Slow rate of Balkan political reform hampers EU aid

By David Cronin

Date: 30/10/03

THE sluggish pace of political reform in the Balkans is hampering the implementation of key EU-funded projects, according to the director of the European Agency for Reconstruction (EAR).

Richard Zink identified the frequent personnel changes in Serbia's health and energy ministries as major headaches. Both departments are waiting to have their third new minister appointed in as many years.

Some €351 million has been earmarked for Serbia's energy sector as part of the EAR's budget for 2000-2003. However, it has been unable to realize one of its primary ambitions - the forming of a new energy regulatory authority for the country - as the parliament in Belgrade has stalled on passing the necessary legislation.

Based in the Greek city of Thessaloniki, the EAR was founded following NATO's military onslaught against Slobodan Milosevic in 1999. Working in Serbia, Kosovo, Montenegro and Macedonia, it is alone among the EU's 15 agencies in being dedicated to foreign aid.

However, its operating mandate is due to expire at the end of 2004.

Zink admitted that uncertainty about whether this will be extended has meant that the agency has lost a handful of its 280-strong staff.

“We have had a few people looking for a longer-term perspective,”.Zink added. “A few people have left us to join the [European] Commission but they might have left anyhow.

“A few have gone to work as consultants elsewhere. I don't want to dramatize it.”

To date, the EAR has overseen the expenditure of some €1.3 billion.

Any extension of its mandate will require the backing of both the member state governments and the European Parliament. Zink said he hopes the results of an evaluation of its activities due to be undertaken by the Commission will “speak for itself”.about the role it has played in underpinning peace in a volatile region.

He singled out Kosovo as the “largest risk”.for the success of its work.

EU aid for the province, now a UN protectorate, came to €580 million in 2000-2001, but has shrunk to €50 million for this year. With unemployment at 60% and ethnic tension still rife, Zink said the situation will remain critical in Kosovo until vast sums are provided by international financial institutions such as the World Bank, European Investment Bank and European Bank for Reconstruction and Development.

To date, the finance has not been forthcoming, to a large extent because the question of Kosovo's final status is unresolved. Zink said, however, that the Commission is in talks with these institutions with a view to having finance released.

Meanwhile, Italy's EU presidency has recommended that a “permanent financing mechanism”.should be established from March 2004 to take responsibility for bankrolling the Union's military missions.

This follows the presidency's appraisal of Operation Concordia in Macedonia, the first-ever military intervention undertaken by the Union.

The Italians have concluded that the provisions made for funding the operation were “woefully inadequate”.

When the mission was officially launched on 31 March, only €297,000 had been paid into its bank account by member states, while no payments were received from non-EU countries participating in Concordia until mid-July.

When a call for contributions to the operation was made on 19 February, the overall sum sought was 10% of the original budget forecast of €4.7 million. Italy suggests this was far too small and recommends that 30% of the so-called reference amount should be requested in the initial call for contributions for future missions.

Richard Zink, Director of the European Agency for Reconstruction (EAR) says that the slow pace of political reform in the Balkans is impeding the implementation of European Union-funded projects. Frequent personnel changes in Serbia's Health and Energy Ministries have been a particular problem.

http://ear.europa.eu/ http://ear.europa.eu/

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