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EU Assesses Western Balkans

02 11 2007  Despite some economic progress, the European Union says corruption, organised crime and ethnic tensions are continuing to obstruct progress in the Western Balkans.

By Gjeraqina Tuhina in Brussels

Balkan Insight has obtained an advance copy of the European Commission’s annual progress report, due to be issued on November 6, on the countries that seek to join it. Below we carry a country-by-country summary of the report for the Western Balkans.


ALBANIA

While Albania is recognized as a country that continuously played the constructive role in regional stability, European Commission considered that political system lack on improvements because of democratic culture that dominates in Albania.

“Political parties’ lack of will to cooperate continued to hold back reforms, particularly in the electoral and judicial field”, says this year’s progress report. It notes that judicial reforms have made very limited progress during the year, and the judiciary’s functioning has been of a poor standard because of “corruption and shortfalls in independence, transparency and efficiency”.

The fight against corruption and organized crime is acknowledged by the Commission to have been in the focus of the Albanian leadership’s endeavours. However, it is considered that corruption remains widespread in the country.

While police response to serious crimes has improved, “efforts against organized crime remain hampered by corruption and a weak witness protections program”.

The report acknowledges that Tirana has continued to investigate and prosecute trafficking in human beings vigorously, and that border controls have been strengthened, however Albania remains a “significant transit country of human beings”.

Civil society in Albania is describes as weak. Its representatives, the report says, are not sufficiently involved in policymaking, and they lack resources, organizational capacity, advocacy skills and regional links.

Regarding regional issues and international obligations, it is said that Albania is continuing to foster good relations with other western Balkans and neighbouring EU countries.

Tirana is praised for its constructive approach towards the negotiations to determine Kosovo’s long-term process. “This has contributed to stability in the region”, the report says.

Albania’s economy has been growing fast, and the Commission considers that macroeconomic stability has been maintained even while the external deficit has further widened, due to the crisis in energy sector.

However, the rule of law is seen as influencing Albania’s economic development. “Inadequate implementation of the rule of law continues to impede the smooth functioning of the market economy and affects the business climate”, progress report concludes.


BOSNIA AND HERZEGOVINA

The Commission says that Bosnia and Herzegovina has been lagging behind in the reform agenda. This is blamed, in part, on “complex institutional arrangements, disregard of Dayton agreement and nationalist rhetoric”.

Limited capacity has been recorded in democracy and the rule of law, and politicians Sarajevo and Banja Luka, the capitals of Bosnia’s two autonomous entities, are criticized for not demonstrating a willingness to take further political ownership and responsibility.

“Urgent measures are needed to ensure effective functioning of state level institutions”, report says.

In addition, Commission says it is not aware of any progress in improving coordination between the central state and its two entities, the Bosnian Serbs’ Republika Srpska and the Federation that brings together mostly Bosniaks (Muslims) and Croats.

“Overall performance of executive and legislative institutions has remained poor. Discussions on constitutional reform have stalled”, the report notes.

Bosnia has made little progress in the fight against corruption, “which remains widespread and constitutes a serious problem”. The Commission considers that more determined action is needed, and notes that the National Anti-Corruption Strategy has not been implemented properly.

As in all western Balkans countries, the inadequacies in the fight against organized crime and corruption remain a cause for concern in Bosnia. “The legal framework to fight organized crime is in place but law implementation needs to be improved”, says the report.

While it is recognized that Bosnia has made strides in reducing its dependence on the international community through the replacement of international judges and prosecutors by local ones, the report notes that “fragmentation of the judicial system and disparities in the legal framework continue to hamper the operation the judiciary”.

Human rights and the protection of minorities remain problem areas, due, in part, to religious intolerance. “Further efforts are necessary to combat intolerance and ethnic discrimination”, the report says.

The report points out that cooperation with the International Criminal Tribunal for the former Yugoslavia, ICTY, has improved and that it “is now at a generally satisfactory level”. However, it recalls that full cooperation with the ICTY is a precondition for signing a Stabilization and Association Agreement as part of Bosnia’s integration with the EU, and meet key European Partnership priorities.

The report says that Bosnia has made little progress in establishing a functioning market economy. The economy itself has expanded rapidly, and overall macroeconomic stability has been maintained, but there are still threats to fiscal sustainability.

“The persistence of very high unemployment remains a major cause of concern”, the report says.

The slow-down in reforms is seen as the result of an unfavourable political climate and weak domestic consensus on the fundamentals of economic policy.


CROATIA

Croatia as a candidate country engaged in accession talks with Brussels is generally viewed as maintaining its good track record on strengthening democracy and rule of law, as well as meeting the political criteria of membership.

“However there is considerable scope for further improvement in the judiciary, in public administration and in the fight against corruption”, the report says.

Zagreb has made limited progress in reforming public administration, while the system remains inefficient.

“The civil service continues to suffer from high staff turnover and a lack of qualified personnel as well as undue political influence at all levels. Further sustained efforts are needed”, the report says.

Although Croatia has introduced some legal reforms, the Commission says that “little progress has been made with regard to improving the accountability, impartiality, professionalism and competence in judiciary”.

Implementing the rationalization of court network has also been slow, while war crimes proceedings need further improvement. “Bias against Serb defendants still needs to be fully addressed, as does witness protection”.

In contrast to several other western Balkans countries, Croatia has notched up some successes in the fight against corruption, but the problem remains widespread and the Commission considers that there is a need for greater efforts to prevent, detect and prosecute graft.

“No indictment or verdict has been issued in any high-level corruption case”, the report says, adding that the concept of a conflict of interests is little understood in Croatia.

The position of minorities poses a serious problem for Zagreb. “Croatia needs to encourage a spirit of tolerance towards the Serb minority and take appropriate measures to protect those who may still be subject to threats or acts of discrimination, hostility, or violence”.

The report observes that while the Serb minority faces particular difficulties in employment, the Roma have to contend with difficult living conditions and widespread discrimination.

While Croatia has continued with full cooperation with The Hague Tribunal, Zagreb is criticized for its attitude towards some important aspects of ICTY indictments against Croatian citizens.

The report also argued that the negative thrust of the public debate on the role of the ICTY affects the ability to impartially prosecute war crimes at home.

Concerning regional issues, the report concludes that Croatia has made little progress in finding definitive solutions to various pending bilateral issues with its neighbours, particularly as regards the demarcation of borders which has affected relations with Slovenia.

Croatia’s economy has registered strong and accelerating growth, and the country is praised for maintaining macroeconomic stability, including low inflation.

Croatia is considered to be a functioning market economy. But the report warns that external imbalances may affect macroeconomic stability.

“Croatia has improved its ability to take on the obligations of membership. Preparations for meeting EU requirements are moving forward at a steady pace and alignment with EU rules is high in some sectors”, the report concludes.


MACEDONIA

Frequent tensions and problems in achieving constructive dialogue between major political actors undermined the effective functioning of political institutions and led to a slowdown of reforms in Macedonia, according to the European Commission’s assessment of this EU candidate which has yet to start accession talks with Brussels.

The report says that the absence of communication between key leaders in the country and the behaviour of the opposition have had a negative influence on the work of political institutions.

“The boycott of parliament by one of the major opposition parties as well as the poor quality of cooperation between the president and the prime minister hindered the effective functioning of the political institutions”, the report says.

The Commission notes that the fight against graft in the country has yielded some results, but recalls that “corruption is widespread and constitutes a very serious problem”.


The coordination of activities among the different institutions in the fight against organized crime is assessed as uneven.

The report notes that while large quantities of drugs have been seized, insufficient progress has been made in the area of tackling human trafficking.

The political deadlock in Macedonia has been affecting the proper functioning of the judicial system.

“The political deadlock over remaining appointments to the judicial council has reduced capacity to strengthen the independence of impartiality of the judiciary”, report says and evaluates that this has also delayed key aspects of the reforms such as setting up the administrative court.

Further engagement is required to ensure full independence, efficiency, and accountability of judiciary.

The report on Macedonia notes that the country has made some progress in political criteria, while implementation of the 2001 Ohrid Agreement, which brought an end to a six-month conflict between ethnic Albanian guerrillas and the security forces, continues to contribute to the consolidation of democracy and the rule of law.

“Further efforts are needed to fully implement the agreement and to consolidate confidence between the political parties, representing the different ethnic communities”, the report says.

Human rights and the protection of minorities, including inter-ethnic relations, have improved in Macedonia, according to the document, which calls all the parties to further develop trust between ethnic communities.

It is said that Macedonia has maintained full cooperation with The Hague Tribunal, and Skopje is also praised for its constructive position towards the Kosovo status process.

The report notes that Macedonia has been fostering good relations with the other countries of the western Balkans.

It is said that the country has been gradually implementing administrative reform, while it is confirmed that the second phase which relates to fiscal decentralization, has begun.

“Public administration remains weak and inefficient, and civil service legislation is little used”, the report says.

The economy in Macedonia has registered a markedly accelerated growth, and the Commission’s assessment is that macroeconomic stability has been maintained as structural reforms have made further progress.

“But, the persistence of very high unemployment remains major cause of concern”, the report says.

It acknowledges that Skopje has made further efforts to improve its ability to assume the obligations of membership. However, it says that Macedonia still faces major shortcomings in implementing and effectively enforcing legislation.

“Adequate human and financial resources to fully implement the SAA are lacking. Large scale replacement of qualified staff following political changes hampered efforts to improve administrative capacity”, the report notes.

The report concludes that Macedonia cannot, as yet, participate fully in the EU policies because its institutional and administrative capacity is insufficient for that.


MONTENEGRO

The Commission expects Montenegro to produce significant results in relation to improving administrative capacity and tackling corruption.

As the newest state in the region, Montenegro is praised for making good progress in establishing the necessary legal framework and institutions following its declaration of independence in June 2006.

“The parliament and government adapted to the requirements of independence. They continued improving their efficiency”, the report says.

Nevertheless, the Commission considers that the capacity of parliament needs to be improved.

The report recognizes the government’s attempts at reorganization as strengthening the new institutions, with a focus on defence reform, foreign affairs as well as and justice and home affairs.

“However, the government’s efficiency, in particular as regards implementation of legislation, needs to be further enhanced”, report notes.

As elsewhere in the region, corruption in Montenegro remains widespread and represents a serious problem.

“The founding of political parties and election campaigns lacks transparency”, the report notes.

Significant risk of corruption has been noted also in areas of construction and land use planning, privatization, concessions and public procurement.

Public administration in Montenegro is considered as weak and inefficient. The Commission requires further efforts in ensuring the impartiality of public administration and the strengthening of its capacity, including the training of personnel.

Podgorica has achieved some progress in administrative and legal reform, but the report underlines that there are still some obstacles in the completion of this process because of a lack of consensus on issues relevant for the constitution, in particular language and religion.

“Results have been limited so far as Montenegro has not yet established a sustained track record on reforms”, the report says.

Lack of progress is noted also in the areas of border policing, asylum, and migration, and the Commission recommends further efforts to deal with these.

Another serious problem pinpointed in Montenegro is money laundering. “Police capacities are limited and there is not yet a proper monitoring of financial transactions beyond the banking system, especially in relation to real estate and foreign investment”, the report says.

“Some progress can be reported in the fight against drug smuggling, but it remains a serious problem”, it adds.


Regarding human rights and the protection of minorities, Podgorica has made progress in establishing a necessary framework following independence. However, it adds: “The creation of a solid basis for minority rights protection requires the inclusion of appropriate provisions in the constitution.”

Turning to the position of civil society, the report says it “remains fragile and tensions between government bodies and non-governmental organizations persist”.

The report says Montenegro has maintained a satisfactory level of cooperation with The Hague Tribunal, and it acknowledges that Podgorica has continued taking up international obligations since independence.

The economy has been growing fast and macroeconomic stability has been improved. “Risks subsist in particular from large current account deficit”.

However, poor administrative capacity has been affecting the economy. “Though structural reforms were pursued, weak institutional capacities and deficiencies in the rule of law continue to hamper the proper functioning of the market economy”, the report concludes.


SERBIA

Sharp divisions among political parties in Serbia have been affecting the overall pace of reform, which has slowed down, the report says.

“Nationalistic rhetoric remains strong and has negatively affected the political climate”, the Commission notes, and adds that the Kosovo issue has continued to dominate the political agenda.

The Serbian government, according to the report, has managed to achieve early positive results in cooperation with The Hague Tribunal, which enabled the European Commission to finalize negotiations on a Stabilization and Association Agreement, SAA.

“Serbia has still to meet its international obligations to fully cooperate with ICTY, before an SAA can be signed”, says the document.

There is a need for further strengthening of democracy and the rule of law in Serbia, says the report, and comments that “the work of parliament has been hindered by the political situation”.

Civilian oversight of the military is a key European Partnership priority and the emphasis in this area needs to be ensuring the effectiveness of parliamentary control and financial oversight.

Another key partnership priority, judicial reform is viewed as lagging behind. “At present the constitution and constitutional law leave room for political influence over judicial appointments”, the document notes.

Although Serbia has adopted an action plan to implement the national strategy against corruption, the Commission’s assessment is that graft remains widespread and constitutes a serious problem. “An anti-corruption agency needs to be established and the anti-corruption plans have still to be fully implemented”.

Money laundering is another serious problem in Serbia, while the Commission considers that implementation of the new legislative framework has been slow. Further legislation and a strategy to prevent of money laundering and the financing of terrorism have still to be adopted.

While some progress has been made in the fight against organized crime, the report emphasizes that this poses a serious problem in Serbia country and more concrete efforts are needed.

Advances are noted in combating the trafficking in human beings through improved regional cooperation and the adoption of a national strategy. However, “Serbia has been recognized as a source, transit, and destination country”.

The overall condition of human rights and the protection of minorities have improved, and the Commission considers that Serbia is relatively well advanced in meeting its obligations.

Improvements have been noted in minority representation in public services and in the use of minority languages. “The inter-ethnic situation in Vojvodina has continued to improve. The situation in South Serbia has remained stable but tense. However, tensions persist within the ethnic Albanian community and their relations with the Serbian population”, the document says.

On minorities the report adds that the situation in the Sandzak has worsened, and there has been a deepening of religious divisions within the Muslim community, including even outbreaks of violence.

Serbia is praised for playing a positive role in improving regional cooperation across South Eastern Europe. However Belgrade is criticized for its approach towards Kosovo, described in the report as not constructive.

The report notes that Serbia has rejected the proposal of Marti Ahtisaari while maintaining that Kosovo should remain an integral part of its territory. “Serbia has continued to discourage Kosovo Serbs from participating in the provisional institutions and self government elections in Kosovo”, the report says, and remarks that Serbia has already called for a boycott of the forthcoming parliamentary and municipal elections in the province.

The document notes that the Serbian economy has continued to grow strongly but progress in macroeconomic stabilization has been mixed. As regards economic criteria, Serbia has made some progress towards establishing a functioning market economy.

“The new government places emphasis in its programme on European integration, but the results have been mixed”, the Commission notes. The professional manner in which the negotiations on an SAA have been conducted is highlighted in the document.

The process of these talks has shown that Serbia has the administrative capacity to progress towards the EU. “Serbia will be well placed to implement a future SAA if this capacity is properly utilized”, the report concludes.


KOSOVO

Despite the delays determining its long-term status, UN-administered Kosovo has managed to maintain overall stability regarding democracy and the rule of law.

“The status issue has continued to dominate Kosovo’s politics”, noted the report – the third in a row to be published separately from the chapter on Serbia.

The main political challenges for Kosovo remain the strengthening of the rule of law, anti-corruption policy, the fight against organized crime and enhancing the dialogue between communities.

The assembly’s work has shown improvement during the past year, but the Commission considers that the “assembly’s law-making and administrative capacities need further strengthening”.

The efficiency of the public administration has shown some improvement, but in the assessment of the report’s authors, Kosovo’s central and local administration remains weak and inefficient.

“Civil servants are still vulnerable to political influence”, the report says.

The judicial system in Kosovo has also serious inadequacies, according to the document. “It is weak and vulnerable, while operating in a complex legal environment in which there is considerable uncertainty”.

As elsewhere in the region, corruption in Kosovo is widespread and constitutes a serious problem.

Justice, freedom and security are fields where Kosovo has made uneven progress in bringing Kosovo’s legislation and practices closer to European standards.

Responsibilities in the field of combating money laundering have been only partially transferred from the UN administration to Kosovo’s provisional institutions.

“Uneven progress can be reported in combating money laundering. Investigations in a number of cases were concluded but no court sentences have been yet handed down”, report says. It also notes the lack of specialized prosecutors to deal with money laundering, and says that economic crimes remain a major challenge.

“Kosovo is one of the main traffic routes for drugs to Western Europe”, according to the Commission. However, the report notes also that there is no strategy to prevent or combat illegal transport and the use of drugs. “Drug trafficking remains a serious problem.”

The report recalls that the number of cases of organized crime investigated increased substantially in the first half of 2007.

“Kosovo is still a destination and transit area for victims of trafficking of human beings. No special legislation on trafficking in human being exists”, the document says.

Concerning its international obligations, Kosovo has made some progress in co-operation with ICTY in The Hague, but the intimidation of witnesses remains a particularly difficult problem.

In the Commission’s assessment little advance has been made in area of human rights and the protection of minorities. “Religious freedom is not fully respected, attacks on religious sites have persisted, and investigations are not always conclusive”, the report notes, and adds that “the legal system is not yet fully functional”.

Very little progress has been made in relation to returnees, refugees and internally displaced people. “The rights of minorities in Kosovo are guaranteed by law, but restricted in practice because of security concerns”, the report says.

The economy has also been influenced by Kosovo’s unresolved status. As the report notes, “economic development continues to be seriously impeded by political uncertainties, insufficient rule of law, limited production capacity and weak infrastructure“. The report concludes that Kosovo “has made little progress towards establishing a functioning market economy.”

Gjeraqina Tuhina is a Brussels correspondent for Kosovo`s public TV, RTK. Balkan Insight is BIRN`s online publication.