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Balkans: On different roads to EU

IPS - 31 January 2006

On Different Roads to EU

Vesna Peric Zimonjic

BELGRADE, Jan 31 (IPS) - All Balkans countries are headed for European Union membership, but they are taking different roads, and at differing pace.

European Union (EU) foreign ministers have said a regional free trade agreement is the way forward for all the countries. Not everyone agrees with the ministers.

For some, particularly Croatia, a regional free trade agreement has come to mean also a revival of the spectre of the Yugoslavia that splintered into independent countries — Bosnia-Herzegovina, Croatia, Macedonia, Serbia and Montenegro, and Slovenia. Slovenia became a full EU member in May 2004.

Croatia has completed Stabilisation and Association Agreement (SAA) talks with the EU and is on course for full membership by the end of the decade. Bosnia-Herzegovina began talks with the EU this month. Albania, Macedonia and Serbia and Montenegro have also begun the SAA talks, but are not provisioned for membership for another ten years.

SAA talks are aimed at bringing all legal, trade and institutional instruments in line with EU regulations. They usually last years but once complete lead to full EU membership.

Foreign ministers of the 25-member European Union (EU) approved Monday the proposal of the European Commission (EC) for establishment of a regional free trade agreement in the Western Balkans (Albania, Croatia, Bosnia-Herzegovina, Macedonia and Serbia and Montenegro). The document was proposed Friday by the European Commission, the executive arm of the EU.

The Commission document says such an agreement will build ties among the five nations and "help the countries to realise their European perspective." The Western Balkans region has a population of some 24 million.

Full EU membership is top political priority for all five countries. But the years of war among them in the 90s, except Albania left a prevailing chasm of mistrust.

"We need to encourage the people of the Western Balkans to look forward to their European future, not back to the nationalism of the past," EU Enlargement Commissioner Olli Rehn said Friday. "The best way to do that is to focus on practical measures which will integrate their economies and societies into the European mainstream."

Croatia did not welcome the suggestion. "In no way this means the creation of New Yugoslavia," Prime Minister Ivo Sanader said at an urgent press conference over the weekend.

"There is no chance that anyone in any way, within European structures, tries to create something like Yugoslavia or anything like it," Sanader said. He rejected the idea of an accompanying customs union among the nations in the region.

Sanader proposed instead the revival of the Central European Free Trade Agreement (CEFTA) created to promote trade between Central European countries. This agreement became inoperative after most of the member countries became full EU members last year.

CEFTA was originally created for the emerging economies of Central Europe in 1993. It covered Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania, Slovakia and Slovenia.

With the EU enlargement in 2004, when the Czech Republic, Hungary, Poland, Slovakia and Slovenia became full EU members, only Bulgaria, Romania and Croatia remained within CEFTA.

Yugoslavia disintegrated in the bloody war of the 90s, fought between Serbia, Croatia and Bosnia. The reconciliation process and normalisation of relations have been slow despite the fact that the wars ended more than 10 years ago.

But economic realities more than the past stand in the way of a trade agreement. Croatia, with a population of 4.4 million and a per capita gross domestic product (GDP) of 7,000 dollars, is placed far above the others.

Bosnia-Herzegovina with a population of 3.8 million has a per capita GDP of 2,000 dollars. Macedonia has a GDP of 2,200 dollars, Albania 2,500 dollars and Serbia and Montenegro 2,600 dollars.

A regional free trade agreement "is unacceptable from the economic point of view, as Croatia is far above the rest of the region," former Croatian economy minister Ljubo Jurcic told local media.

But other countries welcomed the idea. "A regional free trade agreement would enable products to reach EU markets swiftly, and Serbia has a lot of goods to offer, particularly in agriculture," president of the Serbian Chamber of Commerce Slobodan Milosavljevic told local media.

"Apart from that, the regulation synchronised with the EU would mean putting aside some 30 laws that stand in the way of smoother exports and cooperation," he added.

Head of the Serbia and Montenegro EU Association Office in Belgrade Jela Bacevic told IPS that such an agreement would bring improved investments in the region.

"The EU investors could plan where to move the production in any of those countries, be it Serbia, Bosnia or Macedonia, with clear laws in tune with the EU, calculated costs and profits," she said. "That would be an important step forward for the region."

 source: IPS