion.Thisapproach,launchedbytheEUin1996,atatimewhenneitherthetermWesternBalkansexisted6,was intendedtoconnectBalkansStateseachother inastrongframeworkofmutualrelations, inordertostabilizepeaceintheregionandwasdefinitivelyconsolidatedwiththelaunchingoftheStabilisationandAssociationProcess,in1999,whichremarkedtheneedforthecountriestobeengagedinregionalcooperation.Puttingitasapre

requisite for EU integration, regional cooperation was expected to bringgreaterpolitical and economic stability to the Western Balkans, thereforepromotingafasterEUintegrationfortheregionandatthesametimepreventingtheenlargementtoimportforeignpolicyproblemsintotheEU7.

Even if externally driven, the development of regional cooperationserved the scope to reconstruct links and relations among neighbouring

6 See Milica Delevi, Regional Cooperation in theWestern Balkans, Institute for Security

Studies,ChaillotPapern.104,July2007,Paris,2007,pp.1116.7 MilicaDelevi,RegionalCooperationintheWesternBalkans,InstituteforSecurityStudies,

op.cit.,pp.2325.



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8 Simona Mameli

countries,andinsomesensesithelpedtorescuecommonfactorssuchashistorical,economical,culturalthatadecadeofwarshadtriedtodelete8.

Thestrong incentiveofEUmembershipworkedasapushingfactorfor

generating

a

wide

net

of

regional

relations

among

the

Western

Balkans,

but

at the same timesome inconsistencyemergedas faras theEUapproachtowardstheregionand itsperspectiveofEUmembershipwasconcerned.There is an implicit contradiction, indeed, between the regional approachonwhichtheStabilisationandAssociationProcesshasbeenbased,andthatmakescountriesintheregioncompelledtomutuallycooperateiftheywanttoproceedtowardstheEUmembership,andtheEUenlargement,thatisabilateralexercise,managedexclusivelybytheEUandeachsinglecountry.FromthepointofviewoftheWesternBalkanscountries,thisinconsistency

makes theirbilateral relationswith theEU farmore important than thosewithregionalcounterparts,andevenmoreimportantthentherelationsoftheregionasawholewiththeEU9.

This inconsistency between EU regional and bilateral approaches towardsWesternBalkansgeneratedsomeuncertaintyamongthecountriesintheregion,atleastatthebeginning,whethertheEUintegrationwasarealoption or just a far mirage to compel them to cooperate among themselves10, sinceEU integration wasessentially a multispeed process in theregion11.

8 Inthissense,thesupportfor regionalcooperationwas inspiredbythepositiveexperi

ence of Western Europe. Regional cooperation nets and their developments in WesternEurope,up till theestablishment of the European Union, have contributed to transform thesovereigntyofStates,reducingpotentialsofconflictsintheregion(See:WilliamWallace,TheSharingofSovereignty:theEuropeanParadox,inPoliticalStudies,XLVII,1999,pp.503521).Atthesametime,theneedfor interdependence inthecontemporaryworldwithaspecialreferencetotheeconomicrelationsrepresents,perse,astrong incentiveforcountriestodevelopregionalcooperation(See:EdwardD.Mansfield,HelenV.Milner,Thenewwaveofregionalism, inInternationalOrganisation,Vol.53,No.3,Summer1999,pp.589627;EdwardD.

Mansfield,PreferentialPeace:WhyPreferentialTradingArrangementsInhibitInterstateConflict, in Mansfield & Pollins (eds), Economic interdependence and international conflict:Newperspectivesonanenduringdebate,MichiganStudiesinInternationalPoliticalEconomy,2003,pp.22236).Inthissense,evenifexternallydriven,regionalcooperationcouldrescuesomesortofnaturaltrackof interstaterelationsandhencedevelopfurther,asforeseenbysupportersoftheNeofunctionalisttheories,attheverybasisalsooftheEuropean integrationproject.

9 VladimirGligorov,SoutheastEurope:RegionalCooperationwithMultipleEquilibria,in

IntegratingtheBalkansintheEuropeanUnion:FunctionalBordersandSustainableSecurity(IBEUResearchProject),WorkingPapern.4.1.,2004,p.2.

10

MilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.11 Vladimir Gligorov, Southeast Europe: Regional Cooperation with Multiple Equilibria,

op.cit.,p.6.

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Asamatteroffact,thecuriouspicturegenerated intheregionsawallcountries intheregionproceedingtowardsacommongoal,butwiththeirprogresses subjected to a regatta principle each country to join EU

when

it

is

ready

and

not

a

caravan

principle

waiting

while

the

others

catchup12.Theregattaprincipleimpliedalsoariskofgeneratingcompetition among countries in the region, especially during the last few years,dominatedbyEUinternalcrisis,withthefailureoftheEUConstitution,thedifficulties in adopting a new Treaty, before Lisbon, and a generalisedenlargementfatigue,whichhasalsocoincidedwiththeglobaleconomiccrisis.

Somecluesmaysuggestthatasortofcompetitionwaseffectivelydevelopingamongthecountriesintheregionwithintheirmultispeedprocess

towardstheEU integration.Exchangingexperiences, indeed, isdeemedtobemutuallybeneficialwhenallpartsaretogainfromcooperation inafutureperspectiveofdevelopment.However,whencooperation impliesthetransferofknowhowandskillswhosecostshavebeensustainedbyasinglecountry,cooperationishamperedbytheunbalancedistributionofcostsandgainsamongparticipantstotheregionalcooperation.For instance, inthefieldoftranslatingtheEUacquiscommunautaire,Croatiaaffordedalonetheburdenofcostsfortranslation.Asaconsequence,Zagrebisnotwillingtofreelysharetheresultsofitseffortstoregionalpartnerswhoselanguagewould permit this transfer, but rather makes certain pieces of translatedlegislationavailableuponrequest13.

3 RegionalCooperationInitiativesintheWesternBalkans:ageneralpicture

NotwithstandingtheuncertaintiesgeneratedbytheinconsistentEUapproach,amultitudeof intergovernmentalforums,regionaltables,politicalinitiatives developed in the Western Balkans during the last fifteen years,covering different fields, reestablishing regional dialogue and working,therefore,asasecuritynettopreventnewpoliticalturmoilintheregion.

SincetheEUmembershiprepresentsthecommongoalofallthecountries in the region, regional cooperation has been developed under the

12

The metaphor was firstly pronounced byCroatian President Stipe Mesi, as Milica Delevi reports.SeeMilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.,p.33.

13 MilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.,p.32.



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10 Simona Mameli

moreorlessdirectincentivesoftheEUperspectiveandexpandedovertheperiodinseveralfields,as:

Tradee.g.throughtheenlargedCentralEuropeanFreeTradeAgreement (CEFTA), as renewed in 2006,which aimsat liberalizing traderelations between Albania, Bosnia and Herzegovina, Croatia, Macedonia,Moldova,Montenegro,Serbia,andUNMIKonbehalfofKosovounderUNSCR124414;

SmallandMediumEnterprisedevelopmentf.i.the InvestmentCompactforSouthEastEurope,whichsupportsthe implementationandevaluation of investment reforms in South East Europe, operatingwiththeOECDandtheEuropeanCommission;

Public

Administration

reforms:

theBucharest

Employment

Process,

whichsupports the reviewofnational labourpolicies in the region;theElectronicSouthEasternEuropeInitiative(eSEE),launchedwithintheStabilityPactwiththesupportofUNDPandtheEU15,topromotethe introduction of information and communication technologiesacrossthediversesectorsofgovernment,commerce,educationandpubliclife;

InfrastructureanexampleistheInfrastructureSteeringGroupsetupin2006undertheStabilityPactWorkingtableII,andnowunderthe

coordinationoftheRegionalCooperationCouncil(RCC); Transport Itrepresentsprobablythemostdevelopedsectorofre

gionalcooperation,countingmanyregionalforumsandagreements,like: theMemorandumofUnderstandingon theDevelopmentof theSEECoreRegionalTransportNetwork,signedin2001,providingforreciprocalconsultationontransportpoliciestocooperateforenhancing the regional transport network in SEE, and whose implementation issupportedby theSouthEastTransportObservatory (SEETO);

the

Agreement

on

the

establishment

of

a

European

Common

Aviation

Area(ECAA),aEUdrivenexerciseextendedalsototheWesternBalkans, that ensures high and uniform safety and security standardsacrossEuropeaswellasuniformityintheapplicationofcompetitionrules and consumers rights; the SEE Core Regional Transport Network, a EU framework cooperation for land transport; theDanubeCooperationProcess(DCP),launchedin2002withintheStabilityPact

14 UnitedNationsSecurityCouncilResolutionn.1244.

15 AleksandraRakovi,eSEEanotsoeasychallenge forSouthEasternEurope, inErhard Busek, Bjrn Khne (Eds),FromStabilisation to Integration.TheStabilityPact forSouthEasternEurope,Ed.BhlauVerlag,Vienna,2010,pp.149153.

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anddealingwiththeissueofnavigabilityoftheriver,aimedatdeepeningpoliticalcooperationintheDanuberegionincooperationwiththeEU16;theInternationalSavaBasinCommission,establishedwithin

the

Stability

Pact,

related

with

the

signing

of

the

Framework

Agree

mentontheSavaRiverBasinandtheProtocolontheNavigationRegime, in 2002, promoting regional cooperation on issues related tonavigation, economic development, water management and environmentalprotection.

Energy themost relevantexampleof regionalcooperation in thisfieldistheEnergyCommunityTreatybetweentheEUandcountriesintheregion,entered intoforce in2006,thatcreatedthe legalframeworkforaregionalintegratedenergymarketforelectricityandnatu

ralgasnetworksandfortheirintegrationintotheEUmarket.

Fightagainstorganizedcrimee.g.through:theSECIRegionalCentreforCombatingTransborderCrime,establishedatBucharest in1999;thePoliceCooperationConventionforSouthEastEurope, launchedin2006withthescopeofprovidingalegalframeworkcomparabletoSchengenTreaty.

FightagainstcorruptionanexamplemaybetheStabilityPactAnticorruption

Initiative,

(SPAI),

established

in

2000

and

aimed

at

helping

policyreformsinthecountriesintheregiontoeradicatecorruption.

Bordersecuritythrough, for instance,theMigration,Asylum,RefugeesRegionalInitiative(MARRI),establishedin2004withintheStabilityPact topromote integratedbordermanagementsystems in theregion.

Arms control e.g. through: the RegionalArms Control Verificationand ImplementationCenter (RACVIAC) created in 2000, which operatesasaforumforregionaldialogueandcooperationforarmscon

trol and confidence and security building measures; the South

Eastern and Eastern Europe Clearinghouse for the Control, of SmallArmsandLightWeapons(SEESAC),establishedin2002ajointprojectofUNDPandtheStabilityPact17.

16 DCPCountriesarenowinvolvedinthedevelopmentofaEUStrategyfortheDanube,as

requestedbytheCommitteeofRegionstotheCommissionandexpectedtobe launchedby2010.

17 DimanDimov,SEESACTheSouthEastEuropeanSmallArmsClearinghouse,inErhard

Busek,BjrnKhne(Eds),FromStabilisationtoIntegration.TheStabilityPactforSouthEasternEurope,op.cit.,pp.199203;MilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.,



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12 Simona Mameli

Theabovementionedinstrumentsdealwithspecificdomainsofregionalcooperation,andtheywereoftenestablishedwithinbroaderregionalinitiatives that included different tables and multiple fields of action. Less fre

quently,

regional

cooperation

was

launched

within

specific

agreements

be

tweentheEUandcountriesintheregion.Themost famous regional table,whichcreatedwithin its frameworka

multitude of regional initiatives and agreements, is the Stability Pact forSouthEasternEurope.Established in 1999asapolitical responseofthe international community to a new wave of instability in the Balkans , andthereforeexternallydriven,mostnotablybytheEU, itwasstructuredasacoordinationmechanismforpromotingdifferentkindsofregionalcooperationintheregion.

ThePacthasbeenformallydismissedwiththeestablishmentoftheRegional Cooperation Council (RCC), which inherited from the Stability Pacttheroleofcoordinatoramongdifferentregionalinitiatives.

BesidestheStabilityPact,otherregionalforumswereestablishedintheregion,dealingwithavarietyoffieldsofcooperation:

theSouthEastEuropeCooperation Initiative (SECI), launchedbytheUSAwithintheOSCEframework in 1996asa forumtopromoteregionalcooperation inthefieldsofeconomicsandenvironment,and

thenextending itsactivitiestotransportsandsecurity issues,asthefightagainsttransbordercrime18;

theSouthEastEuropeanCooperationProcess(SEECP),established in1996onthebasisofaConferenceonStability,SecurityandCooperation in South Eastern Europe, autonomously organized by theBalkan countries themselves with the scope of promoting regionalcooperation in four main fields: political relations, economic cooperation,humanitariancooperationandhumanrightsandissuesofinternalaffairsandadministrationofjustice19;

the Central European Initiative (CEI), launched in 1989, as an ItalydrivenexerciseforpromotingregionalcooperationinCentralEuropethenextendedtoEastandSouthEastEurope andjointprojectsindifferentfields,fromtransportstoculture,fromenvironmenttoenergy;

pp.6093.18 ThespreadingofSECIsfieldsofcooperationpavedthewaytotheestablishmentofthe

SECICenterforFightagainstTransBorderCrimeinBucharest,asabovementioned.19 Duko Lopandi, Regional Initiatives in South Eastern Europe, European Movement in

Serbia,Belgrade,2001.

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TheAdriatic Ionian Initiative(AII), launchedby Italy in2000asan intergovernmentalforumaimedatpromotingregionalcooperation insecurity issues, like border controls and fight against organized

crime,and

then

evolved

to

amultiple

task

initiative

working

also

on

otherfieldsasculture,interuniversitycooperation,environmentandsoon20.

WithintheframeworkoftheseInitiativesandForumsarelevantnumberofprojectshavebeenimplemented,withpositiveimpactsongovernmentsandpeoples intheregion.Asageneralrule,regionalcooperationprojectsdirectly involveandhence impactgovernmentsand institutions.However,someprogrammesforinstancethosepromotedbytheCEIaredi

rected

to

the

grass

root

level

of

society,

involving

civil

society

organisations

andbusinesscommunities.Generallyspeaking, regionalcooperationhasdeveloped in theBalkans

onlytotheextentthat itremainedorientedtocommongoalsreferringtothe future, and did not involve issue related to the (contested) regionalpast.This isthereasonbehindtheproliferationofregionalforumsand initiativesdealingwithgeneral issuesrelatedtoeconomicalandsocialdevelopmentandthelackoftablesaimedatdiscussinginaregionalperspectiveskey political issues, that remained absolutely bilateral arguments with re

gionalcooperationhavingnovoiceuponthem.However,many issuesrelatedtothepastwouldrequireregionalcoop

erationasaprerequisiteforbeingeffectivelyfaced,butgiventheirsensitivity,countriesresistancetodealwiththematregionallevelhamperedasignificantdevelopmentofrelevant initiativesandforums.This isthecaseofcooperationonwarcrime trials, for instance, that requires regionalcoop

20

Themainspecificcharacterofthesemultilateralinitiativesistheirorganizationalflexibil

ityandtheirpoorinstitutionalization.Theiractivityiscarriedoutattwolevels:

Thepolitical level,throughoutperiodicalmeetingsofHeadsofStatesorGovernment(asinthecaseofCEI,SEECP,CEFTA)andmeetingsofMinistersofForeignAffairs(CEI,SEECP,CEFTA,StabilityPactandnowRCC,AII),whoprovideforpoliticalguidance;thebodymonitoringthepoliticaldirections,madeupofhighrankingfunctionaries,assumedifferentnamesbutisalwaysforeseeninthestructure(NationalCoordinatorswithintheCEI,theStabilityPactandnowtheRCC,aJointCommitteewithinCEFTA,SeniorOfficialswithintheAIIandsoon);

thetechnicallevel,includingsectorialmeetingsofexpertsandsometimesalsoatministeriallevel.

A Parliamentary dimension of regional cooperation and dialogue might be included, aswell.The implementationofpoliticalagenda isgenerallysupportedbyan internationalsecretariat.



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14 Simona Mameli

erationsincevictims,perpetratorsandwitnessesmightbespreadindifferentcountries.A regional frameworkofcooperationagreements isstill fartobeachieved,sinceonly fewbilateralagreementshavebeensignedbe

tween

countries

in

the

region

21

.

Minority protection might also benefit from a regional dialogue: theCentral European Initiative managed to adopt in 1994 an Instrument fortheProtectionofMinorityRights, representinghoweverapoliticaldocumentandnotalegallybindingtreaty.In2007theWorkingGrouponMinoritieswasevendismissed,assuch,bytheCEIandmerged intothebroaderfieldofinterculturalcooperation22.

Regional cooperation would make the difference also for promotingpolicies dealing with the issue of refugees and displaced persons, since a

widerangeofconditionsneedtoberegionallysatisfiedformakingreturnssustainable incountriesoforigin:a regionaldeclarationoncooperation inthis field was reached in 2005 by BosniaHerzegovina, Croatia, Serbia andMontenegro,butitremainedashyattempt23.

Asamatterof fact, regionalcooperation inWesternBalkanshasbeenlackingofarequisiteofpoliticalcourageforfacingsensitive issuesrelatedtothepast,andinterstatecooperationhasremainedmuchmorelimitedinthosefields.Thereasonsbehindthisphenomenashouldbe investigated incloserelationwiththeexternallydrivennatureofthegreatestnumberofregionalinitiatives,thatdeeplyinfluencedtheirdevelopments.

4 Towardsregionalownership?TheestablishmentoftheRCC

WiththeexceptionoftheSouthEastEuropeanCooperationProcess,all

the regional initiatives established in SEE were externally driven, lackingtherefore a fundamental component of regional ownership, awareness

21 MilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.,pp.7475.

22 CEIHeadsofGovernment,DecisionsonRepositioningoftheCEI,Sofia,27thNovember

2007.23 MilicaDelevi,RegionalCooperationintheWesternBalkans,op.cit.,pp.7576.Asforre

gional cooperation in the field of missing persons, a positive step has to be acknowledgedsincetherecentestablishmentofaRegionalCommission(REKOM)supportedbyacoalitionof

civil society organizations from different countries in the region. REKOM was officiallylaunchedin2008toestablishfactsregardingwarcrimesandotherserioushumanrightsviolationsintherecentpastofformerYugoslavia.

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andresponsibility.Inotherterms, itremaineduncertainwhetherthecountries in the regionhadsincerelyacknowledged thevirtuesand the importanceofregionalcooperationperse,orinsteadwerejustcooperatingeach

other

pushed

by

their

final

interest

in

joining,

and

bilaterally,

the

EU.

The issueofthe lackofregionalownershipwasfacedandfinallyaddressedbytheStabilityPactsstakeholders in2008,withthe launchingoftheRegionalCooperationCouncil(RCC)asthesuccessoroftheStabilityPactforSouthEasternEurope.TheRCCwasestablishedtoprovidearegionallyownedcooperation framework to takeover the roleof theStabilityPact,andtoprovidetheSEECP,theonlyregionalforumauthenticallyoriginatedwithin the region,withoperationalcapabilities24.Accordingto itsStatute,theRCCwassupposedtofunctionasafocalpointforregionalcooperation

inSEE,withtheaimofprovidingforpoliticalguidancetoandreceivesubstantive inputs from relevant regional task forces and initiatives active inspecificthematicareasofregionalcooperation25.

TheRegionalCooperationCouncilwasestablishedundertheauspicesoftheEUwiththeaimofcontributingtotheenhancementofstability,security,mutualrespectanddialogueinSoutheastEurope,actingasakeyinterlocutorandoperational linkbetweentheEUandtheSEECPwithregardtoproject generation and prioritization, particularly in the context of theEuropeanCommissionsMultiBeneficiary InstrumentforPreAccessionAssistance (MBIPA),coordinating internationalpolitical, technicaland financialsupport26.

It was therefore supported by the EU as a preferential partner representing,withasinglevoice,regionalcooperation inSEE,and,assuch,RCCgotpoliticalsupportalsointermsofeconomicalfinancingforpartofitsactivities27.TheEUparticipates intheRCC inatroikaformat(CommissionEUPresidencyCouncilSecretariat),whilecooperationbetweentheRCCandthe European Commission is ensured by close contacts between the RCC

24 StabilityPactforSouthEasternEurope/RegionalCooperationCouncil,JointDeclaration

ontheEstablishmentoftheRegionalCooperationCouncil(RCC),Sofia,27February2008,AnnexII,StatuteoftheRCC.

25 Ibidem.

26 RCCmandate,availableonwww.rcc.int

27 TheoperationalbudgetoftheRCCamountsat3millioneuroperyear.TheEUcovers1/3

oftheRCCbudget(1millioneuro),whiletherestiscoveredbyBoardsmembers(EUcountries,Canada,USA,Norway,Switzerlandandmany InternationalOrganisationsprovidefor1million

eurowhileregionalmembers Albania,BosniaandHerzegovina,Croatia,Macedonia,Moldova,Montenegro,Serbia,TurkeyandUNMIKonbehalf ofKosovo in accordancewith theUnitedNationsSecurityCouncilResolution1244provideforanother1millioneuro).

http://www.rcc.int/http://www.rcc.int/


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16 Simona Mameli

andtheDGEnlargement.TheRCCwasexpectedtofocusonspecific fields:EconomicandSocial

Development,InfrastructureandEnergy,JusticeandHomeAffairs,Security

Cooperation,

Building

Human

Capital

and

Parliamentary

Cooperation.

5 Oneyearafter:thepoliticallandscapeafterKosovoindependence,theglobalcrisisandtheuncertain

certaintyoftheregionalownershipwithintheRCC

Welcomed by the international stakeholders formerly involved in theStabilityPactastheproofofanachievedmaturityoftheregiontodealbythemselves to regional cooperation, theestablishmentof theRCCand itsfirstyearofactivitiescoincided,however,withahighlyuncertainconjunctureofthepoliticalandeconomic landscapeintheWesternBalkansthat ithadtocopewith.

According to RCC mandate, the development of prosperous marketeconomiesunderpinnedbyadequatesocialsystemsandpoliciesrepresentacornerstoneofpeaceandstability inSouthEastEurope28,andassuch

regional cooperation in all fields related to economic development wasconsideredoneofthemajortasksoftheRCCsince itsveryestablishment.Given the fact thatduring the lastdecade thecountriesof the regionengagedinmanyjointactivitiesaimedatfosteringtheeconomicdevelopmentandthesocialcohesionoftheregion,withthesupportof internationalfinancialinstitutions,theRCCwasaskedtoputitselfasthemaincoordinatorandfacilitatorforthose initiatives.Itsmandate includedsupportto investment facilitation, SME development and trade liberalization, to be implemented through the promotion of political support and coordination

amongdifferentinitiatives.Withthescopeofpromotingeconomicdevelopmentoftheregion,the

RCCwassupposedtosupportregionalcooperationalsoonenergyand infrastructure,asthemost importantprerequisitesfortheoveralleconomic,social and environmental stability and prosperity of the region. Here theRCCs ambition, throughout its participation in the International FinancialInstitutions (IFI) AdvisoryGroup and its technical working groups, was toplayas an interfacebetweenpolicy makers, the IFIs,businesscommunity

andsocial

partners,

as

well

as

an

instrument

for

information

exchange

for

28

www.rcc.int,EconomicandSocialDevelopmentsection.

www.pecob.eu
http://www.rcc.int/http://www.rcc.int/


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bothSEEcountriesandIFIs,alsoidentifyingprojectseligibleforsupportbyfinancingfacilitiesestablishedbytheEuropeanCommission.

However, theRCCstarted tobeoperative in the region incoincidence

with

the

first

signals

announcing

the

spreading

of

economic

crisis

to

the

Balkans, inthesecondhalfof2008,facingamarkedtrendof involution inregionalcooperationoneconomicfields.Asaconsequence,RCC'smandateontheeconomicfieldremainedalmostunaccomplished.

Alsofromapoliticalpointofview,regionalcooperationunderRCCfacedsevere risks of involution. The unilateral declaration of independence ofKosovo,thatimmediatelyfollowedtheestablishmentoftheRCC,createdaserious problem to the recently established Institution, at least in twosenses:

firstly, given the participation of Serbia and other nonrecognizingStates29inthesameforum,Kosovocouldbeadmittedtoparticipateonly besides UNMIK representatives on behalf of them, while KosovoauthoritiesclaimedtobeadmittedasrepresentativesoftheRepublicofKosovo,withoutUNMIKonbehalfofthem;

secondly, the same antiindependence States did not recognizenewpassportsissuedbyKosovosauthorities,hamperingtheadmissionofKosovopeopletravellingwithnewdocumentsintheirterrito

ries.SincemanyRCCmeetingsareheld inSarajevo,wheretheRCCSecretariat seats, the participation of Kosovo representatives hasbeen hampered by this border issue. Moldovan authorities did notevenadmittheKosovodelegationtoparticipateatthefirstRCCannualmeeting inChisinau, inJune2009,manifestingtheseriousrisksofexcludingKosovofromregionalcooperationintheregion.

6 TheEUinterventionforsupportingregionalcooperationintimesofpoliticalandeconomical

uncertainty

RepresentingtheRCCthecoreregionalcooperation initiative intheregion,establishedundertheauspicesoftheEUasasinglerepresentativefor

29 BosniaHerzegovina, Greece, Moldova, Romania, Slovakia, Spain are all RCC members

anddonotrecogniseKosovoasanindependentState.Thesamecountries,withtheexceptionofSlovakia,arealsomembersof theRCCboardandthereforestakeholders in theRCCdecisions.



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18 Simona Mameli

alltheregionalforumsoperatingintheregionandassuchaprivilegedinterlocutorforBrussels,theEuropeanCommissioncouldnotavoidtointerveneforrescuingregionalcooperationfrommoulderingandforpushingtheRCC

towards

a

more

appropriate

track

of

effectiveness.

TheEuropeanCommissionintervenedbyaddressingdirectlytheRCCforpromoting itseffectivenessand inclusiveness,committing itselftosupportRCCreformsinordertostrengthenregionalcooperationintimesofpoliticalandeconomicaluncertainties.

6.1 TheappealtoeffectivenessforRCCAcknowledging the troubles that theRCCwas facing, inOctober2009

theDGEnlargementdraftedaNonPaperaddressingtheneedstomoveto

wardsa more efficientRegional Cooperation Council30. It wasprimarilyaddressedtotheRCCand its lackofbotheffectivenessandadoptionofaclear strategy to pursue its mandate, that, according to the Commission,shouldbethatofpromoting,coordinatingandrationalizingregionalcooperationintheWesternBalkans31.

BeforetheestablishmentoftheRCC,regionalcooperationintheregionhad been characterized by mere declaratory diplomacy, lack of concreteness and of coordination among a plethora of regional initiatives and forumsintheregion,promotedandfundedbydifferentandsometimescompeting regionaland internationalactorsandcharacterizedby lackofcommunicationamongthem,causingdispersionofresourcesandduplicationofactivities. Hence, the set up and running of the RCC was considered thepremiseforaturningpointforregionalcooperationintheregion,sinceitwasexpectedtogiveananswertoproblemssuchasoverlappingand lackofcoordination,andtogranteffectivenesstoregionaldemandsfacingtheEU throughout one single spokeperson representing regional coopera

tion in the region.However,said theCommission,theRCCsactivities todateonlypartlyfulfil itsaimsasdescribed intheStatute,and insufficientlyprovidetheexpectedfocusandaddedvaluetoregionalcooperation32.

Since itsestablishment,themainactivitiescarriedoutbytheRCCwereessentiallyfocusedonestablishingpoliticalcontactsandorganizingconferencesandworkshops,compilingamatrixofpriorityareas,recommenda

30

Commission(DGEnlargement)nonpaper,MovingtowardsamoreefficientRegionalCooperationCouncil,WesternBalkansRegion,Meetingdoc.168/2009,20.10.2009.

31 Ibidem,p.4.

32 Ibidem,p.3.

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tionsandproposednew initiativesas reportedby thecountries in the region,aswellasalistofinitiativesandtaskforcesoperatingintheregion.

TheRCCorganisedseveralmeetingsinvolvinginitiativesoperatinginthe

same

fields,

in

order

to

promote

their

networking

and

avoiding

duplica

tions.As a positive achievement, the RCC also succeeded in establishing a

closelinkwiththeEUasforIPAassistance,forjointlyidentifyingpriorityareasorprojects.

However, besides these results, the European Commission underlinedthegloballyunsatisfactoryperformanceoftheRCCandtheneedtosolvemajor pitfalls in its functioning. Particularly, the European Commission lamentedthat:

HighlevelcontactsbytheSecretaryGeneralimprovedRCCsvisibilitybutdidnotserve,ontheirown,topromoteregionalcooperation

Organisation and coorganisation of conferences and meetings bythe RCC tended to be random, lacking a strategy of priorities andclearobjectives,withnofollowuptomostoftheseactivities

TheRCChadnotmanagedtofulfilitstaskofprovidingpoliticalguidancetotheregion, limiting itselftosimplycollectproposalbycountries,withnocapacityofestablishinganagendaofpriorities,norto

dulyexaminesuchproposalsbothanalyticallyandfinanciallybeforesubmittingthemtotheEU.

Insum,statedtheEuropeanCommission,

theactivitiestodateoftheRCCtend to focusmoreondeclaratorydiplomacyandflaggingitspresence inevents,atexpensesofconcreteactionsoffering value added to the region, based on a focused strategy and priorities33.

HencetheneedtobetterfocusRCCactivitiesandimproveitseffective

ness,withtheEUcommittingitselftosupportRCCreforms.

6.2 Theappealtoinclusiveness:theKosovoissueLackofeffectiveness inRCCsactionmeant lackofcoordinationat re

gionallevelforbetterfacingtheeffectsoftheeconomicalcrisis,atleastinordertoexpress jointdemandsandregionalexpectationstowardstheEUwithinasinglevoice.But itmeantalso incapacityofgrant inclusivenessof

all

regional

partners

within

the

regional

dialogue,

being

Kosovos

participa

33 Ibidem.



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20 Simona Mameli

tionhamperedbytherecognitionnonrecognitionissue.ThecommunicationoftheCommissionwasparticularlycarefulinunder

lining the importance of maintaining Kosovo on board within the RCC.

Reminding

problems

related

to

Kosovo

travel

documents

non

recognition

by the Bosnian authorities, and the impossibility for the UNMIK/KosovodelegationtoattendtheRCCAnnualMeetinginChisinau,inJune2009,because of a similar attitude by the Moldovan authorities, the EuropeanCommissionstressed the importanceofKosovos inclusivenessandanticipateditsfullsupporttotheRCCtoworkforthisscope34.

7High

stakes

in

play:

the

need

to

rescue

and

enhance

regionalcooperationfromtheEUperspective

InordertoaddressRCCstroubles,theCommissionsuggested,throughitsNonPaper,somespecificlinesofactiontobetaken,withtheEUbackingandsustainingtheRCCtoaddressproblemsandtobetterstructurefutureactivity.

Regionalcooperationstroubles,indeed,representedaconcreteriskforthe maintenance of the EU strategy in Western Balkans, since the sameplatformoftheStabilisationandAssociationProcess,restingonarequisiteofregionalcooperation,riskedtocreakfacingthefailureofRCCeffectivenessinactingwithaleadingroleintheregion.

TheEU interventionforrescuingregionalcooperationfrommoulderingwas justified by the high stakes involved, even if in spite of violating theregionalownershipprinciplesocelebrated in2008,atthetimeofRCCsestablishment.Intimesofpoliticalandeconomicuncertainty,duetothecooccurrenceofKosovosindependenceandthespreadingofeconomiccrisis

intheregion,itmeant,therisksrelatedtoamoulderingoftheregionalcooperationnetworkintheregionduetoitsthelackofinclusivenesswasbecomingmoreandmoredangerousforthestabilizationstrategypursuedbythe EU in the region,and the issueofownership couldbe evenbeputaside.

Indeed,thesameStabilisationandAssociationProcessrestsonabasicrequirementofregionalcooperation.Whilecandidatesandpotentialcandidates commit themselves to accept and fulfil the requirements as establishedbytheEU,inexchangetheygettechnicalandfinancialsupportfrom

34

Ibidem,p.6.

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theEUforgettingthescopesrelatedtoconvergence.Forthisreason,theSAPhasforeseenpartnershipagreements,thatcouldbebilateralbutalsoregional,betweentheEUandregionalStates35.Theseregionalagreements

are

exactly

those

that

the

EU

has

established

so

far

in

strategic

fields

like

energy and transports, and they can work until the regional cooperationnetwork is able to connect every single component. Every malfunction inthenet,namelyahole,cancompromisethetenureoftheallnetwork,thatisstabilizationintheregion.

Facingpoliticalandeconomicaluncertainties,duerespectivelytotheissue of Kosovos independence and to the effects of the global economiccrisis, the regionalcooperationnet risked to collapse,especiallysince themost important regionalactor, theprivileged interlocutorof theEU,RCC,

wasrunningupagainstdifficultiesandalackofstrategy.

7.1 TherelevanceofKosovoinclusionwithintheregionalcooperationframework:politicalarguments

Fromapoliticalpointofview,theinterventionoftheEUincorrectingthepathofregionalcooperationwasareactionagainstamoulderingoftheregional cooperation network due to Kosovos exclusion, and that couldhamperstabilityintheregion.

While the Stabilisation and Association Process proceeds at differentspeedsfordifferentcountries,Kosovowaslinkedtothesameprocesswitha special tracking mechanism, which was aimed at not leavingPrishtina/Pritinabehindintimesofstatusuncertainty.ThisspeciallinkwiththeSAP,andhencewiththesameEUperspectivethatalltheWesternBalkansshare,workeduntilitwasnotsurewhetherKosovocould jointheEUeitherasanindependentStateorwithSerbia,asa(restored)provinceofitssovereignterritory.Butaftertheunilateraldeclarationofindependenceand

theconsensusbreakingwithintheEU,thewholestrategyofstabilizationofthe Western Balkans via their (perspective) of EU integration started tocreak.Sincefiveoutof27EUmemberStatesdonotrecognizeKosovoasanindependentState(Cyprus,Greece,Romania,SlovakiaandSpain),andtheEUenlargementhastobeagreedbyalltheEUmembers,theEUperspectiveisblurringmoreandmoreforKosovoandthesamestrategyofstabilizationpromotedbytheEUputatriskifthecredibilityofitsintegrationbe

35 LiliaCavallari,IlquadromacroeconomiconeiBalcaniOccidentalidieciannidopogliaccordidiDayton, inFrancescoGuida(acuradi),Daytondieciannidopo:guerraepacenellaexJugoslavia,Caroccied.,Roma,2007,pp.156157.



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22 Simona Mameli

comes uncertain. In other terms,sinceKosovowill face tremendous challenges forgetting,even in the long run,aEUmembershipasaState, theperspectiveoftheWesternBalkansasaregionwithintheEUmightbeen

dangered,

because

a

hole

will

remain

within

its

core.

For

this

reason,

in

2009 theEU launchedaspecificCommunicationonKosovosEUperspective, reaffirmingitswillingnesstoassisttheeconomicandpoliticaldevelopmentof Kosovo througha clear European perspective, in linewith theEuropean perspective of the region36, and aimed also at fostering Kosovosinclusioninregionalcooperationtables.

TheabsenceofanagreedpositiononKosovosstatusdoesnotpreventtheEU fromsubstantialengagement inKosovo,said theEuropeanCommissioninMay2009,withintheCommunication.

The approach of diversity on recognition but united in engagement isworkingandshouldbestrengthenedsinceKosovomustnotbeen leftbehindastheregionprogressestowardstheEU37.

TheCommunicationsetaseriesofpracticalproposalaimedatstrengtheningthelinksbetweenKosovoandtheEUdimensioningeneralterms,andunderlined the need to not leave Kosovo behind, especially as far as regional cooperation is concerned. Multiple appeals to pragmatism are repeatedacross thedocument,addressedboth toKosovoGovernmentand

totheregionalpartners, inordertoassureKosovo inclusion inregionaltables(startingwiththeRCC):

RegionalCooperationisanessentialelementofEUPolicyforSouthEastEurope.KosovosregionalcooperationiskeyforitsEuropeanapproximationagenda. Itscontinuedparticipation inregionalcooperation initiatives iscommercial,economicandpoliticalimportance.

UNMIK has been the signatory of a number of regional cooperation arrangements on behalf of Kosovo. The mandate of reconfigured UNMIK includes the facilitation of Kosovos external representation. However, UNMIKs capacity is limited. Kosovo would benefit from a constructive and

pragmatic approach in its efforts to enhance cooperation with countries intheneighbourhood.Kosovoneedstomakeuseofthemeansat itsdisposal.The Kosovo government needs to issue a clear and comprehensive set ofguidelines for all public institutions to apply consistently at all levels of re

gionalcooperation38

.

36

CommissionoftheEuropeanCommunity,CommunicationfromtheCommissiontotheEuropeanParliamentandtheCouncilKosovoFulfilling itsEuropeanPerspective,Brussels,14thOctober2009,p.1.

37 Ibidem,p.13.

38 Ibidem,p.12.

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The EU appeal to pragmatism was addressed both to countries in theregion tosupportKosovosparticipationandavoidingadoptingmeasurehampering it and to Kosovos authorities, that beyond the formalism

meant

keep

on

participating

in

regional

forums

even

if

you

are

allowed

to

enteronlywithUNMIKonbehalfofKosovounderUNSCR1244.Theappealtopragmatismrecursseveraltimes:

TheCommissionechoesthecallingoftheEUdelegationattheRegionalCooperationCouncilmeetingatChisinau inJune2009urgingallpartiesconcernedtoadoptaconstructiveaptitudeinfindingpragmaticwaysofensuringthe inclusive character of regional cooperation in SouthEast Europe. TheCommission strongly encourages all parties to seek practical and pragmatic

solutionsandisreadytofacilitatealleffortstothiseffect39

.

Whilereconfiguredaftertheunilateraldeclarationof independence,UNMIKspresenceremainsforeseenundertheprovisionsoftheUnitedNations Security Council Resolution 1244, since no agreement was possiblewithintheUNSecurityCouncilonanewresolutiononKosovo.

Within its declaration of independence, the Kosovo Assembly, representingKosovopeople,havewelcomedbothan internationalpresenceofcivilianobserversintheterritoryofKosovotomonitorPrishtina/PritinareformstobeconsistentwiththeAthisaariPlan(notendorsedbytheUNSC)

and

a

mission

lead

by

the

EU.

Also

the

NATO

was

invited

to

remain

in

Kos

ovo according to the UNSCR1244 and the Ahtisaari Plan until Kosovo authoritieswillbepreparedenoughtoassumefullresponsibilityoversecurityissues40.

This invitation implicitlymeansthatthe internationalpresence isaKosovo Governments guest, and one day will leave the country. Indeed, theConstitutionofKosovo,adoptedon9thApril2008andentered into forcethe15thJune2008,doesnotcontainanyreferencetotheEUmission,whileitisinterestingitforeseesthataninternationalmilitarypresenceisallowed

underrelevantinternationalinstrumentsincludingUnitedCouncilSecurityCouncil Resolution 1244 and the Comprehensive Proposal for the KosovoStatusSettlementdated26March200741.Whatisweird,theUNSCR1244reaffirmsSerbiansovereigntyoverKosovoandPrishtina/Pritinaisnormallyverycarefulwithquotingit.However,alsothepragmaticapproachtore

39

Ibidem.40

AssemblyofKosovo,DeclarationofKosovos Independence,Prishtina/Pritina,17thFeb

ruary2008.41 AssemblyofKosovo,Constitutionof theRepublicofKosovo,Prishtina/Pritina,9thApril

2008,p.60,availableonwww.kushtetutakosoves.info.

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24 Simona Mameli

gionalcooperation,stronglybackedbytheEU,impliesthatKosovoauthoritieshavetoacceptthatUNMIKcontinuetorepresentthem inregionalforums.Theparadoxicalsituation lies inthefactthateven ifKosovoauthori

ties

would

like

UNMIK

to

cease

its

functions,

the

international

mission,

that

still remains in force pending a new resolution of the Security Council,representstheonly instrumentthatKosovoauthoritieshavetogranttheirinclusion into the broader net of regional cooperation, and therefore thegranttonotbeenleftbehind.AndthisispreciselythepragmatismtheEUisaskingfor.

Kosovo, through UNMIK, participates in a number of regional forums:theRegionalCooperationCouncil;theEnergyTreatyCommunity(ETC),theEuropean Common Aviation Area Agreement (ECAAA), the SouthEast

Europe Transport Observatory (SEETO), the Central European Free TradeAgreement(CEFTA),theEUCharterforSmallEnterprises.KosovojointalsotheBroadbandSoutheastEuropeInitiative(BSEI),theElectronicSoutheastEurope Initiative (eSEE), the Regional School for Public Administration(ReSPA),theSoutheastEuropeanCooperativeInitiative,tworegionalenvironmental initiatives (RENA and ECENA)and the InvestmentCompact Initiative42.

It remains crucial that Kosovo authorities will maintain this pragmaticapproachalsointhefuture,inordertonotbeexcludedbytheregionalcooperationnetwork thathasbeenbuiltaround theperspectiveofnextEUintegration.

7.2 TherelevanceofKosovoinclusionwithintheregionalcooperationframework:economicalarguments

Political problems related to Kosovos independence have developedsimultaneouslywiththespreadingoftheeffectsoftheglobaleconomiccri

sis throughout the Western Balkans. In times of economic turmoil, it becomesevenmorecrucialthatallsegmentsofthesystemremainengagedintheregionalcooperationnetwork.Indeed,thesystemofregionalcooperationmayworkonlywithaprerequisiteofinclusiveness.Likeanet,noholeshavetobepresentinthefabricinordertoserveitsscopeofsecurity,stabilityanddevelopment.

EvenifKosovowasrelativelylittleaffectedbythecrisisduringthe2009,

42 CommissionoftheEuropeanCommunities,CommunicationfromtheCommissiontotheEuropeanParliamentandtheCouncilKosovoFulfillingitsEuropeanPerspective,op.cit..,p.3.Thelistisnotexhaustive.

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dueto its limited integrationtoglobalmarkets theadoptionoftheeuro,lowexternaldebtandscarceexportshaveshieldedtheeconomyfromthenegativeeffectsoftheglobalrecession43 however,thefutureaheadisnot

encouraging:

deficit

in

its

budget

is

expected

to

increase,

since

the

inflows

of foreign direct investments and remittances coming from Diaspora aredropping,as well as levels ofpublic investments, inparallelwith increasepressuresongovernment revenues.Kosovosoverall tradedeficitwasestimatedat43%ofGDP in2009,andthesubstantialdeficit intrade ingoodand services was not helped by regional cooperation through CEFTA, becauseofitsinabilitytosolvetheblockadeofKosovoexportstoSerbiaandtransit trade to Bosnia and Herzegovina in 200944. Infrastructure weaknesses,energyshortages,highcapitalcostsandlowlevelofskillsaresome

of themost relevantstructuralproblemsaffectingKosovo,andwithoutafullengagementinregionalcooperationtheycannotbesolved.

Intimesofeconomicalcrisis,wherethefullengagementandcoordinationofallregionalactors isfundamentaltonotreversepositiveoutcomesderiving from regional cooperation, especially within the economic field(agreementsunderCEFTA,for instance,butalsobenefitsderivingfromInternationalFinancial Institutionssupporttothe region,andallthe framework of regionalcooperationdeveloped within theenergy and the transports fields), ensuring Kosovo participation became a crucial issue, especiallyworryinginBrussels,sinceitcouldhamperthesameprocessofstabilizationoftheregionthroughitsanchoringtotheEU.

EmbeddingKosovowithintheregionalcooperationframeworkisnecessary also for promoting its attractiveness of foreign direct investments,given the fact that Prishtina/Pritina already falls behind its regionalneighboursinthissense.Evenifthestatusissuerepresented,beforethedeclarationofindependence,oneofthemajordisincentivetoforeigninvestors, after independence the lack of attractiveness risks to become even

worstbecausethecommercialregimewiththeEUremainsprecarious. Indeed, lackinga formalagreementbetween theEUandKosovo related totradepreferences (thecurrentpreferential regime isdue toexpireon31stDecember2010,andthereisnotaStabilisationandAssociationAgreement,

43

Commission of the European Communities, Conclusions on Kosovo (under UNSCR1244/99) (extract from the Communication from the Commission to the Council and theEuropeanParliament"EnlargementStrategyandMainChallenges20092010",COM(2009)533final).

44 CommissionoftheEuropeanCommunities,CommunicationfromtheCommissiontotheEuropeanParliamentandtheCouncilKosovoFulfillingitsEuropeanPerspective,op.cit..,p.4.



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26 Simona Mameli

or an Interim Agreement, with the EU, as it exists instead for the othercountriesintheregion),adeteriorationofKosovostradingpositionislikelytodevelop,bothinabsoluteandinrelativeterms.Theattractivenessoffor

eign

investments,

already

poor,

would

deteriorate

if

Kosovo

producers

are

expectedtofacedifficultiestoexporttotheEU,thatisKosovosmaintradepartner.

Even if autonomous trade preferences will be extended45, without apermanenttradeagreementbetweentheEUandKosovothesustainabilityof longterm termeconomicdevelopmentofKosovo remainsat risk46.Asfornow,Kosovoisfarfrombeingreadytonegotiateandimplementatradeagreement with the EU, because too many reforms, especially within itsadministrative capacity, needs to be implemented. For this reason, again,

the inclusiveness of Kosovo within regional cooperation forums, throughforinstancetheRegionalSchoolforPublicAdministration,iscritical.

More generally speaking, regional cooperations inclusiveness for Kosovo remains crucial for its development in every field where there is acommongoodtobeproducedbuttheresourcesofthesinglecountryarenotenough,alone,togetthescope.This isparticularlytruefor fields likeenergy, transports, and environment, where the need for investments isdisproportionallyhighandasksforaregionalcoordinationtowardsinternationaldonorsorfinancialinstitutions.Theargumentsgoesalsointheoppositedirection:regionalcooperationnetsineveryfieldcouldworkonlyifall regional components are interconnected and may contribute to theachievementofthecommongoal.Fightagainstorganisedcrimeistheperfectexampleof a regionalnet that could workonly if Kosovo is includedandcanparticipate,but thesameprincipleapplies inall fieldsof regionalcooperation.

The European Commission urged the need to increase Kosovos involvement in regional arrangements for energy cooperation and produc

tion,implementenergymeasurestoreduceenergydemandandincreaseitsuseofrenewableandalternativemeansofenergygeneration,askingtoall

45

On22nd February 2010, theEuropeanCommission proposed to renew the preferentialregimeuntil31stDecember2015, to furtherallow thecustoms territoryofKosovo tobenefitfromthecurrentdutyfree,quota.freetreatmentforalmostallitsexportedproducts(withtheexceptionofbabybeef, fishandwinewhicharesubjectedtoquota).SeeEUPressReleases,European Commission proposes to renew autonomous trade preferences for theWestern Balkans,Brussels,22February2010,www.europa.eu/rapid/pressReleasesAction.do

46 CommissionoftheEuropeanCommunities,CommunicationfromtheCommissiontotheEuropeanParliamentandtheCouncilKosovoFulfillingitsEuropeanPerspective,op.cit.,p.7.

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partiesintheregiontoallowKosovosinclusionandfullparticipationinregionalarrangements liketheEnergyCommunityTreaty,being itinthe interestoftheRegionatlarge 47.

The

Commission

underlined

also

the

need

to

all

parties

of

the

Transport

Community Treaty to ensure Kosovos inclusion, to a continuous engagement of Kosovo within the European Common Aviation Area Agreementand, within the environmental protection field, within the Regional EnvironmentNetworkforAccession.Withoutapiece,nopuzzlecanbesolved,thisisthesense.

8Strengthening

regional

cooperation

in

times

of

economiccrisis:theroleofForeignDirectInvestments

Asapositiveincentivetomakeregionalcooperationstrengtheningandreinforcingitseffectiveness,theEUlaunchedaconcretesignaltryingtoaddresswithina regional frameworkthecrucial issueof rescuingtheattractivenessofForeignDirectInvestmentsintheregion.

The decrease in FDI affected all the region and represented the firstmeanthroughwhichthecrisiswastransmittedfromWesternEuropecountriestotheWesternBalkans.Intimesofeconomicuncertainty,theneedforforeigndirectinvestmentsbecomesevenmoreimportanttomakenationaleconomiesrescuetheirpreviouspathsofgrowth.

Sustained economic growth, indeed, requires substantial rates of investment.Fastgrowingeconomiesinvestalargeshareoftheoutputinorder tobringmore resources to theproductionprocess. Investment isnotonlyadirectboostertooutput, italsobringsnew,moreproductive,technologiesandstimulatesTotalFactorProductivitygrowth48.

OutputgrowthinSEEduringthe1990swasmostlydrivenbyariseinTotal Factor Productivity, which at its turn could be attributed to posttransitionreallocationof resources(privatizationofstatepropertyandrestartingofidlecapacities)49.SincetheimprovementsinTFPthatcamefromthesimplereallocationofresourcesthroughprivatizationhavebeenpartlyexhausted,theTFPledgrowthcannotbethesingledriverofgrowthinthe

47

Ibidem,pp.1011.48

European Commission, DirectorateGeneral for Economic and Financial Affairs, TheWesternBalkansinTransition,op.cit.,p.43.

49 Ibidem,p.27.



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28 Simona Mameli

future. While the role of factor accumulation (capital and labour) will becrucial for accelerating growth, increasing the quantity and quality of investment is critical for maintaining and accelerating TFP growth. Hence,

achieving

higher

investment

rates

is

an

overarching

objective

for

the

growthoftheSEEeconomiesingeneral.Foreign direct investments have positive effects on the recipient

economies, both in the short period, improving production and employment,andinthemediumterm,promotingthedisseminationoftechnologicalprogressandproductivitygrowth,contributingalsotothedevelopmentoflocalentrepreneurship50.

Theroleof investments is importantbothforeachsingleeconomyandfortheregionasawhole.

TheWesternBalkansstandatthecrossroadsofcrucialnetworks,be itenergyroutesortransportcorridors.Enhancingtheregion'seconomiccooperationrequiresnotonlypoliticalwill,butalsosubstantial investment inbetterregional interconnections,for instance improved infrastructureandcrosscountrynetworks.Transports,energy,environmentareallfieldsthatask for regional cooperation and needs a coordination of policies andstrategies in order to get international donors and investors support.Hence,financingrequirementsaresubstantial.TheEuropeanUnionandtheInternationalFinancial Institutions,mostnotablytheEuropean InvestmentBank (EIB), the European Bank for Reconstruction and Development(EBRD), the Council of Europe Development Bank (CEB) and other European bilateral institutions as wellas theWorld Bank,havebeenplayingacrucial role in the past by providing financial and technical support. Theirimportance is now even more relevant in times of economical crisis andglobalrecession.

WiththeeffectsoftheeconomicalcrisisspreadingtotheBalkans,andreaffirmingtheimportanceofregionalcooperationintheregion,theEuro

peanCommissionpromotedtheestablishmentofanew frameworkto facilitateinternationalinvestmentsinkeyregionalsectors.TheWesternBalkans Investment Framework was formally launched the 9th December inBrusselsattheinternationalconference"TheWesternBalkans:OvercomingtheeconomiccrisisfromregionalcooperationtoEUmembershipand,asinthewordsofCommissionerRehn,isexpectedtofosterregionalcooperation51.

50 LiliaCavallari,IlquadromacroeconomiconeiBalcaniOccidentalidieciannidopogliac

cordidiDayton,op.cit.,p.163.

51 EuropeanCommissionerOlliRehnsforewardattheConference"TheWesternBalkans:

OvercomingtheeconomiccrisisfromregionalcooperationtoEUmembership,9December

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The WesternBalkans InvestmentFramework (WBIF)poolsandcoordinatesdifferentsourcesofgrantsand loans forpriority infrastructureprojects,givingprioritytotransportinfrastructures,accesstofinanceforsmall

and

medium

enterprises

and

energy

efficiency

projects.

It

is

jointly

financed

bytheCommission,theEBRD,theEIB,theCEB,andotherbilateraldonors.Thisnewfacilityaimsatmakingaccesstofinanceeasierforstakeholders

soastoboost investments intheregion, introducingasingleaddresstosubmit project proposals and a single screening and assessment for approvalprocess.

IntheEUCommissionerOlliRehnswords,

the launching of the WBIF represents a great achievement in times ofeconomiccrisis,anothertangibledemonstrationoftheEU'scommitmentto

the region anda booster to furtherenhance regionalcooperation in the region52.

The launchingoftheWBIFrepresentedanotherEUsignaladdressedtothefinalscopeofstrengtheningregionalcooperation intimesofeconomicalandpoliticaluncertainties,besidesthepoliticalmessagesalreadytransmittedthroughtheEUcommunicationsonRCCseffectivenessandontheneedtograntKosovosinclusionintheregionalcooperationnet.

The issueofKosovos inclusionwithin the regionalcooperation frame

workwas

supposed

to

serve

also

for

granting

Kosovos

access

to

the

WBIF.

Indeed,KosovoasanindependentStatehasbeenadmittedonlytotheWorldBankandtotheInternationalMonetaryFund,butnottotheinternationalfinancial institutionsworking jointlywithinthenew investmentfacility, and which are also RCC members. Since Kosovo has no direct voicewithinthoseinternationalfinancialinstitution,therelevanttablefornegotiating Kosovos access to international investments and loans becomes,again,theregionalone.

9 FinalconsiderationsAccording to the perspectives of this paper, in times of political and

economical uncertainties, due to the cooccurrence of Kosovo independenceandtheeffectsoftheeconomiccrisisspreadingtotheregion,possible

2009.52 European Commissioner Olli Rehns speaking points at the signature of the Western

BalkansInvestmentFramework,Brussels,9December2009.



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30 Simona Mameli

threatstostabilityintheregiondoexistandappearrelatedtorisksofinvolutionforregionalcooperation.Facingthispossiblethreat,theEUsentmultiplesignalstheEUaddressingRCCforpromotinganeweffectivenessand

Kosovos

inclusion;

the

EU

communication

on

the

EU

perspective

of

Kosovo

andtheappealtopragmatismtoallregionalstakeholderstograntKosovosinclusionwithinthe regionalcooperation framework;the launchingoftheWBIFasstrictlyconnectedtoregionalcooperation, intimesofeconomicalcrisisandgloomyexpectationsaboutFDIinflowsintheregionforpromotingrecoveryaspartofauniquestrategyaimedatstrengtheningregionalcooperation intimesofcontinuouscreaksduetopoliticalandeconomicalturmoil.

Indeed, the coincidence of RCC difficulties in facing political problems

andassumingpoliticalguidanceintheregion,inparallelwithitsinabilitytocopewiththespreadingofeffectsoftheeconomicalcrisisintheregionandactingasasinglespokeperson forthe regionsneeds,weredelineatingapossiblethreattostabilityfortheEUstrategy intheregion,being itbasedonanessentialrequirementofregionalcooperation.

While the EU has reaffirmed its commitment to regional cooperationandtoRCCasitsmainrepresentativeintheregion,thelatterhastoestablish a concrete strategy to grant effectiveness to its mandate and at thesametimeitneedstoensureKosovo inclusivenessinthegreatestpossiblenumberof initiatives, inordertograntthesustainabilityoftheEUSAPassuchintheregion.Lackofstrategycauseslossofresourcesandopportunities,andshouldbeaddressedalsointhesenseofabetterrationalisationofregional forums operating and often overlapping in the region. Thismeansalsotoassumeastrongerattitude infosteringpoliticalguidance intheregion,sincemanysensitiveissuesstillremainexcludedbyregionaldiscussionsbecauseof lackofpoliticalcourage,andtheywouldbenefitfrombeingfacedcollectivelywithinaregionalperspective.

Since the RCC represents the privileged interlocutor of the EU, appointedtorepresentregionalcooperationintheregion,ithastodevelopasoundstrategyandplayaneffectiveroleincoordinatingregionaltablesandinitiatives, inordertoavoid lossofresourcesgeneratedbyoverlappingactivities.ThelinkbetweenregionalcooperationandtheEUshouldbetterfocussed on voicing regional demands, supported by scrupulous argumentsandanalysis,anddulyorganised inacomprehensiveagendaofprioritiesfortheregion.

Timehascome,fortheRCC,tooperate lessforexternalvisibility (par

ticipationatconferences,meetings,pressreleasesetc)andmoreoneffectiveness.

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Aparalleluniverseofregionalcooperation initiativesoperate intheregionand refusetobesubsumedundertheRCCcoordinating role:theRegionalCooperationCouncil hasnevertheless toensure thatduplication of

activities

and

consequent

loss

of

resources

is

avoided

and

should

find

new

tools for making an effective coordination strategy to operate53. Indeed,countries in the region cannot finance a plethora of regional forums andthere is a need of rationalisation of instruments of regional cooperationthatshouldaddressed.

Intimesofeconomicturmoil,whenreformstowardEUstandardsrisktoloosetheirprioritypositionswithinregionalgovernmentsagendas,worriedinsteadtomaintainsomesustainabilityfortheirfragileeconomies,coordinationamongcountries intheregionshouldremaincriticalforaddressing,

asasinglevoice, internationaldonorsand investors.Also in thiscase,theregionalcoordinatingagencythatistheRCCworkingasasinglemouthpiece of regional demands, has to improve its capabilities in coordinatingandprioritisingregionaldemands.Tosupporttheeconomicrecoveryoftheregion,andtorescuepreviouspathsofgrowth.ToconcretelysupporttheEUperspectiveoftheWesternBalkans.Tomakeregionalcooperationreallyregionalowned.Andtoescapefromitsbeinganexternallydrivenphenomena,likeitwasinthepastandlikesometimescontinuestoappear.

However, the stabilisation of the region will remain undone if Kosovoremainsexcludedfromtheregionalcooperationnetwork.InthissensetheRCCshouldadoptandpromotepragmatismamongallregionalpartners,inordertogranttheinclusionofKosovoinalltablesandinitiativesandthereforegrantingeffectivenesstotheregionalcooperationnets.

Kosovo authorities, too,shouldstickat their turn to pragmatism,continuingtoparticipate inregionalforumseven ifrepresentedbyUNMIK,tograntthatKosovowillcontinuetobeanchoredtoreformsandperspectivesofregionaldevelopment.

Bibliography

Institutionaldocuments

Assembly of Kosovo, Constitution of the Republic of Kosovo,

53 For instance,RCChassignedaMemorandumofUnderstandingwiththeCentralEuro

peanInitiative,butnoeffectivenesshasbeengiventopoliticaldeclarations



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32 Simona Mameli

Prishtina/Pritina,9thApril2008Assembly of Kosovo, Declaration of Kosovos Independence,Prishtina/Pritina,17thFebruary2008

CEIHeadsofGovernment,DecisionsonRepositioningoftheCEI,Sofia,27thNovember2007

Commission(DGEnlargement)nonpaper,MovingtowardsamoreefficientRegional Cooperation Council, Western Balkans Region, Meeting doc.168/2009,20.10.2009

Commission of the European Community, Communication from the

Commission to the European Parliament and the Council Kosovo FulfillingitsEuropeanPerspective,Brussels,14thOctober2009

CommissionoftheEuropeanCommunities,ConclusionsonKosovo (underUNSCR1244/99)(extractfromtheCommunicationfromtheCommissionto the Council and the European Parliament "Enlargement Strategy andMainChallenges20092010",COM(2009)533final)

EUPress Releases, European Commission proposes to renew autonomoustradepreferencesfortheWesternBalkans,Brussels,22February2010

European Commission, DirectorateGeneral for Economic and FinancialAffairs,CandidateandPreAccessionCountriesEconomicQuarterly,October2009

European Commission, DirectorateGeneral for Economic and FinancialAffairs, TheWesternBalkans in Transition, European Economy, Occasional

Papers46/May2009

EuropeanCommissionerOlliRehnsspeakingpointsatthesignatureoftheWesternBalkansInvestmentFramework,Brussels,9December2009

European Commissioner Olli Rehns foreword at the Conference "TheWestern Balkans: Overcoming the economic crisis from regionalcooperationtoEUmembership,Brussels,9December2009

www.pecob.eu


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StabilityPactforSouthEasternEurope/RegionalCooperationCouncil,JointDeclarationontheEstablishmentoftheRegionalCooperationCouncil (RCC),Sofia,27February2008,AnnexII,StatuteoftheRCC.

BooksandArticles

Erhard Busek, Bjrn Khne (Eds), From Stabilisation to Integration. TheStabilityPactforSouthEasternEurope,Ed.BhlauVerlag,Vienna,2010

LiliaCavallari,IlquadromacroeconomiconeiBalcaniOccidentalidieciannidopogliaccordidiDayton,inFrancescoGuida(acuradi),Daytondieciannidopo:guerraepacenellaexJugoslavia,Caroccied.,Roma,2007,pp.156157

Milica Delevi, Regional Cooperation in the Western Balkans, Institute forSecurityStudies,ChaillotPapern.104,July2007,Paris,2007

Diman Dimov, SEESAC The South East European Small ArmsClearinghouse, in Erhard Busek, Bjrn Khne (Eds), From Stabilisation toIntegration.TheStabilityPact forSouthEasternEurope,Ed.Bhlau Verlag,Vienna,2010,pp.199203

VladimirGligorov,SoutheastEurope:RegionalCooperationwithMultipleEquilibria, in Integrating the Balkans in the European Union: FunctionalBordersandSustainableSecurity(IBEUResearchProject),WorkingPapern.4.1.,2004

Duko Lopandi, Regional Initiatives in South Eastern Europe, EuropeanMovementinSerbia,Belgrade,2001

Edward D. Mansfield, Preferential Peace: Why Preferential TradingArrangements Inhibit Interstate Conflict, in Mansfield & Pollins (eds),Economicinterdependenceandinternationalconflict:Newperspectivesonanenduringdebate,MichiganStudies inInternationalPoliticalEconomy,2003,pp.22236;

EdwardD.Mansfield,Helen V. Milner,Thenewwave of regionalism, inInternationalOrganisation,Vol.53,No.3,Summer1999,pp.589627;



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34 Simona Mameli

Aleksandra Rakovi, eSEE a not so easy challenge for South EasternEurope, in Erhard Busek, Bjrn Khne (Eds), From Stabilisation toIntegration.TheStabilityPact forSouthEasternEurope, Ed.BhlauVerlag,

Vienna,

2010,

pp.

149

153;

William Wallace, The Sharing of Sovereignty: the European Paradox, inPoliticalStudies,XLVII,1999,pp.503521.

Websites

www.ec.europa.eu

www.rcc.int

www.ceinet.org

www.kushtetutakosoves.info

SimonaMameli

SimonaMameli isaJuniorResearcher for theWesternBalkans regionatthe Institute forCentralandEasternEuropeandtheBalkansandPhDcandidateattheFacultyofEconomicandSocialSciences,UniversityofBern,Switzerland.Hermainresearchinterestsfocusonpoliticalscienceand include:diversitymanagementanddeliberativeapproaches individedsocieties,minori

tiesissues,

regional

cooperation.

[email protected]

www.pecob.eu
http://www.ec.europa.eu/http://www.ec.europa.eu/http://www.rcc.int/http://www.rcc.int/http://www.ceinet.org/http://www.ceinet.org/http://www.kushtetutakosoves.info/http://www.kushtetutakosoves.info/http://www.kushtetutakosoves.info/http://www.ceinet.org/http://www.rcc.int/http://www.ec.europa.eu/


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