BALKAN REGIONAL PROFILE:

(A Background and September 2002 Issue in Brief)

Research Study 41, 2002

I. INTRODUCTION

The events and developments in Southeastern Europe during September were indicative of two trends:

First, the continuing involvement of the region in the enlargement processes of NATO and of the European Union as well as in the new US-led world-wide coalition in the fight against terrorism.

Second, an improvement in bilateral, multilateral, and regional cooperation that helped overcome the negative aspects of the post-conflict period. Also noticeable were the individual countries' efforts to cope with economic, social, political, and cultural shortcomings. The success of these efforts will very much determine the outcome of attempts to advance development.

What concrete parameters has regional evolution undergone in the last month?

A major deficiency of the Balkan region, corruption, showed a certain degree of improvement as registered by Transparency International: Slovenia remained in the group of the 30 least corrupt states, taking 27th place, and Bulgaria moved almost 20 places ahead, jumping to 45th place in the rating (equal with the Czech Republic and some Baltic states). Croatia holds 51st place, while Romania and Albania are still behind in the 77th and 81st place position, respectively.

Greece made headway in the fight against the 17 November urban terrorist organization with new arrests of key members. Turkey continued its successful command of ISAF in Afghanistan while preparing the transfer to a joint Dutch-German command by the end of the year. The Bulgarian parliament adopted at first reading a comprehensive counter-terrorism act. The bilateral US-Bulgarian cooperation was extended after the visit of a high-ranking FBI official to Sofia and a similar return visit by leading Bulgarian police experts.

The post-conflict developments in the Former Yugoslav Republic of Macedonia, Kosovo, Bosnia and Herzegovina, and Serbia and Montenegro sent contradictory signals of a successful drive towards democracy, ethnic tolerance, and stability on the one hand, and of nationalism, violence and continuing ethnic tensions on the other. The elections in Macedonia and in Serbia were special tests for the efforts towards post-conflict reconstruction. The wounds of the post-Milosevic era have not yet healed, partly due to the obvious resistance to rationality and truth on the part of Milosevic himself during the trial in The Hague. His behavior in the court, however, does not have as much of an influence on Serbian domestic politics as he expected: people and politicians are trying to focus less on the past and more on the future economic and social issues facing the country. Romania and Bulgaria have concentrated their political energy on the fight against corruption and the preparation for the NATO summit in Prague. Croatia is setting the stage for a decisive reform of the armed forces in October. While Albania is still lagging behind in the fight against human trafficking and the reform of the judiciary, it registered a clear success in preventing violent acts after an arms cache was found near the border with Macedonia. The establishment of a new anti-smuggling task force unit within the Ministry of Interior is expected to improve the effectiveness of the fight against crime in Albania.

Bulgaria and Romania carried out a joint naval exercise as an important display of bilateral military cooperation on the eve of the Prague NATO summit. In September, certain tensions re-surfaced in the Greek-Turkish bilateral relations during a NATO airspace exercise. Bulgarian diplomats made an effort to secure an oral agreement from a Turkish Islamic party leader that his party will tolerate different trends in Islam - an important condition for the specific highly tolerant version of Islam professed by Bulgarian citizens.

In the area of multilateral relations, various Balkan countries have shown that there is a real need for trans-border cooperation, and that efforts are being made to satisfy that need. Economic cooperation, transport infrastructure, and customs and defense cooperation were the main items on the agenda of the ministers and other high-level officials of Southeastern European countries.

The regional cooperation in the context of the Pact of Stability and the anti-crime regional center in Bucharest confirmed the vitality of both regional formats.

The accession negotiations for EU membership continued for several countries. Slovenia has reached a level of economic development that allows it to become a net contributor to the budget of EU from 2004. Bulgaria is soon to conclude the 22nd out of 30 negotiation chapters with the EU. Further efforts are required from both sides to arrive at agreeable positions on the reform of the judiciary system and on the future of Bulgaria's nuclear energy facilities. EU President Romano Prodi sided with Romania when he said that the little quarrel on the ICC issue would not harm Bucharest's entry bid. In its relations with Croatia, the EU will support the improvement of the air traffic service in Zagreb. High-ranking members of the Turkish executive insisted that the EU pursue an open-doors policy when dealing with Ankara. Serbian leadership declared its application for EU membership would be ready by the end of 2004.

In their preparations for NATO membership, Bulgarian authorities completed the process of destroying Soviet-era SS-23 ('Oka') missiles of the Bulgarian armed forces. Bulgarian and British troops exercised together in September and Bulgarian defense officials proposed that NATO use the facilities of the Plovdiv-based multinational peace force for Southeastern Europe as regional NATO headquarters. Bulgaria and Romania view the upcoming invitation to join NATO in November in Prague as a great opportunity to mobilize the non-NATO Balkan countries - Albania, Bosnia and Herzegovina, Croatia, Macedonia, and Serbia and Montenegro - to join the Alliance. Two months before the NATO summit, a delegation of NATO's Parliamentary Assembly visited Slovenia, where support for NATO membership has generally been low and is falling further.

The US and Russia maintained an active interest in Balkan affairs. Romania defended its bilateral treaty with the US on the ICC, which has not yet been ratified by the parliament in Bucharest. Bulgarian President Georgi Parvanov visited the US and briefly met with President George Bush. He held a videoconference with Vice President Richard Cheney. Parvanov also paid a working visit to Russia and met with President Vladimir Putin. Russia and Greece continued negotiations over Athens' purchase of Russian warships. In September, Bulgaria chaired the UN Security Council. Debates during Bulgaria's term as council chair included important discussions on Kosovo, Iraq, Palestine, and the one-year anniversary of the terrorist attacks against the US.

II. SECURITY THREATS, CONFLICTS AND POST-CONFLICT DEVELOPMENTS IN THE BALKANS

1. Security Threats: Terrorism

a) Greece
Dimitris Koufodinas, the most wanted suspect in the investigation of the 17 November terrorist group, surrendered to Greek police in Athens on 9 September. Koufodinas has been charged with the 1988 murder of the US defense attaché in Athens, Captain William Nordeen, and the killing of Air Force Sergeant Ronald O. Stewart in 1999, and is suspected of killing UK defense attaché Brigadier Stephen Saunders in 2000. After this arrest, it is believed that the core leadership of November 17 has been apprehended, though the founder of the group remains at large. Koufodinas' wife Angeliki Sotiropoulou was also arrested on 16 September. She was taken into custody after the police found her fingerprints in a terrorist safe house.

b) Turkey
(1) With the fight against terrorism drifting to an attack of a sponsor of violent extremism - the regime in Iraq, known also for its record of possessing and using weapons of mass casualties, Turkey's military on 10 September completed a report outlining possible Turkish responses should war break out between the US and Baghdad. The report stresses that Saddam Hussein's regime is a key threat to Turkey. Another important conclusion of the report is that a conflict between the US and Iraq is inevitable. On this basis, the report urges preparations for potential counter-strikes from Iraq if the US uses Turkish facilities to launch an attack. (2) Turkey on 19 September declared its readiness to hand over command of ISAF in Afghanistan on schedule in December, and said it wants to give it to a NATO ally. ISAF consists of 5'000 troops from 19 nations and came under Turkish command on 20 June for six months. It is likely that the Turkish command will be followed by a joint Dutch-German command.

c) Bulgaria
(1) The Bulgarian Ministry of the Interior announced on 3 September it would establish a regional training center for senior police officers in Southeastern Europe. This will provide an opportunity to share Bulgaria's experience in fighting drug trafficking, illegal migration, and prostitution. (2) Bulgarian President Georgi Parvanov chaired the special UN Security Council meeting on 11 September that reaffirmed the UN's dedication to fighting terrorism. Bulgaria held the presidency of the council for September. The UN Security Council issued a presidential statement read by Parvanov. The Council reiterated its support for the coalition that took action against the Taliban, al-Qaida, and their supporters, and for resolution 1373, which made the fight against terrorism a mandatory obligation for UN member states, and for the Counter-Terrorism Committee. (3) A meeting of high-level Bulgarian Interior Ministry officials with the FBI and the US Coordinator for the Balkans, Robert Clifford, was convened in Sofia on 18 September. He said the FBI had a special interest in Bulgaria and was working for the opening of a permanent office in Sofia. He lauded the unprecedented cooperation between the two countries in the fight against terrorism and said one of the aspects of this fight would be the funding of this office. The Chief Secretary of the Ministry of Interior, General Boyko Borisov, and the Director of National Police, General Vasil Vasilev, left for Washington on 27 September on a working visit to channel practical cooperation with US authorities in the fight against terrorism. (4) The Bulgarian parliament on 26 September adopted unanimously and at first reading the Law of Measures against Financing Terrorism. This law is in implementation of the UN Security Council recommendations to improve the national legal measures against terrorists. The law provides the conditions for freezing the bank accounts of individuals and legal entities, included those on a special list that will be published in the State Gazette. The terms of updating this list are also determined by the law.

2. The Conflict in FYROM and Post-Conflict Issues in Kosovo, Southern Serbia and Bosnia-Herzegovina

a) Macedonia
(1) Violent incidents marred the pre-election period in Macedonia ahead of the general elections on 15 September. Police officers were repeatedly ambushed by the illegal Albanian National Army (ANA), with several killed. The political competition developed in a generally tolerant framework and ended likewise on 15 September. The peaceful transfer of power was a positive sign in the short history of the young state of Macedonia. The winner was Branko Chervenkovski's pro-Serbian Social Democratic Party of Macedonia, and the VMRO-DPMNE party of former prime minister Ljubco Georgievski lost. The winner among the Albanian parties was the former leader of the illegal Army for National Liberation (ANL), Ali Ahmeti, who stirred the seven-month civil war in Macedonia last year. Although he is currently one of a number of extremists banned from visiting Western European countries and the US, it is expected that this restriction will be lifted as a gesture acknowledging his positive, peaceful, and constructive position in favor of the unity of the state. The memories of last year's strife, when hundreds of Macedonians were killed in inter-ethnic clashes, will be harder to erase. Another peculiarity of the general election results is that the winners have the strongest nostalgic sentiments towards the old Yugoslavia to be found on the territory of the former republic. The political heritage of Milosevic that has been lost in Belgrade over the last two years was preserved in Skopje by the party of Branko Chervenkovski and numerous former and active members of Yugoslav intelligence services. This will definitely leave a mark on political life in Macedonia. The formula for ethnic aspects of political cohabitation in the next years is unclear as of yet, but most probably a compromise between Crvenkovski and Ahmeti will serve as the foundation for the next electoral term of four years. This will not necessarily lead to calm and tolerance in everyday life. Many Macedonians consider Ahmeti a terrorist and this perception would not provide the required stability in the initial period. (2) The present NATO mission in Macedonia, Amber Fox, will most probably be extended to support the stability in the Balkan country. This is important after the EU's failure to find ways of bringing Greece and Turkey together over the issue of using NATO assets. Turkey is refusing to allow the EU to use NATO assets unless Ankara is consulted in advance on how the assets will be used. Greece asked the EU to refuse this request, leading NATO planners to prepare an extension of the present peacekeeping mission in Macedonia.

b) Kosovo
A small explosion injured five people on a busy street in the center of Pristina on 13 September. Usually such explosions in Kosovo can be traced to organized crime or ethnic tensions. Kosovo is legally part of Serbia and Montenegro, but is a de facto protectorate of the UN. One of the province's main sponsors, the EU, has decided to cut its financial assistance from  150 million to  50 million. The ICTY in The Hague announced that by the end of the year, Albanians would also be indicted for war crimes.

c) Bosnia and Herzegovina
(1) In the second half of September, SFOR held a 10-day military exercise in Bosnia and Herzegovina. Its aim was to demonstrate the ability of NATO-led peacekeepers to link up and cooperate with international troops already on the ground. 500 troops from the Netherlands, 150 from Romania and 30 from Poland - all part of NATO's Strategic Reserve Force - joined troops already deployed in Bosnia and Herzegovina and participated in their activities. Parallel to this exercise, a similar one was conducted in Kosovo. These steps aimed at stabilizing the situation are indicative of NATO's preparations to establish a single command that would cover the whole region where NATO troops are already stationed. (2) A senior Bosnian Serb police officer was shot dead in front of his house on 24 September in the Serb part of Sarajevo. No motive has been determined yet for the killing of Zeljko Markovic, head of police in the administrative area of Serbian Sarajevo. A UN international police unit is in Bosnia and Herzegovina until the end of 2002 to train and monitor Bosnia's police force in its attempts to restore the rule of law in the war-scarred country.

III. THE NATIONAL PERSPECTIVES OF THE BALKAN COUNTRIES: SPECIFIC ISSUES

1. Albania
In the last days of August, Albanian police found the third arms cache in a month in the district of Librazhd, close to the Macedonian border. The fight against weapons trafficking in the area was a top priority issue for the Albanian police due to the general elections in neighboring Macedonia in September. The hoard included 18'000 rounds of ammunition. The other recent hauls yielded 80 light weapons and 130'000 rounds. It is likely that other caches still exist in the border area. (2) At the end of August, the Albanian Interior Ministry announced the formation of an elite anti-smuggling unit called Delta Force. Albanian Prime Minister Fatos Nano personally inspected the unit. The members of the unit have already been involved in joint operations with similar Greek and Italian forces. Albanian police recently captured 12 smugglers and nine speedboats.
Despite these successful measures, a lot of work remains to be carried out in Albania to establish an independent judiciary and to register successes in combating human trafficking.

2. Bulgaria
The fight against corruption was the focus of attention for the government and parliament in the last month. A high-level government anti-corruption commission with significant powers began its work this month. It was backed by a parliamentary decision on 11 September to form a commission to fight corruption. The lawmakers voted 113-34 to form a 16-member commission on corruption. There were 57 abstentions. Curbing corruption and reforming the judicial system remain priority objectives of the government. This month, Bulgaria advanced almost 20 places in the group of least corrupted states, according to Transparency International. For the time being, Bulgaria holds 45th place, together with the Czech Republic and some Baltic states. Of the Southeastern European countries, only Slovenia was rated higher, taking 27th place.

3. Serbia and Montenegro
(1) The first part of the trial against Milosevic in The Hague ended on 9 September: ICTY prosecutors have finished presenting the first phase of their case against the former Yugoslav president for crimes against humanity. On 26 September, the prosecution charged Milosevic with the more serious charge of genocide during the wars in Croatia and Bosnia. (2) The first round of the presidential election in Serbia was held on 29 September. This was the first post-Milosevic presidential election in Serbia. The people were called upon to choose between the pain of economic transition, as suggested by the Deputy Prime Minister of the federation, Miroljub Labos, or a go-slow approach, as advocated by the conservatives of the nationalist President Kostunica. The first round of the elections was won by Kostunica (31 per cent), followed by Labos (28 per cent) and radical nationalist Seselj (22 per cent). The second round will be In October. 44 per cent of the voters abstained during the first round.

4. Romania
Acting on a governmental decision earlier this year, an anti-corruption office was opened this month in Bucharest. Though it still faces some logistical problems, this was a clear sign the government is ready to improve the image of the country just two months before the NATO summit in Prague. Romania was rated 77th on a country corruption index published by Transparency International.

5. Croatia
The Defense Ministry of Croatia announced on 27 September it was launching an armed forces reform in October by laying off 3'000 Defense Ministry staff. The reform in the ministry and the armed forces should be over by March-April 2003, according to Defense Minister Zeljka Antunovic. Croatia is due to overhaul, rejuvenate, and modernize its oversized armed forces in order to fulfill criteria for NATO membership. The overall number of the ministry and the armed forces is expected to reach 27'000 over the current 40'700. The government's move is a risky one in a country where unemployment in August was 21.8 per cent. Since the cost of the reform is still unknown, it seems rather an unrealistic goal to complete the reform in just six months. The optimistic view in Zagreb comes from the belief that the World Bank will provide enough funds for the cuts.

IV. THE BILATERAL AND MULTILATERAL RELATIONS IN THE BALKANS. THE STATE OF THE REGIONAL INITIATIVES

1. Bilateral Relations

a) Bulgaria-Romania
From 3-4 September, Bulgaria and Romania held a joint naval exercise under a Defense Ministry program for cooperation between the armed forces of the two countries. The aim of the exercise was to improve interoperability in operations against submarines in compliance with the NATO procedures and standards. The exercise was held in the western part of the Black Sea, out of Bulgaria's territorial waters. Bulgaria participated with four patrol boats, one submarine, one auxiliary vessel, and two helicopters. Romania participated with one patrol ship. The exercise was under the authority of the Varna naval base commander. The naval forces practiced seeking and trailing a submarine, tactical maneuvers, an embargo operation, and transfer of cargo at sea. All these objectives are in the spirit of the Partnership for Peace program.

b) Greece-Turkey
Greek officials announced on 13 September they would cancel parts of a major NATO exercise because of an airspace dispute with Turkey. Despite improved political ties in recent years, military disputes still loom from time to time. Greece called off a portion of NATO's Destined Glory 2002 exercise that was to take part on its territory from 5-18 October because of a disagreement over whether NATO military jets have to submit flight plans before flying through Greek-controlled airspace. The part of the exercise planned for the central Mediterranean Sea and Italy was not cancelled. NATO insists that military jets do not need to submit such plans, while Greece insists they must due to an airspace dispute it has with Turkey in the Aegean Sea. Greece pulled out of the same exercise two years ago after Greek and Turkish jets faced off in the Aegean.

2. Multilateral Relations

a) Trilateral Relations

1) Macedonia-Bulgaria-Serbia and Montenegro
In early August, the three neighboring states signed a protocol for determination of the cross point of these countries. The protocol confirmed the coordinates, forms, and shape of the three-border pyramid that will be installed

2) Serbia and Montenegro-Bosnia and Herzegovina-Croatia
In the beginning of September, representatives of the customs services of Serbia, Montenegro, Croatia, Bosnia and Herzegovina, and Republika Srpska met in Banja Luka. They discussed the future cooperation in the fight against human trafficking and the smuggling of goods.

3) Bulgaria-Serbia and Montenegro-Romania
A meeting of the Foreign Ministers of Bulgaria, Serbia and Montenegro, and Romania - Solomon Passy, Goran Svilanovic, and Mircea Geoana - was convened on 24 September in Vidin, Bulgaria-.They discussed issues of trans-border cooperation in an effort to boost economic development in the three neighboring regions. The talks centered on infrastructure projects that facilitate contacts among people of the border areas, especially the second bridge between Bulgaria and Romania, as well as on the construction of a new railway between Vidin in Bulgaria and Negotin in Serbia, on the smaller checkpoints, and on ways to make them function more effectively.Improvement of the electric power network of the three countries was also discussed.

b) Quadrilateral Relations: Turkey-Bulgaria-Greece-Romania
The defense ministers of Bulgaria, Turkey, Greece, and Romania met on 16 September in Istanbul and adopted a joint declaration. Bulgaria and Romania received clear support from their Turkish and Greek colleagues for the NATO summit in Prague in November. The four countries are expected to participate in Prague. Acting on a Bulgarian proposal, the defense ministers agreed to convene a similar meeting of the Chiefs of the General Staffs of the armed forces of the four neighboring states. The defense ministers of Turkey and Greece agreed to establish a direct telephone line between their offices. The four defense ministers agreed to visit the headquarters of the joint Multinational Peace Force for Southeastern Europe in Plovdiv, Bulgaria. The Turkish defense minister stressed the positive contribution of both Bulgaria and Romania to the international peacekeeping missions in the Balkans and in Afghanistan. This contribution demonstrates the readiness of both states to join the Alliance. Their accession would improve regional stability and balance, Turkish Defense Minister Sabahattin Cakmakoglu said.

3. Regional Initiatives

a) The Bucharest Center for Fighting Crime in Southeastern Europe
The Bucharest Anti-Crime Center coordinated a multinational operation to arrest human traffickers from 7-17 September. The codename of the operation, which was kept secret, was "Mirage" and has been long planned by the regional center. The Bucharest Center was launched in the context of the Southeastern European Cooperative Initiative (SECI), sponsored by Ambassador Richard Shifter from the US State Department. One-third of the 59 arrested individuals were Bulgarian citizens. The Bulgarian Ministry of the Interior was very active in planning the operation.

b) Pact of Stability for Southeastern Europe
Serbia continues to create obstacles to the launch of an infrastructure project that would boost the economy of border regions that are populated with Bulgarians on either side of the state borders. The long-disputed Sofia-Nis highway remains a low-priority issue for the Serbian side - in a long tradition of neglecting Bulgaria's transport links with Central and Western Europe through Serbia, despite contrary declarations that this was a priority for Belgrade in the period before joining the Pact of Stability. If the Infrastructure Committee of the Pact Serbia at its October meeting does not support the longstanding Bulgarian proposal, which has already been delayed several times by Serbian authorities, the Bulgarian public will rightly begin to perceive the issue as a case of intentional ethnic pressure on the Bulgarian national minority in the region around Nis. This area is well known for having the lowest standards of living, as intended by Yugoslav dictators Tito and Milosevic. It is no longer an acceptable policy to humiliate and neglect ethnic minorities in the Balkans, and the leaders of Serbia should remember that lesson as they plan to apply for EU membership in the next one or two years.

V. THE ECONOMIC SITUATION OF THE BALKAN COUNTRIES AND THE REGION

1. Slovenia
In its annual report on Slovenia dated 9 September, Moody's Investors Service says the country's A2 ceiling rating and positive outlook are due to continuing fiscal and monetary prudence, low debt ratios, and an acceleration of structural reform in preparation for entrance of the EU. The rating agency says that new investment opportunities are opening up in familiar territories of Southeastern Europe for both Slovenian corporations and foreign corporations using Slovenia as a base of operations. The potential problems identified by Moody's include a large public sector that generates substantial wage claims, high non-wage costs, poor demographics, and payroll taxes that support generous social security programs. Further pension reforms are also required, according to Moody's.

2. Bulgaria
The Bulgarian GNP increased by 5.3 per cent in the second quarter of 2002 over the same period in 2001, the National Statistics Institute announced on 18 September. GNP growth for the first six months of this year was 4.3 per cent. 72 per cent of Bulgaria's production is generated by the private sector, and 60.1 per cent by the service sector. The industrial part of the production is 29.3 per cent, registering a rise of 1.2 per cent over the previous year. The agricultural sector is, however, in a worse position than last year, dropping from 12 per cent to 10.6 per cent. The expected inflation for 2003 is 4.5 per cent. Bulgaria negotiated a change in its agreement with the IMF on 28 September, shifting it to one of a "preventive" character. This means the country will not receive periodic payments of credit, but the agreed sums will be accumulated and used only in case of crises. Bulgaria is thus effectively letting the world know that it does not require foreign financing to pay off its deficit. Bulgaria has receivable debts from other countries worth approximately US$ 2.2 billion, mainly from Iraq, Libya, Nicaragua, Syria, Mozambique, Cuba, and Afghanistan.

VI. THE PROCESS OF DIFFERENTIATED INTEGRATION OF SOUTHEASTERN EUROPE IN EU AND IN NATO

1. EU

a) EU-Turkey
Turkish Prime Minister Bülent Ecevit urged the EU on 3 September to open its doors to Turkey after Ankara had fulfilled some political pre-conditions to EU membership. The Turkish government insists on starting accession talks after the Turkish parliament passed a set of human rights reforms, including abolishing death penalty for peacetime offences and relaxing its harsh restrictions on language rights for its large Kurdish minority. The EU expects implementation of the new laws and a Turkish position that would lead to the reunification of Cyprus. Turkey expects accession talks to commence soon, since this could attract desperately needed foreign investments to help Turkey emerge from its worst recession since 1945. EU leaders are expected to send a clear political message to Turkey in December at their summit meeting.

b) EU-Serbia
In the beginning of September, Serbian authorities announced they would apply for EU membership at the end of 2004. A lot of changes and shifts in the political mentality are needed before Serbia is ready for such a step.

c) EU-Slovenia
A mid-September working document of the European Commission indicated that Slovenia would be a net contributor to the EU budget in 2004.

d) EU-Croatia
The European Investment Bank (EIB), the EU's long-term loan institution, will grant Croatia Control Ltd.  20 million to undertake a work that aims to improve the efficiency, security, and capabilities of air traffic services in Croatia. The EU and Croatia have a Stabilization and Association Agreement that is preparing the country for accession negotiations.

e) EU-Bulgaria
(1) During a high-level visit of a Bulgarian government delegation to the EC in Brussels on 6 September, EC representatives underlined the urgent need for Bulgaria to win the fight against corruption and to reform its judicial system. (2) The Bulgarian negotiator at the accession talks with the EU, Minister of European Affairs Meglena Kuneva, said on 7 September that there was good reason to expect positive assessments of Bulgaria's preparations for membership in the annual country report of the Commission on 9 October. Though a concrete indication of Bulgaria's accession date is not expected, major positive shifts have been witnessed in 2002, EC Commissioner Günter Verheugen told Kuneva during her visit to Brussels.

f) EU-Romania
EC President Romano Prodi told Romanian Prime Minister Adrian Nastase on 26 September in Brussels that the dispute between the EU and Romania over the new International Criminal Court (ICC) would not harm his country's bid for EU membership. However, Prodi warned the prime minister that the EU expects his country to be loyal concerning international relations in the future. Romania concluded an agreement with the US in August that it would not hand over any US military personnel to the newly established, EU-sponsored ICC in The Hague.

2. NATO

a) NATO-Bulgaria
(1) 250 UK troops of the UK Royal Regiment of Artillery held exercises in Bulgaria from 28 August-24 September. Units of the Bulgarian brigades in Karlovo and Kazanlak participated in a joint shooting exercise from 9-15 September. The British side fully funded the exercise, which was held under the auspices of the UK and Bulgarian defense ministries. (2) Bulgarian Defense Minister Nikolay Svinarov said on 17 September that Bulgaria might propose that the second largest city - Plovdiv, becomes NATO regional headquarters after the Alliance's November 2002 summit in Prague. The only military unit in Plovdiv that complies with NATO standards is the one that currently houses the SEEBRIG - the Southeastern European Brigade. The SEEBRIG headquarters were officially transferred to Constantia, Romania on 26 September.
Bulgaria and Romania are expected to provide support to the non-NATO Balkan countries in preparing to join the alliance once the two countries formally join the organization.

b) NATO-Slovenia
(1) In the first days of September a NATO Parliamentary Assembly delegation visited Ljubljana and met with Slovenian MPs and with Defense Minister Anton Grizold. They discussed a broad spectrum of issues, concerning the reform of the Slovenian armed forces. (2) According to a poll in mid-September, only 42.2 per cent of Slovenes support their country joining NATO. 31.5 per cent are opposed, while 26.2 per cent were undecided.

VII. THE INFLUENCE OF OTHER EXTERNAL FACTORS ON THE REGION: NATIONAL GREAT POWERS AND INTERNATIONAL INSTITUTIONS

1. US

a) US-Romania
Romanian Foreign Minister Mircea Geoana defended his country's decision to sign the bilateral agreement with the US to prevent US citizens from being turned over to the ICC and rejected charges it was a ploy to win NATO membership. There are legitimate US arguments and the geostrategic position and interests of Romania concerning the Black and Caspian Sea and Central Asia - regions the US is deeply involved in - made this course of action inevitable for the Romanian side.

b) US-Slovenia
Slovenia's Defense Minister Anton Grizold made a visit to the US in the second half of September. He discussed a broad spectrum of issues concerning bilateral relations and the enlargement of NATO with his US counterparts.

c) US-Bulgaria
Bulgarian President Georgi Parvanov made a visit to the US on the occasion of Bulgaria's presidency of the UN Security Council in September. He met shortly with President George Bush and spoke on video-screen with Vice President Cheney. Bulgaria is a staunch supporter of the US in the fight against terrorism and is expected to be invited by NATO to join the organization at its Prague summit in November this year.

2. Russia

a) Russia-Greece
According to Russian industry sources, Athens is negotiating with Moscow over the purchase of combat and transport ships for the Greek navy. The Greek Ministry of Defense is reviewing the final conditions for the purchase of five attack ships and several Zubr-class hovercrafts.

b) Russia-Bulgaria
Bulgarian President Georgi Parvanov paid a working visit to Russia from 19-21 September and met with Russian President Vladimir Putin. This visit did not bring any concrete results, but it is expected that it will politically stimulate the weak economic dialogue.

VIII. CONCLUSIONS: THE SECURITY SITUATION AND THE REGION-BUILDING EVOLUTION

The region of Southeastern Europe is gradually freeing itself from the burdens and obstacles of the post-Cold War conflicts. The region is slowly accumulating an integration capacity for the EU and NATO blocs. The potential that accrues to both institutions through their enlargement and preparations for enlargement will inevitably have a geopolitical influence on developments in the eastern part of the Black Sea and its adjacent regions to the east. The magnitude of the problems is enough to stay concentrated on the Balkan developments. Much work remains to be done before all parts of Southeastern Europe are stabilized irreversibly. Even more effort is needed to modernize its economy, its transport and communications infrastructure, its political culture, and society. Nevertheless, much progress has been made in the last decade and the Caucasian-Caspian Sea region may soon become a model for extending the Euro-Atlantic paradigm further to the east.