20/5/11

South-East Europe Outlook – Political context *

  
Παρασκευή, 20 Μαΐου 2011 10:04
I would like to begin by expressing my heartfelt consideration to the Chairman and the Vice-Chairman - General Director of the Institute for the invitation to address such a fine gathering at the presentation of the study on South East Europe Energy Outlook.
In the next few minutes, I will seek to present you with the political situation in the countries of S.E. Europe; the region known historically as the Balkan, until the beginning of the 1990’s decade and its semantic transformation. I should point out that this change in expression is not the product of a linguistic alteration, but rather stems from the deliberate desire to give the region a new political connotation. I am certain that we can all recollect the problems that have arisen in this area and which are basically the by-product of five centuries of occupation of the Balkan countries by the Ottoman Empire, which, sadly, provided nothing but grief. During the last century, the recent developments in the European sphere, from the 50’s onwards, with the creation of the European Communities and further on the Union, and the subsequent enlargement to the East, have changed the outlook of the countries concerned, by providing them with possibilities of harmonising towards the European standards of governance which will guide them, slowly but surely, away from “Balkanised” – if you allow the use of this neologism- political customs and practices. In stark contrast with Greece, the remaining former Balkan states were, until recently, under a governance regime based on Communism, and had therefore a different set of values from the European countries, in terms of culture, social texture, financial development and political structure. Turkey, on the other hand, had a succession of military and political regimes with a determinative, until recently, presence of the Army in the political, financial and social sphere.
It is therefore important to underline that the political, economic and social situation of a country is of paramount importance not only for the local population but also for foreigners who intend to establish themselves or to invest in the country. In an era of global challenges and opportunities the need of a thorough knowledge of the elements that influence the stability of a country plays a crucial role especially in a sector as important as energy.
The South East Europe region has evolved into a primary responsibility issue for the European Union and this increased involvement is understood as a target to achieve not only stability and security in the courtyard of Europe but also to achieve structural reforms to the economic, political and social sectors.
The South East Europe region contains two categories of states. Those that are members of E.U (Greece, Bulgaria, Romania, Slovenia, Cyprus) and those that are candidates or aspirants to the E.U accession. For the latter, a road map towards their eventual accession to the E.U has been established during the 2003 E.U summit in Thessaloniki. Since then, Croatia is on the final track for entry whilst FYROM and Montenegro have achieved candidate status. Stabilization and Association Agreements have been arranged with all the other states except Kosovo. Despite the policy of enlargement and the results that have been achieved till now, there are, nonetheless, concerns about unresolved problems and potential new instabilities in the region.
In Bosnia-Herzegovina, for instance, there is a lack of shared vision by political leaders on the direction of the country which blocks key reforms and further progress towards the E.U and NATO and may lead to a state fracture. To face the latter, a new post-Dayton agreement on constitutional and structural reforms has been proposed by the international community to strengthen the central government but it is opposed by the leadership of the Bosnian Serbs, who refuse to concede more powers to the central government in Sarajevo. Furthermore there are voices in the Bosnian Croat side for the separation from the federation with the Muslims and their recognition as a third entity, thus creating a more perplex problem for the viability of the unity of the country. On the economic field, there is still not a single economic space and a functioning market economy. The privatization and restructuring of the public enterprises and the liberalization of network industries has not advanced. Unemployment is very high especially in the Muslim area where the digits are the double of the ones in the Serbian region. Furthermore there are serious problems in the free movement of goods, persons, services, customs and taxation, energy etc.
Last but not least and despite that the Bosnian Muslim population practice a moderate form of Islam, members of the Islamic Wahhabi movement have obtained the Bosnian nationality and established themselves in the Muslim area, as well as approximately three thousand Islamic extremists who control a number of villages.
As far as Kosovo is concerned, its international and domestic problems remain a source of concern for the international community. The domestic problems refer to the eventuality of partition of the northern part and its integration-annexation to the Serbian territory under the Serbian government control. It has to be mentioned that if this scenario is fulfilled then the same developments may occur to other compact minority areas of the broader region including the Bosnian Serbs, the Albanian areas of southern Serbia and north-western FYROM , the Muslims of south-western Serbia and northern Montenegro and furthermore the Hungarian minority in Vojvodina. The international recognition of the state of Kosovo is making very slow progress and the number of countries recognizing its statehood has peaked at 70. This fact may create serious problems because it can lead to public unrest and internal conflicts that could be exploited by extremists. The economic situation is bad. Kosovo is the poorest country in Europe with high unemployment. Doing business is difficult due to the bureaucratic, political and at times corrupt administration. The judiciary is highly politicised and organized crime, bribery, extortion and human trafficking are flourishing.
Moving now to the Former Yugoslav Republic of Macedonia, the country is facing major internal problems due to the nationalistic policy that the current government is following and which alienate the large Albanian population from the Slavic majority. The unresolved dispute with Greece over the name and the newly adopted strategy of tracing the origins of the Slavs to ancient Macedonia has caused on the one hand an interslavic problem creating a doubt in the Slavic population about their real ethnic origin and on the other hand a wider gap in the rapprochement between Athens and Skopje. The name issue is used by the Albanians for their purposes to put a pressure on the government and the international community claiming that the lack of progress on this issue may precipitate the collapse of the bi-ethnic coalition government because it is an impediment to their ambition to join E.U and NATO.
Twenty-one years after the demise of Communism, Albania finds itself in the midst of complicated problems despite having undergone radical political, economic and social changes. The quality of democracy is low and is undermined by the fierce competition between the country’s two largest political parties and the lack of a common approach to find a solution to the main challenges facing their country. Corruption among public officials remains very high and the economic situation is bad. It ranks among the poorest countries of the region and its unemployment remains high.
Croatia throughout the last two decades had the backing of the West which supported its independence and its political and economic transition. Despite the difficult internal political situation in the 1990s and ideological divisions, the commitment by the majority of the politicians to pursue Euro-Atlantic integration has been fulfilled. Croatia became a NATO member in 2009 and it is expected to become the 28th E.U member in 2012. The prospects for the economy remain strong, with tourism and energy as the two main growth pillars.
Montenegro became an independent state in June 2006 and applied for EU membership in 2008. The most recent progress report of the E. Commission was generally positive about the efforts to establish an institutional structure capable of serving the newly established state. Therefore, the status of candidate state was attributed to Montenegro on 17 December 2010. Podgorica has taken important steps towards establishing a functioning market economy, implementing economic reforms, despite significant internal and external imbalances with growing account deficits and there is a need to create a civil service and a judiciary free of political interference. It is remarkable that for the last 15 years a single party has remained in power and has undertaken all structural changes. It is the first country which has been subject to NATO military action to seek membership in this organization. Its relations with the neighbouring countries are positive even with Serbia with which they cooperate in many important fields such as economy, defence and judiciary despite the recognition of Kosovo by Podgorica. Montenegro is moving to the creation of its national identity, new alphabet and new language which will be different from the Serbian one.
Serbia was considered as a factor of instability in the Balkans and in general in South East Europe. Over the last few years Belgrade has emerged as a key player of stability and this in turn has fuelled hopes for the European future of the country despite that there are two issues pending, the recognition of Kosovo and the cooperation with ICTY. With respect to the current Serbian government and while its democratic credentials are highlighted it has to be noted that it has passed a repressive law on media, the appointment of judges is politicized and like all its predecessors, has generated scandals of corruption and incompetence. Serbia is a potential candidate country for EU accession. In 2008 Serbia signed the Stabilization and Association Agreement with the E.U and in 2009 submitted its application for EU membership and the same year got the visa liberalization to the Schengen area. On 25 October 2010 the G.A. Council forwarded the application to the Commission which will prepare its opinion. Among the numerous priorities that the Council decision of 2008 has define and Serbia has to fulfil, I underline the need to cooperate constructively on matters relating to Kosovo. Serbia’s trade exchange with the E.U is high, reaching 55% of its economy.
Turkey, due to its population, which is the second higher in Europe, its historical background and its size and geographic location plays an important role in the area of South East Europe. The country has developed, during the last few years, a new dogma of foreign policy based on Ottoman expansion. There is a deliberate attempt on behalf of Turkey to establish a sphere of influence over the former holdings of the Ottoman Empire by developing financial, political and religious ties. Its financial stability allows it to spend a considerable amount of money on this new dogma, however the results are not necessarily viable. Indeed, Turkey, as an occupying force for more than five centuries has left a stigma on the area which the countries of South East Europe and Middle East are bound not to forget. Further, the latest developments in North Africa and the Middle East create the need for new strategic targets which are not aligned with those of Turkish foreign policy. What more, the solution to the Kurdish question, which is a peripheral issue in general, but mainly Turkish in nature, could become the dynamite to its internal cohesion. As for the European outlook of Turkey, here again, opinions are divided. On the one hand it is needed for the further institutional democratization of Turkey, and the alignment with European ideals; on the other hand the entry into the European family endangers the already fragile balance and might ring the end of the Union’s cohesion. One needs only to look at the aggressive stance of Turkey in NATO to draw the necessary conclusions.
I hope to have given you a bird’s eye view of the developments in the South East Europe region. My personal belief is that, although some countries have made steady progress in bringing their institutional setting at par with what we, in the European Union, are accustomed to, there is still substantial ground to be covered.
I am, nonetheless, confident that the coming decade will be one of change, with positive consequences for the region.
Thank you very much for your attention
*Speech delivered during the IENE (Institute of Energy for S. E. Europe) study presentation on their study project: South East Europe Energy Outlook.

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