BALKAN REGIONAL PROFILE:

THE SECURITY SITUATION AND THE REGION-BUILDING EVOLUTION OF SOUTH-EASTERN EUROPE

(A Background and November 2001 Issue in Brief)

© Institute for Security and International Studies (ISIS), Sofia

Research Study 11, 2001

Hard copy: ISSN 1311 - 3240

AN I S N-SPONSORED MONTHLY ELECTRONIC PERIODICAL


I. INTRODUCTION
II. SECURITY THREATS, CONFLICTS AND POST-CONFLICT DEVELOPMENTS IN THE BALKANS
1. Security Threats: Terrorism
2. The Conflict in FYROMacedonia and Post-Conflict Issues in Kosovo
III.

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

1. Bulgaria
2. THE FRY
3. Romania
IV.

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

1. Bilateral Relations
2. Trilateral Cooperation: Bosnia and Herzegovina-Croatia-FRY
3.  Regional Initiatives: Central European Initiative (CEI)
V.

THE ECONOMIC SITUATION OF THE BALKAN COUNTRIES AND THE REGION

1. Bulgaria
2. Turkey
3. Paris Club-FRY
VI. 

THE PROCESS OF DIFFERENTIATED INTEGRATION OF SOUTH EASTERN EUROPE IN THE EU AND IN NATO

1. EU
2.

NATO

VII. 

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

1. USA
2. Japan
VIII. VIII. CONCLUSIONS: THE SECURITY SITUATION AND THE REGION-BUILDING EVOLUTION

I. INTRODUCTION

The recently launched global fight against terrorism has simultaneously put three significant security issues to the test, at least from a South East European perspective:

· First, the extent to which the democratic and peaceful community of nations has found that important common denominator in the area of security relations after the end of the Cold War, the “common enemy”;

· second, whether applicant countries' chances of joining NATO have improved because of their performance as allies both of the US and of NATO during the counter-terrorist campaign, and,

· third, to what extent the chances of building up the region of South-Eastern Europe as a normal European region in the EU context have been affected by the global strategic rearrangements caused by the needs of the counter-terrorist fight.

None of the three questions are easy to answer, though some tendencies may be noted and registered:

First, in the short term, the common enemy has been clearly identified, but the determination to fight this enemy will strongly depend on an agreement on an acceptable geoeconomic and geopolitical framework among the leading parties of the present global counter-terrorist coalition. From this perspective, the clarity and persistence of the individual South-Eastern European nations’ geopolitical, geoeconomic and geostrategic choices, the practical work in this direction and the level of contribution to the counter-terrorist fight relative to the individual countries’ capacity, are the relevant factors for the evolving Balkan situation of security and region-building. The tenacity of the small Balkan nations in sticking to the historic choices they have made and in deterring the imposition of grand strategic compromises by the influential centres of power within the counter-terrorist coalition at the expense of their longer-term vital interests is the decisive factor of overcoming the uncertainties of the present.

Second, NATO’s position of insisting on continuing the defence reforms as effectively as possible ahead of the NATO Prague summit in 2002, together with the US' testing of future allies' reliability within the alliance during the counter-terrorist fight is perceived as both fair and legitimate by the contending countries.

Third, the EU’s position vis-à-vis the issue of the Union’s enlargement to include South-Eastern Europe in the present situation is perceived and assessed as typical for Brussels: It claims the role of a global player but cannot be politically effective within its own backyard.. The European Commission's insistence on highlighting the difference between the group of ten forerunners on one side, and Bulgaria and Romania on the other (leaving aside the issue of Turkey in this analysis), thus continuously underestimating the harsher conditions under which the accession efforts were made by these two countries in the Balkans with their five wars on the ex-Yugoslav territories in the last decade, underscores the present image of the EU as an economic giant but a political middleweight. Neither Bulgaria nor Romania are asking the EC for unduly favourable assessments in the economic field, but they expect fairer treatment that would take into account their extraordinary situation of having to end wars and conflicting attitudes in the Balkans for their own benefit, but also for the benefit of all EU members and EU contenders. These activities have cost the two South-East European countries a lot of time and have impeded their efforts to reach the economic criteria required. The resources expended by these two countries on regional concentration, which could have been spent on national issues, are not taken into account in the equations of the European Commission and the national governments. The good news is that these two countries are responsible enough not to be de-motivated in their efforts to fight both the enemy of the world (and of the EU) (global terrorism) and of Europe (regional instabilities).

Important and difficult changes in the constitution and in the domestic political relations of FYRO Macedonia have taken place during the last month – once again after a clear message from NATO Secretary-General, Lord George Robertson, that Skopje is lagging six weeks behind in its pledge to provide amnesty for Albanian rebels and to introduce the 15 constitutional amendments. Finally, the ICTY responded to calls to investigate cases of genocide of Macedonian Slavs – an important step in finding formulae of reconciliation. The elections in Kosovo took place as scheduled, and now UNMIK and KFOR have the difficult task of shaping a more stable institutional future of the province within the UNSC 1244 Resolution’s limits, with the eventual support of both Belgrade and the Albanians.

In the last month, the FRY experienced the expected problems in the sphere of civil-military relations, while the Romanian government came under intense public pressure concerning the parameters of the 2002 austerity budget. Podgorica's ambitions of seceding from the federation continued despite the political signals directly transmitted by EU High Representative for Foreign and Security Policy Javier Solana indicating that the EU would prefer an end to the fragmentation of the post-Yugoslav territories.

The presidential elections in Bulgaria went smoothly, fairly and freely. They wrapped up a historic inter-ethnic reconciliation process between the Bulgarian majority and the Turkish minority after a difficult period in 1984-89.

Signals coming from both NATO and the EU on Slovenia's chances of being integrated in both organisations over the next two years are positive and promising for the tiny country in the northwest of the Balkans. The meeting of the members of the Central European Initiative (CEI) in November proved the potential of the cooperation between CEI and the countries of South East Europe.

US policy in the Balkans during the last month continued to be an effective and invariant factor in emancipating the region to the level of a respected partner.

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

1. Security Threats: Terrorism

1) The US Department of State urged tour operators to cancel tourist activities linked with Greece on 4 November. Most probably, close links between Greece and Arab countries, the continuing activity of the “17th November” terrorist organisation in Greece and fear of terrorist acts against US citizens led to this decision.

2) In an interview with the Pakistani English-language newspaper “Dawn” of 10 November, the al-Qaida terrorist network’s boss Osama bin Laden threatened that his organisation possesses nuclear and chemical weapons and that they would be used if America attacked with weapons of mass destruction. The most wanted terrorist is obviously playing a game of nuclear/chemical deterrence. However, it would be irresponsible to neglect nuclear or chemical terrorism in other forms, and to dismiss the issue as an attempt at deterrence. Terrorists can target nuclear facilities, nuclear material and radioactive sources worldwide. South-Eastern Europe features nuclear plants, research reactors, nuclear material and radioactive sources of various kinds. It is essential to demonstrate to the population, to the neighbouring countries and to the world in general that there is an obligation to take additional safety and security measures in the existing circumstances when terrorists are ready to sacrifice their lives in achieving their evil aims. The Bulgarian government and the local authorities have implemented a complex system of additional measures to guarantee the security and safety of the Kozloduy nuclear plant. They include measures preventing theft or the diversion of nuclear material from the plant as well as sabotage designed to cause an uncontrolled release of radioactivity into the environment.

The global "alliance against terror" has also made its presence felt in the Balkans during the last month:

1) The Warsaw Conference on Combating Terrorism of 6-7 November was attended by leaders from South East European countries. US President Gerorge Bush, who addressed the conference by satellite telecast from the White House, told the participants that “all the nations from Central and Eastern Europe are our partners in the fight against terrorism. Al-Qaida is operating in more than 60 nations, including in Central and Eastern Europe. One of their tasks is to destabilise entire nations and regions.” According to US State Department sources, al-Qaida and affiliated organisations are active in Albania, Bosnia and Herzegovina, Kosovo and Turkey. The Balkan states have their work cut out for them in dealing with this direct security threat.

2) After the decision to allow US transport and military aircraft free use of Bulgarian airspace, as well as to permit deployment of troops on Bulgarian territory in the context of Operation Enduring Freedom, the Bulgarian government agreed to provide an airbase near Burgas on the Black Sea for US aircraft. The main function of this strategically well-situated airbase is to host aircraft for re-fuelling US combat airplanes over the Caspian Sea. The airbase is particularly convenient because of the “Neftohim-Lukoil” refinery, which provides gasoline and is very close to the base itself. The refuelling operations began on 26 November.

3) Bulgaria is expected to provide free transit to the German aircraft and troops involved in “Enduring Freedom”.

The on-going defence reform of the Bulgarian armed forces, aimed at adapting the defence of the country to the new security environment and the requirements for NATO membership, includes elements that would provide forces with a direct counter-terrorist purpose. This was disclosed on 2 November by Minister of Defence Nikolay Svinarov.

4) NATO's counter-terrorism efforts involving South-Eastern Europe were disclosed by NATO Deputy Secretary-General Minuto Rizzo at the Warsaw Conference on Combating Terrorism on 6 November. Nations should take action against money laundering, increase their intelligence-gathering and information-sharing efforts, agree on measures to promote tolerance and exchange experience in training anti-terrorist units, he said.

The US Permanent Representative to NATO, Ambassador Nicholas Burns, disclosed major challenges of the anti-terror campaign on 12 November. According to him, the strengthening of local institutions to the point where these countries can manage their own affairs and take their rightful place in the family of democratic European nations will be of special importance in the Balkan countries. Another challenge is the enlargement of NATO. The Alliance and its constituent nations should not calculate how little NATO can get away with, but how much it can do to advance the cause of freedom. Indeed, as President Bush has said earlier, ‘the expansion of NATO has fulfilled NATO’s promise, and that promise now leads eastward and southward, northward and onward’.

NATO Secretary-General Lord George Robertson said after his visit to Moscow on 24 November that NATO and Russia could cooperate in the fight against terrorism and nuclear proliferation in future joint operations in the Balkans. Obviously, the two sides agree these issues are relevant in the Balkans. As has been pointed out earlier by ISIS, the Balkans have been a playground for evolving strategic relations between NATO and Russia. There are concerns that this important cooperation should not lead to divisions of spheres of influence – a geopolitical disease the local nations have been infected with during the last century by different sets of great-power relationships. The only precondition to the relationship between NATO and Russia in the Balkans on the side of the local people is respect for the sovereign geopolitical choices of the individual Balkan nations.

5) Serbian Prime Minister Zoran Djindjic visited Washington, D. C. in the first week of November and displayed his satisfaction that his country, for the first time in 50 years, is part of the democratic world, fighting against a common evil. He also said that as US bombs were falling on the Taliban in Afghanistan, the Balkans (definitely referring to his own country) were on the right side. Two and a half years ago, NATO aircraft bombarded Serbia in an effort to stop and change the Milosevic regime's policy of ethnic cleansing. At that time, Russia was fiercely condemning the NATO campaign, partly because of its interest in preserving its sphere of influence in a region it dominated extensively before the end of the Cold War.

6) Turkey is highly praised by the US government for its position in the fight against terrorism. US Ambassador W. Robert Pearson told the Assembly of Turkish American Associations (ATAA) convention in Washington, D.C. on 1 November that Turkey was providing vital cooperation on the four main “fronts” of the international struggle against terrorism – namely, the diplomatic, military, law enforcement, and financial sectors. Turkish soldiers are already in Afghanistan for logistical support. However, Turkey is also ready to employ forces in combat operations and for peacekeeping.

2. The Conflict in FYROMacedonia and Post-Conflict Issues in Kosovo

a) FYROMacedonia
One of the dangerous tendencies in FYROMacedonia – the “Lebanonization” of the security situation, was slowed down and partly diluted this month. The political influence of NATO's Secretary-General had a significant part in the developments. Violence broke out on 10-11 November after a unilateral deployment of Macedonian security forces into sensitive areas with Albanian population without full coordination with the representatives of NATO, EU, OSCE and the US. Macedonian policemen were killed and the Albanian National Liberation Army (NLA), which had announced its dissolution earlier, was active in the clashes with the authorities. Lord Robertson's visit to Skopje on 7 November was a good occasion to warn the Macedonian leaders that if the political agreements were not implemented, Macedonia could suffer a relapse of the fighting. Reforms have to be enacted and amnesty provided practically. After a carefully prepared and transparent planning process, Macedonian forces can re-enter territories with Albanian population. On 16 November, the Macedonian parliament adopted the new text of the preamble of the constitution and all 15 amendments to the text of the basic law. Under it, the Albanians are guaranteed a broader representation in the country’s administration and police force. Most importantly, the Albanian language acquired the status of an official language in areas with an Albanian majority. The immunity of Albanian MP Hasni Shakiri was lifted with a five-month delay after he left and joined Albanian rebels in their fight against the authorities.

The end of the debates in the Macedonian parliament on the Albanian issues signalled the beginning of the domestic political struggle with a view to the upcoming parliamentary elections. A still immature political elite of Macedonia did not sense that the destabilisation of the parliament hours after the dramatic decisions it had taken could lead to a new round of problems. Prime Minister Ljubco Georgievski called on the Social Democrats and their Albanian partners to return to parliament. Georgievski promised to call early elections in January 2002 if the Social Democratic ministers returned to their positions, including the defence and foreign affairs portfolios.

In another development, UN Chief Prosecutor for war crimes Carla Del Ponte met officials in Skopje on 20 November and discussed allegations of war crimes committed during fights between government forces and Albanian rebels.

A development with longer-term consequences for the evolving Macedonian security situation was the signing of agreements for a ‘joint security policy against the increasing threat of Albanian Muslim terrorism throughout the Southern Balkans’ by the Presidents Boris Trajkovski of Macedonia and Vojislav Kostunica of the FRY. The cooperation will involve the armed forces, intelligence and security forces of the two countries. A joint liaison office will be established to ensure tighter control of highly vulnerable border areas. A highly politicised assessment by both Macedonian and Serbian authorities is that Albanian militants are all Muslim terrorists linked with Osama Bin Laden. Despite a very probable al-Qaida connection, the Albanian insurgency has its roots in the Western Balkan soil and should be dealt with by political means, and with a long-term perspective. For the time being, Macedonia remains in the grips of its parliamentary and government crisis.

b) Kosovo
The general elections in Kosovo on 17 November went smoothly and passed without major incidents during the election process. 1.25 million voters, including 200'000 Serbs, were expected to participate, and the turnout was 65 per cent. Ibrahim Rugova’s Democratic Alliance won the elections with 44.7 per cent of the votes, followed by Hacim Taci’s Democratic Party with 23.7 per cent. Third came Ramus Haradinei’s Alliance for the Future with 8.3 per cent. Only 46 per cent of the Serbs voted and the “Return” coalition got 10.1 per cent of the Serb votes. The parliament of the province has 120 seats and it will elect an administration and a president. Ten seats are reserved for ethnic Serbs. The calls of election winner Ibrahim Rugova for immediate independence were sharply rejected by Belgrade and by the EU foreign ministers. However, the EU foreign ministers agreed that the status of the Yugoslav province must be resolved. EU High Representative for Foreign and Security Policy Javier Solana visited Montenegro and Kosovo on 27 November. The discussions on the future status of Kosovo will hardly be easy and UNSC Resolution 1244 can hardly be neglected in these considerations. This resolution calls for an autonomous Kosovo within the Federation. The Yugoslav constitution treats Kosovo as a province of Serbia, one of the constituent republics of the Federation. In the meantime, the elected parliament and its administration in Kosovo would be well advised to concentrate on the economic issues, on combating crime and improving the living standards. Claims for an independent state by the Kosovo Albanian leaders will hardly be accepted by the rest of the Balkan states.

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

1. Bulgaria
Bulgaria’s presidential elections of 11 November (first round) and 18 November (second round) led to an unexpected change: the candidate of the united left forces and leader of the Bulgarian Socialist Party (BSP), Georgi Parvanov, received 54.13 per cent of the votes, while the traditional favourite of the political ratings in the country – current president Petar Stoyanov – received only 45.87 per cent. Participation was higher during the second and decisive round – just over 50 per cent. The voters' choice was not seen to be linked to foreign policy or security and defence issues: both candidates represent the national consensus concerning the fundamental pillars of the country’s international standing, and share the vision of joining NATO and EU and continuing a regional policy of stability, good-neighbourly relations and integration of the region of South East Europe in the European and Euro-Atlantic institutions. President Stoyanov had the task of repaying the political and economic debt left by the Union of Democratic Forces (UDF) government, which lost the June 2001 parliamentary elections. Petar Stoyanov, though claiming to be an independent candidate, belonged to the UDF, served in an earlier UDF government, and was one of the symbols of the UDF. Despite the prime minister's call to the supporters of his national movement to support Stoyanov, the final result was a clear rejection of the incumbent. Corruption scandals in the UDF government, a hidden deficit of more than US$300 million left by the same government, and open antagonism to the new ruling coalition of the National Movement Simeon the Second (NMSS) and the Movement for Rights and Freedoms (MRF), led to a split of the NMSS votes between the two candidates, and engendered strong support among the ethnic Turkish electorate for the candidate of the Left, Georgi Parvanov. The leaders of the formerly antagonistic BSP and MRF parties, Parvanov and Ahmed Dogan, acknowledged that the results of the last presidential elections complete a longer process of ethnic reconciliation following the violation of human rights of ethnic Turks in the mid-1980s of the last century by the totalitarian regime then in power.

After losing the election, Stoyanov announced he is withdrawing from political activity for at least for a year after he leaves office at the end of January 2002.

2. THE FRY

(1) The willingness of the democratic government of Serbia to cooperate with the UN ICTY in The Hague on concrete cases provoked a rebellion by members of the Serbian Special Forces. This led to the dismissal of leaders of the Serbian State Security by the prime minister, who refused to accept the resignation of Interior Minister Dusan Mihajlovic. The support provided by various representatives of the security and armed forces in October 2000 in toppling the regime of Slobodan Milosevic, which was seen by some observers as a revolution and by others as a coup d’état, led to a pragmatic attitude in shaping new civil-military relations in Serbia with a genuine civil democratic control, as had been expected. Serbia's ambition to join the PfP requires persistent efforts to mould civil-military relations according to the standards of the PfP and the OSCE Code of Conduct. (2) The ICTY in The Hague announced on 23 November it had charged Slobodan Milosevic with genocide in Bosnia – the third and gravest indictment against the former leader of Yugoslavia. (3) On 9 November Milo Djukanovic, the president of Montenegro, announced a referendum in April 2002 to decide the constitutional status of the republic and its relations with Serbia, the republic's partner in the Yugoslav federation. Belgrade protests the division of the federation, but is ready to abide by the decision of the Montenegrin referendum. OSCE representatives, including US officials, told leaders in the Montenegrin capital of Podgorica that the draft referendum law sets too low a threshold for such a momentous decision as changing the republic’s constitutional and international status. According to them, the draft law contains neither provides for a minimum turnout requirement, nor for the “vote of a weighted majority”. The EU High Representative for Foreign and Security Policy, Javier Solana, visited Podgorica on 28 November in an effort to convey the EU’s understanding of the prepared referendum. The EU would clearly like to preserve the integrity of the Federation, which would make it easier to integrate it into the Union. However, if the referendum is democratically organised and convened freely, the results would be accepted. The leaders of Montenegro assured Solana of their will to proceed with the referendum in the coming spring.

3. Romania

Long-delayed reforms and agreements with the IMF led to the formulation of an austerity budget for 2002. The expected pay rise and lower taxes provoked public pressure, including a march on the streets of Bucharest by 8'000 protesters on 22 November. The reforms and the social costs that are linked to them are essential for Romania’s plans to join NATO and the EU.

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

1. Bilateral Relations

a) Slovenia-Bulgaria. The foreign minister of Bulgaria, Solomon Passy, visited Ljubliana on 5 November and met with his counterpart, Dimitriy Rupel. The diplomats signed an agreement on fighting organised crime, an agreement on a visa-free transit regime, an agreement on combined transportation and an agreement on cooperation in the fields of science, education and culture. On behalf of the Bulgarian prime minister, Passy extended an invitation to Slovenian Prime Minister Yanez Drnovsek to visit Bulgaria next year.

b) FYROMacedonia-FRY. On 10 November, President Vojislav Kostunica of the FRY visited Skopje for his first working visit and met with President Boris Trajkovski. The two leaders agreed to cooperate in fighting terrorism.

c) FRY-Bulgaria. (1) The Bulgarian defence minister visited Nis in the FRY and met with his counterpart Slobodan Krapovic on 14 November. They agreed to intensify the bilateral military contacts. The FRY is interested in joining the Multinational Peace Force South East Europe (MPFSEE), stationed in Plovdiv, Bulgaria. (2) The director of the Bulgarian “Customs” Agency, Emil Dimitrov, paid a working visit to Belgrade from 19-21 November and signed an agreement with his Yugoslav counterpart, Vladan Begovic on joint efforts against smuggling and drugs-trafficking. They also agreed to exchange data on imports and exports as well as other information. (3) Bulgarian Foreign Minister Solomon Passy visited Belgrade on 26 November and met with his counterpart Goran Svilanovic. They confirmed their political commitment to reconstructing the highway Sofia-Nis, which is the main road linking the two countries and their economies. They signed a bilateral agreement on collaboration in the fields of science, education and culture for the period 2001-2003. They agreed to speed up the customs service by carrying out controls only on one side of the border. An agreement was reached to open a Bulgarian consular office in Podgorica, Montenegro. Passy met with Yugoslav President Vojislav Kostunica and held the inaugural lecture of the Yugoslav Atlantic Club, whose launching was made with the support of the Bulgarian Atlantic Club. Solomon Passy was the founder of the Bulgarian Atlantic Club more than 11 years ago.

d) Bulgaria-Romania. The Prosecutors-General of the two countries, Prof. Dr. Nikola Filchev and Dr. Joica, agreed on 20 November in Sofia to intensify their cooperation in fighting corruption, terrorism and drugs trafficking.

e) Turkey-Greece. The chief of the Turkish general staff accused Greek fighter jets of intercepting Turkey's warplanes in international airspace and of entering Turkish airspace over the Aegean Sea. Engaging in dangerous mock dogfights and sorties in Aegean airspace is common for the two NATO allies. Analysts assess these uncoordinated acts of the allies as indicators of a rising tension between the two countries concerning Cyprus and its integration in the EU.

f) Croatia-Slovenia. Slovenian President Milan Kucan visited Zagreb on 28 November and urged Croatia to ratify a border deal with Slovenia of July this year that regulates the sea and land border between the two former Yugoslav states. There also remain unresolved financial issues from the time when both were federation members. The solution of these issues is vital for both countries’ efforts to integrate in the EU. Whether international arbitration can be avoided in this matter depends on the good will to find an acceptable solution.

g) Greece-Bulgaria. On 29 November, the foreign minister of Bulgaria, Solomon Passy, met in Athens with his counterpart, George Papandreou and with President Kostas Stefanopoulos.

2. Trilateral Cooperation: Bosnia and Herzegovina-Croatia-FRY

In the first half of November, the three countries agreed to cooperate in facilitating the return of refugees and internally displaced persons. A joint statement confirmed the need for cross-border cooperation to solve this complicated problem resulting from the past decade of post-Yugoslav wars. This measure reflects a very positive development of post-conflict rehabilitation in the Western Balkans.

3. Regional Initiatives: Central European Initiative (CEI)

The Prime Ministers of the CEI and more than 2'000 trade experts of the member countries met on 22-23 November in Trieste, Italy. The leaders discussed new security issues emerging in Europe after the 11 September terrorist attacks against the US, as well as the implementation of the Pact of Stability for South-East Europe and the infrastructure in the Balkans. Among the CEI participants from South-East Europe are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the FRY, FYROMacedonia, Romania and Slovenia.

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

1. Bulgaria

A study by the “Economist Intelligence Unit” from the end of October concluded that the business climate in Bulgaria is steadily improving. A comparative study for the period 1996-2000 rates the country 56th out of 60 states. The Economist experts expect Bulgaria to reach 47th place in the period 2001-2005 

2. Turkey

The Turkish state petroleum company TPAO announced on 2 November it would receive a US$150 million loan from the European Investment Bank (EIB) for the first gas storage facility. The project is expected to be completed in 2004.

3. Paris Club-FRY

It was announced on 16 November that the Paris Club of state creditors is remitting US$3 billion, or almost two thirds of the Yugoslav debt. This really generous decision is unprecedented in the history of the Paris Club. The FRY owes US$1.8 billion to the Paris Club, to be repaid over the next 22 years.

4. IMF-Turkey

On 16 November, the Turkish government outlined a range of cost-cutting steps designed to win the IMF loan it says it needs for 2002. A loan of around US$10 billion has been earmarked for Turkey, but not yet fully approved. It would be the country’s third emergency loan within 12 months. Slashing state sector costs is seen as one of the most important steps Turkey must take in order to win the loan. The IMF demands assurances that the public sector's primary budget surplus, which is the budget balance excluding payment on debt, will be 6.5 per cent of the gross national product for 2002. The measures include job cuts in the public sector's bureaucracy, preventing illegal use of electricity (thousands of homes in poor suburbs tap into the electricity grid illegally without paying for consumption), cuts in the Turkish state health-care system, caps for state employees, and incentives for early retirement of employees over 50 years old. Subsidies to farmers for agricultural produce, except soy and rapeseed, will also be ended.

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

1. EU

a) EU-Turkey. On 6 November Turkey signalled defiance towards the EU by reiterating warnings it might annex the breakaway northern province of Cyprus if the EU admitted the internationally recognised Greek Cypriot government. If Turkey implements this threat, it will jeopardize all chances of ever joining the EU. Turkish Deputy Prime Minister and Minister of State Mesut Yilmaz said on 27 November that Turkish-EU relations and the Cyprus question were two separate issues. He added that the EU was aware of Turkey’s sensitivity on this subject and said it was the EU that had to re-evaluate its attitude. The 48th meeting of the Joint Parliamentary Commission of the EU and Turkey was convened in Istanbul on 27-28 November, and Foreign Minister Ismail Cem delivered the opening speech. The MPs discussed the contentious Cyprus issue.

b) EU-Accession Countries of South East Europe. The 2001 Regular Report on the progress towards of Bulgaria, Romania and Slovenia accession was presented to the individual countries in mid-November. Romania is experiencing a lot of difficulties, but for the first time is described as a reliable partner in the negotiations. The annual report is most favourable for Ljubljana and the EC is close to suggesting the integration of Slovenia into the Union. Bulgaria receives a better assessment than in the previous report and is considered close to having a functioning market economy. The EC report confirms the schedule for Bulgaria completing the accession negotiations in 2003 and joining the Union by the end of 2006.

c) EU-Bulgaria. Bulgarian Foreign Minister Passy insisted on closer involvement of the countries applying to join the Union in the discussions on the EU's common security and defence policy during a visit to Brussels on 20 November. In a similar statement in Brussels on the same day, Interior Minister Georgi Petkanov restated Bulgaria’s readiness to participate in the common European police force with 50 policemen. Bulgaria will be ready to provide the contingent in 2003. Bulgaria closed the 13th chapter of accession negotiations with the EU on 28 November. It continues negotiations on 13 other chapters, and plans to tackle three others by the end of this year. The last one, on agriculture, will be addressed in January 2002, when Spain assumes the EU presidency.

2. NATO

NATO-Bulgaria. The Bulgarian deputy ministers of foreign affairs, defence and economics presented Bulgaria’s NATO accession timetable for 2001-2002 to representatives of the 19 alliance members. The programme has adequate financial backup, as was demonstrated to the permanent representatives.

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

1. USA

a) USA-Applicant States from South-Eastern Europe for NATO Membership. The US House of Representatives approved a draft bill in support of next year’s NATO enlargement on 7 November. The draft envisages US financial help to the candidates. Romania will receive US$11.5 million, Slovenia US$4.5 million, and Bulgaria US$10 million.

b) USA-Bulgaria. US Deputy Assistant Secretary of State Janet Bogue and Bulgarian Foreign Minister Passy signed a bilateral framework agreement on overflight, passage and deployment rights of US troops and military equipment on Bulgarian territory in Sofia on 12 November in an exchange of diplomatic notes. The Bulgarian parliament unanimously ratified the agreement on 14 November. Thus, Bulgaria made good on its commitment to act as a de facto ally of NATO in the fight against terrorism. Last month, Romania signed a similar agreement with the US.

c) USA-Albania. US Deputy Secretary of Defence Paul Wolfowitz met with Albanian Minister of Defence Pandeli Majko in Tirana on 19 November. They discussed the Albanian defence restructuring programme, armed forces cuts and ways of improving interoperability with NATO, mainly in the area of command, control, communications, computers and intelligence. The Albanian defence minister told the press that his country had made available to the US a 500-strong commando unit for possible duty in Afghanistan – a significant contribution given the fact that Albania is a predominantly Muslim nation.

d) USA-FYROMacedonia. The US government donated 19 cars as well as demining equipment, computers and communications hardware worth US$500'000 to Skopje on 26 November.

2. Japan

Japan-Bulgaria. Ognyan Gerdzhikov, Speaker of the Bulgarian Parliament, visited Japan from 11-14 November. He met with Emperor Akihito and Empress Michiko, with Speaker of the Japanese House of Representatives Tamisuke Vatanuki, and with Prime Minister Junichiro Koizumi. An invitation was extended to the Japanese prime minister on behalf of the Bulgarian Prime Minister to visit Bulgaria. The Bulgarian delegation met representatives of the Japanese business community.

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

The main recent security issues have been improving the stability in the Balkans and making full use of the counter-terrorist potential of the countries of South-Eastern Europe. Preventing the treatment of the region as a second-tier applicant to the NATO and EU enlargement processes is a significant element of stability in the Balkans. The practical cooperation between the US and local countries in the counter-terrorist campaign is a good example. The main burden of the region-building efforts is carried by the Balkan countries and governments, and they are making difficult steps in the right direction.


EDITORIAL STAFF:

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Dr. Plamen Pantev, Editor–in–Chief

ISSN 1311 – 3240

Dr. Tatiana Houbenova-Delissivkova

Address: ISIS, 1618 Sofia,

Mr. Valeri Rachev, M. A.

P. O. Box 231, Bulgaria

Mr. Ivan Tsvetkov, M. A.

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Dr. Todor Tagarev

E-Mail Address: isis@cserv.mgu.bg


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