Schreyer plans cash windfall for post-Milosevic Serbia

Date: 04/05/2000

By Simon Taylor

THE European Commission is planning to set aside nearly half the EU's €5.5-billion Balkans aid budget for Serbia, to be handed over if and when opposition forces in Belgrade topple President Slobodan Milosevic.

Budget Commissioner Michaele Schreyer and her external relations counterpart Chris Patten will argue that the money should be allocated to the country now, instead of waiting until Milosevic has lost power, to avoid the risk of a lengthy budget battle with Union governments when the extra funds are needed urgently.

"I have insisted on a realistic figure in our budgeting for reconstruction in Serbia because I do not want to find myself in two or three years having to find additional costs for Serbia out of the same budget," said Patten recently.

Schreyer will set out the case for allocating €2.3 billion to Serbia next week when she unveils a new single programme, to be known as CARDS, setting out how the Commission plans to spend the money earmarked for the region between now and 2006.

Until Milosevic has been deposed and the EU is able to deal directly with the central government in Belgrade, cooperation will continue to be limited to links with opposition forces in local administrations and the media and academia. The small amount of funding to be released immediately will be channelled through town-twinning initiatives such as the forthcoming Education for Democracy programme, which aims to provide Serbian schools with equipment and teaching materials.

The Commission is planning to dedicate €1 billion of the remaining €3.2 billion in the CARDS programme to Kosovo. The rest will be shared between the other Balkan countries eligible for the Union's Stability and Association Agreement (SAA) process - Albania, Croatia, Monte-negro, Bosnia-Herzegovina and the Former Yugoslavian Republic of Macedonia - depending on their aid requirements in a particular year. The SAA scheme is designed to boost economic and political relations between the EU and countries of the region.

The CARDS programme will replace the existing OBNOVA and PHARE schemes which have provided more than €4.5 billion in financial assistance for Balkan states over the past ten years.

After a debate on Schreyer's proposals for the Union's budget this week, the full Commission approved her plans to provide extra funding for reconstruction projects in Kosovo for the next two years, mainly by shaving €300 million off farm spending.

Despite objections to the move from French President Jacques Chirac, Commission officials said they expected EU finance ministers to support the proposals when they hold their first discussions on the budget next Monday (8 May). "If you tell finance ministers you can find the extra funding for Kosovo without needing fresh money, they will tend to go for it," said one.

The European Commission is planning to set aside nearly half the EU's €5.5 billion Balkans aid budget for Serbia, to be handed over if and when opposition forces in Belgrade topple President Slobodan Milosevic.