European Western Balkans

[EWB interview] Reljić: There is no political progress in the region without the economic growth

Dušan Reljić; Photo: Center for Foreign Policy

Interview with Dušan Reljić, Head of Brussels Office, German Institute for International and Security Affairs (SWP). The interview was conducted on the sidelines of the conference “EU Strategy for Successful Accession of Western Balkans and EU Neighbours – Case of Romania”, which was organised by the Center for Foreign Policy and Hanns Seidel Foundation, and took place in Belgrade on Wednesday, 7 February.

European Western Balkans: Serbia and Montenegro are the only Western Balkan countries to receive a clear timeframe on the possible accession to the European Union by 2025, whereas this was omitted in case of other countries in the region. Do you think that the timeframe foreseen by the Strategy in line with the capacities and capabilities of Serbia and Montenegro?

Dušan Reljić: No one can tell you that with certainty, because there are many factors that even the most effective government can not find a solution for. In particular, I am talking about the fact that economic development in all the countries of the region is largely linked, on the one hand, to the situation in the European Union, and on the other hand, it is dependent on the state of interest rates in world markets and on the cost of energy.

Over the past several years, the energy prices were relatively low, interest rates were around zero. If it really does happen, as it now appears, that the price of energy is rising again, that the interest is increasing, the countries of the region will not have much money to invest. Without investments, these candidates and potential candidates are facing economic turmoil and a downturn. Serbia, Bosnia and Herzegovina and Macedonia have not yet reached the domestic product they had in 1989, and the assumption for every social transformation is that society is richer. Only in a richer society there can be a single pressure from below, from a society to power structures, demanding the acceleration of the changes, the rule of law, etc. If there is less money for redistribution, we are faced with a stronger role of the state and of the government, and therefore the space for democracy lessens. Therefore, on the one hand, global economic trends have a significant impact on such sensitive economies in the region that are exposed to external changes to such extent.

On the other hand, in the whole region, those forces that were already in power in the 1990s when the war broke out, with the exception of Macedonia, are again in power. These forces have with the time learned a kind of mimicry. This mimicry consists in the fact that, in relation to external factors, that is, towards the government in Berlin or towards the European Union, they have developed one kind of discourse, whereas they retain behavior that resembles a great deal of what has already been seen in this area in the 1990s for internal needs – little respect for the rule of law, the suppression of democratic procedures and institutions, parliaments throughout the region shrink, lack of media freedom, concentration of enormous power among individuals, etc. It is no coincidence that the new Enlargement Strategy says, already on the first page, that the link between state and public structures with organised crime at all levels of government is noticeable throughout the region. This is a devastating conclusion.

EWB: The EU seems to have assumed a tougher stance when it comes to the requirements pertinent to the rule of law, as outlined in the Strategy. Shall we expect the EU to be a hardliner with regard to the issues concerning the rule of law, judiciary, corruption, etc. and to use the ¨carrot and stick¨  approach more frequently to induce prompter reforms?

DR: I think that this policy has been heavily exhausted, because the European Union itself, in addition to its reports and the public addresses, has no power to reverse the course. The real strengthening of the rule of law, democratic institutions and everything else can come only if the society in Serbia and Montenegro is stronger, and the society is stronger if it is socially, economically and financially independent, if it does not depend on the state, if the economy is free, if universities are not under state bonds, if society does not depend on foreign countries to help domestic NGOs, etc.

Only the richer society is potentially more democratic and vice versa. This is a key issue for me. As long as there is no economic growth in the region, as long as people do not feel better, there will be no political progress and the European Union will not be able to influence someone to a larger extent.

EWB: In addition to this, the economic integration of the Western Balkans is equally important, because one always follows the other, and it seems that this is somehow always neglected. You have mentioned that the economies of the Western Balkans should have an annual growth of at least 6% to reach the average level of the EU by 2030. Commission has, in addition, devoted a part of the Strategy to the economic strengthening of the region and envisaged certain activities. How can the EU accelerate socio-economic convergence of the region with the EU?

DR: I have referred to the World Bank data here. There are two sets of data. One is that if growth in the region happens to be on average 6% by 2030, the EU-27 average could be reached.

If the growth remains at the present 2-3%, this may be possible in 60 years, which means that people will spend incomparably more time in poverty than, for example, socialist Yugoslavia existed in this area. The fall of socialist Yugoslavia, on the one hand, was a disaster, and on the other, for many people, the arrival of the market economy and the opening towards the EU have given hope that transformation and improvements in their life would come. This did not happen, and for this, of course, the authorities are deemed responsible, for not pursuing appropriate policies, yet the economic relations established with the EU, with the largest states such as Germany, Italy and others, are also partly responsible for such an outcome.

What should the governments do, what could the EU do? For a long time, along with many colleagues from various European institutes and think tanks, we have organised an annual Balkan Reflection Forum, usually two or three weeks ahead of the annual meeting of Heads of State and Government in the Berlin Process. We have talked for about four or five years and we have come to one common thesis – that the six SEE economies that want to join the European Union cannot pull out of the historical backlog using their own forces and that, therefore, the EU, if it really wants to empower them to become members, has to offer development capital and development assistance. Development assistance could come from EU structural funds.

Croatia will, for instance, receive in the next three years about 12 billion euros from EU structural funds. This money, along with tourism and relatively cheap energy and interest rates, is exactly what has enabled Croatia to regain economic growth after more than ten years of economic decline. About 60% of the investments in Bulgaria has been drawn from EU structural funds. Serbia and other countries of the region are not authorized under EU law to receive money from structural funds. However, owing to close links with the European Union, the countries of the region have recorded a trade deficit of 97 billion euros from the EU over the past ten years. If you add loan interest, there has been a transfer of more than 100 billion euros from these six poor economies to Germany, Italy and other countries. Such disproportion is not a problem for countries like Poland or the Czech Republic that have access to structural funds, but for countries that do not have such remuneration, this is a huge obstacle to further development. Therefore, the European Union should help these countries through free development capital, and this is the most urgent requirement.

The second requirement is sectoral development, so that the countries are involved in as many areas and policies of the EU, such as migration, justice and home affairs, science and development, Erasmus programs, everything that already exists, but should be incomparably more developed. And, most importantly, circular migration. Now, if someone decides to go and live in Germany, it is a life-long decision, they will probably never come back. Circular migration, however, allows you to work in the EU if there is a demand, you are not faced with huge bureaucratic obstacles, but also to return to the country of origin if new entrepreneurial or career opportunities are opened. This is what can significantly stimulate entrepreneurship and growth.

EWB: Due to the weak economy, but also the unsatisfactory political and security framework, less support for the EU among the population in the countries of the region is not surprising, however, it also varies depending on the country. For example, in Serbia (according to the survey conducted by Regional Cooperation Council), only 18% of respondents believe that Serbia will enter the EU by 2025, despite positive indications from Brussels, while 38% think it will never join. On the other hand, in Albania and Kosovo, only 6% of the population think they will never join the EU. How do you explain this and how do you see the development of the trend in the further course of negotiations, especially when Serbia is concerned, as a country with the lowest percentage of support?

DR: The less people know about it and the less they are faced with specific problems, the more different is the perspective itself.

Let’s not forget, Albania is the only economy in South East Europe that has achieved such an economic growth over the past twenty years. People are richer there than they were when the system collapsed, while Serbia, Bosnia and Herzegovina and Macedonia are poorer than they were. That is why in Albania there is additional sympathy for the EU.

Experience has so far shown that when people feel a certain profit, say, visa abolition, support for the EU grows. I believe that after the publication of this strategy, which the Government of Serbia, to a large extent, attributes to itself as a merit and reward, through means of information, especially those favourable to the government, the majority of the population gets the impression that this is progress and, therefore, the support for the integration will again increase. But these are the conjunctural things. What determines the interest of every person for politics, foreign policy, and even for the EU, is “how my life is changing through all that”. I think that there is a lot of frustration among people because they have been told for about twenty years “only when we enter the EU, we will be better off”. And this is not the case, nor can this way of economic exchange with the centres in the European Union really produce a boost.

EWB: Bulgaria had revealed its ambition to focus its EU presidency to the Western Balkans and its integration into the EU months before assuming the Presidency of the Council of the EU. What do you expect from Bulgaria’s efforts to promote the EU enlargement in the Western Balkans and what is to be expected at the EU-WB conference in May in Sofia?

DR: A lot of diplomatic papers. It is quite right that Bulgaria, Austria and other countries have a positive attitude, and that is very much supportive, but power is also unevenly distributed in the European Union.

For the last 20-25 years, the essential country for EU enlargement has been Germany, because of its position in the Union, its strong economic ties with the countries of the former Yugoslavia and, lastly, because of a certain orientation of the entire region to Berlin. It is nice that Bulgaria supports the Western Balkans, but we have to wait and see the composition of the new government in Berlin, and we must see the mood in the German parliament, which according to the amended laws plays a significant role in the enlargement policy.

Publication of this article has been supported by the Balkan Trust for Democracy of the German Marshall Fund of the United States

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