BALKAN REGIONAL PROFILE:

I INTRODUCTION

II CONFLICTS AND POST-CONFLICT DEVELOPMENTS IN THE BALKANS

1. The Kosovo post-conflict developments
2. The Post-war rehabilitation of Bosnia and Herzegovina

III THE NATIONAL PERSPECTIVESOF THE BALKAN COUNTRIES: SPECIFIC ISSUES

1. Albania
2. Bulgaria
3. Croatia
4. Federation of the Republic of Yugoslavia (FRY)
5. FRYOMacedonia
6. Romania

IV THE BILATERAL AND THE MULTILATERAL RELATIONS IN THE BALKANS

1. Bilateral Relations
2. Multilateral Relations

V THE ECONOMIC SITUATIONS OF THE BALKAN COUNTRIES AND THE REGION

1. Albania
2. Bulgaria
3. Greece
4. Romania
5. Turkey
6. "Balkans Recovery Plan"

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

1. USA
2. EU
3. OSCE
4. Russia

VII THE SECURITY SITUATION AND THE REGION-BUILDING  EVOLUTION:CONCLUSIONS

I   Introduction

Ten years after the historic changes that swept Eastern Europe the thinking and attitude of the regime in Belgrade remains as totalitarian as ever.  Knowing too well how complicated it is to overcome hundreds of years of mutual hatreds due to differences in ethnicity and religion – a state of affairs that the present leadership of the Federal Republic of Yugoslavia (FRY) has substantially contributed to worsening in the last decade — it nevertheless tries to utilise this situation for its own opportunistic political purposes.  Playing the role of “near-by observers”, Milosevic and his crew raise claims against the ‘inefficiency of the UN’ and ‘hostile anti-Serbian forces’ in general to improve the fate of Serbian people in Kosovo.  No support is provided by Milosevic for rebuilding the sabotaged infrastructure of the province.  The same regime causes Immense inconveniencies and economic losses to the neighbouring Danube countries by refusing to cooperate in jointly clearing debris from the war.

However, time is not the ally of the end-of-the-20th-century dictators:  mounting resolve of the Serbian opposition is aided by the readiness of the West to be practically supportive of efforts to change the political tides of FRY and by a firm will of the Yugoslav neighbours to chart a European future of the whole Balkan region, including the people of Serbia and Montenegro in this design.  The minds of the Yugoslav people who see and hear what is going on in their immediate neighbourhood will soon become the most active factors in getting rid of the present leadership.  The resolve of the European Union (EU) and North Atlantic Treaty Organization (NATO) to continue their engagement with South-East Europe and countries contending for membership from the region and thus strengthening the power of example for the Serbian people will perform the most important part of the job indirectly.

II   Conflicts and Post-Conflict Developments in the Balkans

1. The Kosovo post-conflict developments

were again central for the security situation in the region in November.

Serbs continued to be terrorised by Albanians seeking revenge.  By chance, 400 ethnic Serbs survived  a railway-bridge bombing near Kosovska Mitrovica.  Momcilo Trajkovic, one of the Serbian representatives in the Kosovar Transitional Council, was wounded after an assassination attempt in his own house on 1 November.  On 11 November UN teams reported the exhumation of 2,108 bodies – mostly of Albanians — to the ICTY in The Hague.  Much work remains to be carried out to complete documentation on the victims of Serb and KLA atrocities against human beings of the other ethnicity.  According to the UN High Commission on Refugees (UNHCR) and Organization for Security and Co-operation in Europe (OSCE) reports from 3 November, the overall situation of ethnic minorities in Kosovo remains precarious.  While crime statistics indicate a decline in the overall number of violent incidents as far as minorities are concerned, there has been a significant decrease in the overall non-Albanian population since June.  There have been some limited returns, but groups of non-Albanians continue to leave.  The general climate is of violence and impunity, of widespread discrimination, harassment, and intimidation against non-Albanians.  Widespread disrespect for human rights increasingly affects moderate Albanians and those openly critical of the current violent environment.

KFOR continues to implement its security stabilisation mission.  The Joint Commission of NATO-Ukraine at the level of Chiefs-of-Staff agreed to bring in the “Joint Guardian” operation, the Ukrainian battalion and the helicopter wing stationed temporarily at the US base in FYROMacedonia.  Apart from the regular mission of peace-keepers, KFOR soldiers too need to exercise new and unexpected roles:  set an example of ethnic, religious, and racial tolerance to children and their parents in Kosovo; prepare houses for winter; fix schools; urbanise Kosovar life; solve complicated human conflicts, etc.  As President Clinton told US armed forces in the province when visiting Camp Bondsteel in Kosovo on 23 November, their job now is to help the Kosovars win the peace following NATO’s military victory.

President Clinton also urged former refugees from the Kosovo conflict to forgive the Serbs who expelled them, saying the time for fighting is past.  During a meeting of the US President with Bernard Kouchner, the special representative of UNMIK and head of the Kosovar Transitional Council, that includes both Serbs and Kosovar Albanians, it was announced that a new generator of electric power in the province has led to production of more electricity than at the same time last year when Kosovo was a functioning entity within Serbia.  Expectations are to triple electric production.  Despite reopening of the schools and the start-up of lessons to teach children in their own language, there are still 200 schools to be repaired.

UNMIK is now present in 29 municipalities.  However, the latter need more personnel to assume and expand their presence in many places.  A modest banking system has been started with UNMIK support in the province with the first bank to open soon.  The first of seven Internet information centres in Kosovo was opened in Ferizaj, Kosovo.  It will serve as a technology- and media-training facility, providing Kosovars with free Internet access.

About 70 percent of Kosovo winterisation is complete.  No people are expected to freeze, though more work on housing the population remains to be done.  The vitality of the Transitional Council and the local administration are crucial to transfer decision-making power to local people.  Clearly the international community should not run Kosovo as a perpetual protectorate.  For this reason, efforts should be made to step up voter registration and elections.  However, at this point, raising the degree of autonomy and self-government in Kosovo is more important than dealing with the status of the province.  This is definitely a future issue, and elections should be focused on improved municipal governance and cooperation with UNMIK.

2. Post-war rehabilitation of Bosnia and Herzegovina.

The Security Council met with the three-member Joint Presidency of Bosnia-Herzegovina in a formal meeting intended to focus attention on progress made toward realising the integrated, multiethnic nature of that country.

The meeting was the first time that all three members of the Joint Presidency met the Security Council together.  The Secretary-General previously met the Joint Presidency when he visited Sarajevo.

The Joint Presidency presented on 15 November to the Council a declaration on which they worked until 14 November and which they call the “New York Declaration”.  In it they re-affirmed their commitment to the Dayton Peace Accords, noted progress made since then, and condemned all forces that advocate “ethnic hatred and division”.

The event marked the fourth anniversary of the Dayton Peace Accords and generates hope that Bosnia will ultimately become a unified, single, and democratic country.  Yet the institutions of statehood need to be further reinforced as pointed in the declaration by accelerating the return of refugees, establishing a state border service, issuing one type of passport, and setting up a joint staff for the presidency.  A Bosnian democratic state would also require a more transparent presidency, promoting the rule of law and weeding outcorruption.

The NATO-led peacekeeping force in Bosnia will be reduced by one third to 20,000 members by April 2000.  Continued absence of armed hostilities, increasing numbers of returning refugees, and greater freedom of movement in the country has allowed SFOR to be scaled down without jeopardising peace.  The reduction would save SFOR nations and NATO substantial amounts of money.  Currently, 30,000 troops from about 40 countries supervise peace in Bosnia after the 1992-95 war, down from 60,000 just after the war.  The SFOR mandate has not changed.  SFOR would still have the capability of bringing additional forces into the country quickly if required.  The UK Ministry of Defense (MoD) has already announced that its contribution to SFOR will be scaled down from 4,200 to around 3,300 by the end of 1999.

III. The National Perspectives of the Balkan Countries:  Specific Issues

1.  Albania

The new 30-year-old prime minister of Albania, Ilir Meta, reinstated key ministers of foreign affairs, interior, finance, and defence.

2.  Bulgaria

The highlight of the last month was the historic visit of President Bill Clinton to Sofia on 21-23 November – the first visit by a serving US president in office to Bulgaria.  This visit was in support of the present Bulgarian government and president.  The United States  ealises that the slow reform process in Bulgaria has been largely caused by the wars in Bosnia and in Kosovo.  The position Bulgaria elected to take during the Kosovo crisis in full support of NATO was the watershed that finally changed the American attitude toward Bulgaria.  The experience of Bulgaria’s bilateral relations with NATO and the USA changed attitudes in Sofia itself:  Bulgaria no longer considers itself dependent on its march to NATO by the experience of the three newcomers in the Alliance.  Bulgaria’s self-perception is of a loyal ally of NATO without having formally applied for membership.  This self-confidence is vital for the continuation of on-going reforms and for further stabilisation of the Balkan region – an asset Bulgaria earned by persistent efforts throughout the 1990s, despite the long hardships of internal transition.  Bulgaria earned the reputation of an ethnically and religiously tolerant society and nation – a much-needed example in the centre of the conflict-rich Balkans.

A new cordial relationship with the American superpower and people does not replace a traditionally positive affection of the Bulgarians towards Russia and the Russian people.  There are doubts in many Bulgarians’ minds that the present Russian elite would tend to read in a zero-sum way the country’s pro-Western and pro-American foreign-policy and social-economic orientation.

The prime minister and other members of the cabinet met in November with some of the leaders of the 15 EU member-states.  Bulgaria’s insistance on getting an invitation to start accession negotiations with the Union without any pre-conditions in early 2000 was accepted by the EU Commission after reaching a compromise on the schedule of closing four out of six reactors at the Kozloduy nuclear power plant between 2003 and 2006.

3.  Croatia

Starting 26 November, the 69year-old Speaker of Parliament, Vlatko Pavletic, replaced for the next 60 days 77-year-old President Franjo Tudjman, who has been in a coma for days.  Parliamentary elections will be on 3 January 2000.  These elections are expected to largely define the future of the country.  There are no clear indications at present of a genuine political will to join the EU on the part of the ruling party.  State-controlled media, authoritarian political style, disrespect for human rights and Serb minority rights, no meaningful market economy reforms, and violations of the Dayton peace agreements add to the anti-Western file.

SFOR found evidence of Croatian security services involvement in efforts to sabotage the Bosnian peace settlement and to run organised crime in Bosnia.

4.  Federation of the Republic of Yugoslavia (FRY)

On 15 November 11 opposition parties signed an agreement on an election alliance with the opposition Union for Change.  The agreement will become effective if the country’s Parliament approves of having early general elections.  Parliamentary elections are due in Serbia in 2001, and the next presidential poll is scheduled for 2002.

The head of the ICTY pledged to work tirelessly for the arrest of its most wanted men – Yugoslav President Slobodan Milosevic and former Bosnian Serb leader Radovan Karadzic.  Judge Claude Jorda, the new president of the ICTY, said it was essential that those charged with stoking almost a decade of Balkan conflict face their accusers in court.  UN prosecutors indicted Milosevic in May for alleged atrocities in Kosovo.  Karadzic and military leader Ratko Mladic were charged in 1995 for crimes in Bosnia, including genocide.  They, along with 30 other accused, remain at liberty.

5.  FYROMacedonia

Boris Trajkovski, supported by the ruling VMRO-DPMNE and the Party of the Democratic Progress ( with major Albanian membership) was elected on 14 November as  president of the young state.  He will replace Kiro Gligorov, the first president of the republic and a former member of the political leadership of the Union of Yugoslav Communists.  A dubious political legacy of Gligorov is inherited by Trajkovski.  It includes a policy of restraint that added to the stability of the region, but also the unwillingness of Gligorov’s political party to accept the election results.  Part of this legacy is a policy of hatred and obstruction to Bulgaria while warm to hot ties with Belgrade have for years been degrading the sovereign status of the republic.  The other participant in the presidential contest, Tito Petkovski,  a member of Gligorov’s party, has been part of Belgrade’s intelligence services, rising to the rank of major.

OSCE and other international observers have confirmed the normal and legal way of electing the new President of FYROMacedonia.  Mr. Trajkovski is a Protestant and pro-Western in his political orientation.  However, the high court of this country decided on 27 November to nullify the votes cast in about 10% of the election polls.  This endangers the present election results and may provoke ethnic tensions in the Albanian population, whose electoral choice has been questioned by the court’s decision.

6.  Romania

Romanian President Emil Constantinescu’s third year in office was marred by growing popular discontent.  Miner-led riots as well as industrial and student protests in recent weeks were sparked by plummeting living standards.  Romania has been starved of much-needed foreign capital investments, and the restructuring and privatisation of inefficient state industries have been delayed by recurrent rows within the centrist coalition government.

IV   Bilateral and Multilateral Relations in the Balkans.  Regional Initiatives

1.  Bilateral Relations

a)  Greece-FYROMacedonia

A founding ceremony was given on 10 November to start a 220-km crude-oi -pipeline linking Skopje and Thessaloniki.  The pipeline is the second part of a total  $182-million deal between the neighbouring countries, which also includes upgrading FYROMacedonia’s OKTA refinery and development of a retail distribution network by Hellenic Petroleum.  The project is the largest foreign investment in FYROMacedonia and a step toward its European integration.  Greece’s penetration of its northern neighbour’s oil sector as a strategic investor is expected to yield mutual benefits, both political and economic.

b)  Greece-Bulgaria

In a 15 November letter Prime Minister Simitis wrote to his Bulgarian counterpart that Greece will insist  that EU authorities support clearance of war debris in the Danube river.  Earlier in Novemberthe two prime ministers met in Sofia and checked implementation of the Burgas-Alexandroupolis oil pipeline project and construction of the checkpoint at Makaza.  The latter, according to Prime Minister Kostov of Bulgaria is delayed without reason by the Greek side.

c)  Bulgaria-FYROMacedonia

(1)  The Bulgarian Government decided on 11 November to donate all facilities of the Bulgaria-run refugee camp in Redusha to Skopje.  (2)  The two countries’ ministers of education agreed on 4 November to recognise higher education diplomas as mutually valid.  (3)  Prime Minister Kostov told the media on 19 November he will invite Mr. Tito Petkovski, the second presidential contender, and discuss with him the meaning of his supporters’ rally slogans calling for ‘death of the Bulgarians’.  (4)  Prime Minister Kostov presented Prime Minister Liubcho Georgievski’s appeal to President Clinton during the US President’s visit to Bulgaria on 22 November.  This document reflects the disappointment of the people of FYROMacedonia at the lack of any practical progress in implementing the Pact of Stability for South-East Europe – an attitude shared by the Albanians and the Bulgarian government.

d)  Bulgaria-FRY

(1)  The leader of the Serbian opposition Social Democratic Party, Vuk Obradovic, visited his Bulgarian counterparts in Sofia on 5 November.  (2)  The Serbian opposition leader Zoran Djindjic visited the mayor of Sofia on 20 November.

e)  Bulgaria-Romania

(1)  No nearing of positions on construction of a second bridge across the Danube occurred after the bilateral meeting of the presidents of the two countries, Stoyanov and Constantinescu, in Borovets, Bulgaria, on 5 November.

Newly sprung Romanian designs call for construction of the contested bridge at Nikopol-Turnu Magurele as part of a hydro-technical facility that would cost $2 billion.  Apart from its high costs, this project could cause devastating damage on the river’s Bulgarian coast.  Another Romanian suggestion was made to have a third bridge become part of a deal between the two countries.  Meantime mayors of the Bulgarian town of Vidin and the Romanian town of Kalafat sent a joint letter to the US president on 16 November seeking his support of a second bridge as part of European transport corridor 4, a project demanded by the Bulgarian Government.

A second functioning bridge across the Danube in the river’s western section in Bulgaria requires a compromise.  The bridge would offer many positive benefits for all Balkan and Central European countries, for developing trilateral regional cooperation in the adjacent Romanian, Serbian, and Bulgarian territories, for improving the Bulgarian national-security posture as well as that of security stability in the peninsula.

(2)  Bulgarian and Romanian environmental ministers said in Sofia on 23 November they plan to ask Western creditor countries to forgive them some of their debts in exchange for a promise to spend the equivalent on environmental projects.  They also signed a protocol on bilateral cooperation.  The two countries will join forces next year to try to attract funding to fight industrial pollution, protecting the air and the waters of the Danube.

(3)  A top priority contingency of the National Civil Defence and Emergency Agency is to counter the consequences of a malfunctioning nuclear plant in Romania.  The major reason for these contingency plans is the Romanian nuclear plant’s location in the midst of two highly intensive earthquake zones – the Vrancha and the Shabla areas.

2.  Multilateral Relations

1)  Trilateral cooperation of the finance ministers of Albania, Bulgaria, and FYROMacedonia

The Bulgarian finance minister presented the common priorities agreed between the three countries on 2 November at the two-day conference for reconstructing South-East Europe within the context of the Pact of Stability for the region in Thessaloniki, Greece.

2)  Regular trilateral meeting of the leaders of Bulgaria, Greece, and Romania

The meeting of President Stoyanov, Prime Minister Simitis, and President Constantinescu was held on 5 November in Borovets, Bulgaria.  They agreed that the Pact of Stability for South-East Europe is not yet working.  They confirmed their pledge to cooperate in efforts to integrate the Balkans into European and Euro-Atlantic institutions.

3)  Multilateral cooperation between countries interested in Transport Corridor 10

During the last week  of November, representatives of Austria, Slovenia, Croatia, FRY, FYROMacedonia, Greece, Bulgaria, and others met in Thessaloniki to discuss continuing the project to link Salzburg, Austria, and Thessaloniki, Greece, by road and railway.

3.  Regional Initiatives

The South-East Defense Ministers group (SEDM) met on 30 November in Bucharest.  It is a partnership between four NATO countries – the USA, Italy, Greece, and Turkey — and five partner countries – Slovenia, Albania, FYROMacedonia, Bulgaria, and Romania.  After the launch of the Multinational Peace Force South-East Europe (MPFSEE) in 1998, two additional activities were approved:  an engineering-type task force that will consist of on-call components from different partner countries which can undertake activities in the area, and second, a Crisis Information Network.  It will keep track of needs and will be used in a crisis to respond to humanitarian and natural disasters.  It will be an Internet-based network.

V   The Economic Situation of the Balkan Countries and the Region

1.  Albania

The IMF expects Albanian inflation to fall to around zero by the end of 1999, far below the original 7% target.  There was a huge influx of hard currency during the Kosovo crisis when Albania sheltered more than half a million refugees.  The Albanian government is expected to increase investment and reduce its own expenditure to maintain this year’s GDP growth in 2000.  The US Senate agreed on 3 November 1999 to extend permanent trade privileges to Albania within the “normal trade relations” status (formerly called ”most favoured nations” status).  The USA has already agreed to support Albania’s bid to join the WTO.

2.  Bulgaria

(1)  The NPP at Kozloduy is fully prepared for the Y2K bug.  The US ambassador cancelled an evacuation plan in the embassy after a visit to Kozloduy and making sure the NPP is fully Y2K ready.  (2)  The Economist Intelligence Unit sees Bulgaria’s GDP growth stand at zero in 1999, followed by 3% growth in 2000 and 3.5% in 2001.  These are the latest updated forecasts of the expert group for Bulgaria.  The industrial and export slow-down characterising the second half of 1999 is being slowly overcome.  (3)  Several assistance initiatives were outlined on the eve of President Clinton’s visit to Bulgaria:  programmes to give Bulgarian businesses access to financing through the Exim Bank to purchase US goods and services on credit terms from 180 days to 5 years; $25 million from the US Agency for International Development (USAID) to help Bulgaria make payments on its debt to the USA and international financial institutions; $7 million USAID programme to train new judges and establish a model pilot court programme in Bulgaria; a $150-million investment fund administered by the US Overseas Private Investment Corporation (OPIC) to invest directly in regional businesses, etc.

3.  Greece

The IMF yearly report says Greece is on the right track to bring the country to the Euro-zone by 1 January 2001.  Greece is expected to register 3% GDP growth in 1999, and inflation will drop from 4.5% in 1998 to 2.3%.

4.  Romania

The Finance Ministry plans to cut corporate income tax from 38 to 20% and slash value-added tax from 22 to 16% in 2000.  Direct exports by producers would be tax-exempt, and firms creating new jobs would be exempted from taxes on wages.  The fiscal package is also aimed at improving the business environment and easing the tax burden on companies trying to survive in Romania’s fledgling economy.  According to ‘The Economist’, Romania rates in the back ranks in terms of reliability for foreign investment.

5.  Turkey

Structural reforms and fiscal discipline are among conditions set by the IMF for conclusion of a stand-by agreement.  The GDP, which shrank by about 2% in 1999, is expected to reach 5.5% in 2000.  The Turkish draft budget foresees a drop in wholesale inflation from 57% at the end of 1999 to 20% in 2000.

6.  ‘Balkans Recovery Plan’

A five-year plan on economic restructuring of the Balkan region worth a total of EUR 543 million was announced by the Greek Minister of Economy Yanos Papandoniu at the international conference on the economic recovery of South-East Europe held in Thessaloniki on 2-3 November.  The Balkan countries affected by the war in FRY should receive compensations extended in installments from the Greek government budget within the next five years.  They will be allocated among Albania (EUR 51 million), Bulgaria (EUR 55.8 million), FYROMacedonia (EUR 46.8 million), Romania (EUR 72.5 million), and Kosovo (EUR 75.5 million) as specified by the minister.  Financial support of DM 241 million is envisioned for FRY in a special appendix to the document in case the sanctions against it are lifted.

VI   The Influence of External Factors on the Region:  National Great Powers and International Institutions

1.  The USA

(1)  On 31 October-2 November 1999 US Commerce Secretary William Daley hosted s ‘Southeast Europe Business Conference’ in Sofia designed to promote US investment in the region and attended by more than 100 US and regional companies as well as key government officials.  Daley said that the Administration wants to hear from business people on how to improve the business climate in the region.

(2)  US President Clinton visited Turkey, Greece, Bulgaria, and Kosovo as part of a longer European tour in the second half of November.

While emphasizing to his Turkish and Greek NATO allies how important links with each of the two countries are for the USA, he also reminded them of the expected moves they had to make in developing stability in the region.  He told his Greek counterparts it was in Greece’s interest to end a long history of conflict with Turkey.  President Clinton warned Turkey that it could not join the European family unless it settled its disputes with EU member Greece and said the future of the two countries depended on a solution to the Cyprus problem.  Furthermore, Turkey cannot be a member of Europe until it solves its differences with Greece.

Developing new sources of energy, expanding bilateral trade, making available $1 billion in loan guarantees to help Turkish businesses rebuild after the earthquakes through the US Exim bank, and achieving progress toward deepening democracy in Turkey, especially in the area of freedom of expression were the accents of the US president’s visit in Turkey.  Despite the intensive anti-American demonstrations upon President Clinton’s arrival in Greece, the two parties confirmed an extensive programme of bilateral co-operation.

This summer the USA took the lead in calling on the UN to convene Cyprus talks.  Together with European allies of the United States and the UN, their efforts led to bringing the two Cypriot sides back to the negotiating table – on 3 December President Cleridis of Cyprus and the Turkish Cypriot leader Denktash will start proximity talks in New York.  The meeting of President Clinton with Prime Minister Ecevit, of Secretary of State Madeleine Albright with President Cleridis, and the shuttle diplomacy of the US President’s Special Envoy, Al Moses, helped achieve this result.

The USA sticks to the position of a bi-communal federal solution of the Cyprus issue while the Cypriot Turk leaders aim at a loose bi-statal confederation.

The visit of President Clinton to Bulgaria and the enthusiastic and cordial reception by the Bulgarians adds another ingredient to the complex US presence in South-East Europe:  bilateral US-Bulgarian relations will tend to become more instrumental in solving the various tangled issues of the Balkan region:  preserving a positive background atmosphere to the two NATO members that need to overcome bilateral tensions; working on strengthening democracy and market economy in Bulgaria but also showing an example to neighbouring Serbia; using the central location of Bulgaria in the peninsula for all-regional projects; working together in extending the civic and security zone to the Black Sea basin, etc.

(3)  US Secretary of State  Albright held talks in Washington, D. C., on 3 November with Serbian opposition activists under the leadership of Prof. Avramovic.  The discussion focused on the strategy of early elections held according to international standards of what is fair, supported by the US Administration too.  Major steps toward revitalising the economy of FRY remains contingent upon holding early free and fair elections.  On 4 November the secretary of state met also President Milo Djukanovic of Montenegro.  They agreed on a common objective: democratic Montenegro within a democratic and reformed Yugoslavia.  Efforts to improve the economic situation of Montenegro are not a prelude to the country’s secession from the federation, said the Montenegrin president.  The US Administration expanded on 12 November visa sanctions on key supporters of Yugoslav President Milosevic’s regime, their families, and close associates.

2.  EU

The EU will fund preparation efforts of Bulgaria and Romania for membership in the Union in the next five years with some $ 6 billion said the President of the EC, Romano Prodi, in Istanbul on 19 November.

3.  OSCE

The OSCE Summit Declaration of 19 November in Istanbul says democratic shortcomings in Yugoslavia are a source of grave concern in the region.  The leaders and people of FRY must put the country firmly on the path towards democracy and respect for human rights and fundamental freedoms.  The declaration said that, when conditions permit, the OSCE would help FRY accelerate democratisation, promote independent media, and hold free and fair elections.  Belgrade’s membership in the OSCE was suspended in 1992.

4.  Russia

At the invitation of Russian Foreign Minister Ivanov, the leader of the Yugoslav opposition ‘Renewal’ movement, Vuk Draskovic, arrived in Moscow and discussed the internal political situation in FRY, including Kosovo.  He also met with former Prime Minister Chernomyrdin and Russian Patriarch Aleksiy II.

VII   The Security Situation and the Region-Building Evolution:  Conclusions

1.  The ‘top-down’ efforts to influence developments in the regional situation intensified in the last month.  Stabilising individual countries of the region – present or future EU and NATO allies — was paralleled by reaching an agreement with the Serbian opposition to insist on early democratic, free, and fair general elections.  EU and USA policy is very much in concert with the that of countries from the Balkan region neighbouring FRY.

A very strong appeal to reverse ethnic hatred in Kosovo was sent by the US president who visited the province.  There are signs of an improving situation in Bosnia and Herzegovina.

The ‘bottom-up’ policy of region-building are still modest in the aftermath of the Kosovo conflict.  Defence co-operation is an important aspect of general improvement in the regional security situation after the end of the conflict.

2.  An American presidential tour in Turkey, Greece, and Bulgaria added momentum and hope for furthering the region-building efforts and putting the region of South-East Europe on the track of modernisation and European integration.  The EU commitment to subsidise substantially the efforts of Bulgaria and Romania to improve their readiness for membership in the Union was another highlight of the last month for the people of South-East Europe.  Similar financial support by the EU is targeted to revitalise the countries and areas that were directly affected by the recent war in FRY.  Restoration of transportation on the Danube will substantially add to the policy of making the Balkan countries self-sustaining and providing more economic stability through their own efforts.