Ulla schmidt (Germany)

Introduction

1. 
   Twenty-five years since the breakup of communist Yugoslavia, the Western Balkans continue to be a case of unfinished business for Europe. While there is general agreement that the future of the region lies in European and Euro-Atlantic integration, the path towards membership was mired by numerous problems, first and foremost, by the remaining – and possibly growing – inter-ethnic cleavages as well as by the lack of substantial socio-economic progress in parts of the region. Granting NATO membership to Albania, Croatia and Slovenia and the upcoming membership of Montenegro has brought a higher degree of stability and security to the region. However, the prospects of integration for the rest of the Western Balkans are bleak. It has to do with the fact that, on the one hand, local politicians are faced with issues that are inherently difficult to resolve such as those of status and constitutional arrangements, and on the other hand, the Euro-Atlantic community itself is weary of further expansion, particularly in today’s international environment with formidable challenges stemming from the East and South-East as well as from the South.
   

2. 
   The purpose of this report is to urge both the Euro-Atlantic community and policy-makers in the Western Balkans to strengthen their commitment to the European future of the region. Failure to achieve further progress towards European and Euro-Atlantic integration could erode popular support for European reforms and fuel the rise of ultra-nationalist forces who offer “simple” solutions, such as the shifting of blame for existing problems onto other ethnic groups. The emergence of new challenges such as the people seeking refuge from the crisis-torn Middle East and the foreign fighter phenomenon threatens to further exacerbate regional problems. At the same time, the refugee and migration challenge also acts as an external factor that forces Balkan nations to overcome their disagreements and increase their cooperation. This is an opportunity that should not be missed.
   

3. 
   Although the prospect of EU/NATO integration is not a silver bullet for all the problems of the Western Balkans, it remains a key vehicle towards achieving sustainable regional stability and development. The following chapters will address a series of obstacles hampering the progress towards integration, ranging from complicated inter-ethnic relations to the weak rule of law and inconsistent socio-economic development.
   

2. Inter-ethnic tensions and status issues

4. 
   Over 20 years after the conclusion of the Dayton Peace Accords that put an end to the deadly conflict in the former Yugoslavia, Bosnia and Herzegovina (BiH) continues to grapple with deeply-rooted ethnic tensions. The country made membership of NATO and the EU its strategic priority. All three members of the Presidency, including a representative of the Bosnian Serb community, have endorsed this objective, although public support for EU membership and especially NATO membership varies considerably across the country’s entities. BiH has officially applied for EU membership. The country was also offered a NATO Membership Action Plan (MAP) in 2010, pending the resolution of a key issue concerning immovable defence property.¹
   

5. 
   However, political cleavages between political leaders of the three main ethnic groups in BiH remain prominent and may possibly deepen, hampering the country’s progress towards EU (and NATO) standards. Political leaders in BiH, both in Sarajevo and in Banja Luka, have not been able to fully abandon narrow nationalistic rhetoric and adequately focus on the implementation of much-needed reforms. Political parties established on a multi-national basis, so-called “civic parties”, are losing popular support and were defeated at the local elections in October 2016. According to the 2013 census, less than 4% of the population identify themselves as generic “Bosnians”.
   

6. 
   The Republika Srpska (RS), under the leadership of President Milorad Dodik, has launched some initiatives and made statements designed to defy Sarajevo and the Office of the High Representative² to emphasise the sovereign nature of the RS entity. In 2015, President Dodik announced that the entity would hold a referendum on whether or not BiH state court has authority over RS citizens. Bowing to international and domestic pressure, Mr Dodik later agreed to postpone the referendum. Nevertheless, RS leadership has announced a new referendum on 25 September 2016 on the issue of making 9 January a national holiday in RS. This is an ethnically-divisive issue due to the day’s associations with the secessionist ambitions of Bosnian Serbs. Besides, the Constitutional court of BiH had previously ruled against making this day a public holiday. Lacking the support of the Peace Implementation Council (PIC), an international body overseeing the implementation of the Dayton Agreement, High Representative Valentin Inzko refrained from using his powers to stop the referendum. On 17 September the Constitutional court of BiH suspended the planned referendum. However, the rulings of the Constitutional court of BiH are essentially ignored in Banja Luka, and the 25 September referendum took place regardless. The results of the referendum showed an almost unanimous support (99%) for keeping 9 January as a national holiday, but the turnout was modest – only 56%. While the referendum was not about the secession of RS, it will certainly result in even greater tensions between Bosnian Serbs and the rest of BiH. The lack of a resolute reaction from PIC and the Office of the High Representative could encourage further attempts to challenge the Dayton system.
   

7. 
   In addition, the RS leadership still entertains initiatives such as the abolition of the House of People’s chamber in the RS National Assembly (which plays a key role in protecting non-Serb ethnic groups in the entity). Furthermore, Mr Dodik suspended cooperation with BiH security services and opposed the initiative to create a state-wide anti-terrorism coordination mechanism. He also nurtures close relations with Serbia’s Prime Minister Aleksandar Vucic, which causes considerable irritation in Sarajevo, but might also offer opportunities for Prime Minister Vucic to exert a positive influence on his RS neighbours. Vucic refused to support publicly the 25 September referendum in RS.
   

8. 
   The noticeable intensification of anti-Sarajevo policies by the RS leadership can be partially explained by the growing economic difficulties in the entity. In particular, the banking sector in RS is experiencing major problems. Defiance vis-à-vis Sarajevo could be regarded as a means to mobilise popular support for the current RS leadership by exploiting nationalist sentiments. It is noteworthy that main opposition parties in RS criticise the hardline stance of President Dodik and argue in favour of a much more constructive approach towards Sarajevo. The fact that Mr Dodik’s opponents in RS are members of the ruling coalition in Sarajevo also explains the tensions between Sarajevo and Banja Luka. The convincing victory of Mr Dodik’s party in the October 2016 local elections is likely to boost the confidence of Banja Luka vis-à-vis Sarajevo.
   

9. 
   In terms of BiH integration into NATO and the EU, RS leadership has essentially been given the right to veto. The EU originally identified pre-conditions for the country’s further progress towards accession, including making changes in the Constitution to comply with the Sejdic-Finci ruling³; adopting legislation on state aid; applying the population census law at state level⁴; and introducing a fully functioning inter-institutional coordination mechanism for European integration policies.
   

10. 
    BiH managed to adopt a law on state aid and conducted a census in 2013. However, due to inter-ethnic sensitivities, publication of the census results has been postponed for three years. They were eventually released by the Bosnian Statistical Agency in June 2016. The publication elicited strong reactions, notably from RS politicians, who refused to accept the results citing methodological disagreements. Indeed, the first headcount conducted since the Yugoslav era indicated that Bosniaks now form more than 50% (50.11%) of the population in a country where peace mostly relies upon the principle of balance of the three “constituent peoples”, i.e. Bosniaks, Serbs and Croats. Serbs make up 30.78% and Croats 15.43% of the population. The census also revealed that the ethnic groups have concentrated in their respective entities: 92% of BiH Serbs live in RS; while a similar number of BiH Bosniaks and Croats reside in the Federation entity.
    

11. 
    With regard to the EU integration process more specifically, the failure to adopt amendments to the Constitution that would ensure compliance with the Sejdic-Finci case had, until recently, practically frozen the process. BiH politicians, especially leaders in the RS, were resisting these amendments, fearing that the revision of the Dayton system might infringe the rights of the ethnic groups they represent. The frustration over the country's lack of progress led to a series of riots in early 2014.
    

12. 
    To break the deadlock, the German and UK governments launched an initiative in November 2014 whereby the Sejdic-Finci ruling precondition would be dropped in return for the clear commitment of BiH leaders to pursue an ambitious reform agenda. The initiative did give new impetus to the integration process and encouraged the new Bosnian leadership, which came to power after the 2014 elections, to embark upon a series of reforms. The BiH-EU Stabilisation and Association Agreement entered into force in June 2015, and, in February 2016, BiH, encouraged by a positive European Commission report, officially applied for EU membership. Further progress was derailed by the fact that RS leaders refused to accept what they consider to be the unilateral and secretive adoption of mechanisms designed to coordinate the activities of various BiH institutions in pursuit of EU membership. However, on 31 July 2016, leaders of the largest Bosniak and Serb political parties overcame their disagreements. RS leaders agreed to the proposed mechanism to coordinate the activities of various BiH institutions in pursuit of EU membership and approved a national transport strategy. The Bosniak leaders also made some concessions of an economic nature. The agreement sent a positive signal to the international community and could lead to the approval by the IMF of a three-year EUR550m loan agreement for BiH, which could well help to stabilise the country’s economy.
    

13. 
    The NATO integration process has not shown the same success mainly because of limited progress on the defence property issue. While defence reform in BiH has possibly been the most successful reform in the country (unified armed forces – at regimental and higher levels – have been created, and inter‑ethnic relations within this sector have been exemplary), there are few new positive developments to report in this sector. The armed forces lack proper equipment, especially helicopters. The defence budget is very small (less than 1% of GDP), but even these funds are not spent fully due to a cumbersome procurement process. There is no political agreement yet on the new defence review, namely on its chapter discussing the structure of the armed forces.
    

14. 
    As regards to immovable defence property, by early 2016, only 23 out of 63 sites had been fully registered, all of them in the territory of the Bosniak-Croat Federation, and none in the territory of the RS. Clearly, this rather technical issue has been heavily politicised by BiH politicians. During a recent committee visit to BiH, the NATO PA delegation discussed two options for resolving this stalemate. First, the process of registration in the RS is currently on hold pending a court case regarding one of the sites: Han Pijesak. If the ruling is in favour of Sarajevo’s position, and provided it is implemented, this could end the deadlock. Second, during the visit, several local as well as international interlocutors argued that NATO could help unlock the current stalemate by following the EU’s example and revisiting the preconditions for furthering the BiH integration process. Namely, Alliance leaders should consider lifting or reinterpreting the precondition of registering immovable defence property. In addition, allowing Sarajevo to activate the MAP would have a positive spill-over effect on other reform initiatives in the country. Nevertheless, the part of the Warsaw NATO Summit declaration dedicated to BiH retained the requirement to register all defence property as a precondition for activation of the MAP.
    

15. 
    Relations between the Bosniak and Croat communities within the Federation entity have improved considerably in recent years. The issue of a third (Bosnian Croat) entity has effectively been put on the back-burner. Minor disagreements, such as the disagreement over the local electoral code in Mostar, are being addressed in a constructive manner. Nevertheless, while visiting BiH in March 2016, members of this NATO PA Committee heard informal complaints that the Bosniak leaders have been overly concentrating power in Sarajevo without proper regard for the legitimate interests of other ethnic communities, especially ethnic Roma and Jewish citizens.
    

16. 
    The unresolved situation over the status of Kosovo and within Kosovo itself (between the Kosovo Albanian and Kosovo Serb communities), will inevitably have implications for the European integration aspirations of Belgrade and Pristina. The milestone April 2013 "normalisation" agreement signed by the then Prime Ministers Ivica Dacic and Hashim Thaci, unlocked the EU integration process by temporarily sidelining the status issue and focusing on practical deliverables in the mid-term. The accord was followed up by the signing of four key agreements on 25 August 2015, namely on energy, telecoms, the movement of people across the Mitrovica bridge, and, crucially, the establishment of the Association/Community of Serb majority municipalities (ASM/CSM) in Kosovo. If a lot has yet to be done in order to ensure the implementation of these four agreements, much progress has been made with regard to the Mitrovica bridge. Renovation works started in August 2016 and the bridge is expected to fully reopen in January 2017. Also, an important agreement has been reached between Belgrade and Pristina on reciprocal recognition of car licence plates, which will facilitate the free movement of people between Kosovo and Serbia (proper).
    

17. 
    The question of the establishment of the Association/Community of Serb majority municipalities in Kosovo has proved contentious to implement. Kosovo authorities are concerned that the agreement would grant the “Association/Community of Serb majority municipalities in Kosovo (ASM/CSM) the status of a legal entity and provide for the possibility for Serbia to directly fund them”. Opposition parties in Pristina as well as international experts, such as representatives of Friedrich Ebert Stiftung in Pristina, argue that the establishment of the ASM/CSM allows a third level of governance, which does not currently exist in Kosovo. This would grant the Serb minority in Kosovo extra privileges and powers in comparison with other communities in Kosovo. Kosovar laws already provide the possibility for inter-municipal cooperation and for financial support from Serbia towards Serb majority municipalities; these municipalities can also create other specific interest associations for their population. In November 2015, Kosovo’s Constitutional court suspended implementation of the agreement. Thousands of anti-Serbian demonstrators gathered in Pristina calling for early elections and demanding the government to withdraw from the agreement with Belgrade. They also demanded that the government scrap the recent border agreement with Montenegro.⁵ The riots turned into a protracted political crisis in Kosovo with the opposition supporting the protesters’ demands. The establishment in July 2016 of a working group responsible for drafting the statute of the ASM/CSM helped move the situation forward. A different type of issue between Pristina and the four northern – predominantly Serb – municipalities of Kosovo is the reluctance of the latter to conduct the population census on their territories. Northern municipalities boycotted the Kosovo census in 2011 and are resisting Pristina’s plans to conduct the census in these municipalities in late 2016.
    

18. 
    The peculiar name dispute with Greece continues to hold the former Yugoslav Republic of Macedonia⁶ back from making progress towards EU and NATO membership. Despite receiving the MAP in 1999, the country’s membership in the Alliance has still not been realised. Attempts to find a solution are regular, but have not led to tangible results. However, the dynamics started to change in 2015. The economic challenges, and challenges related to refugees in the region, require both Athens and Skopje to seek genuine rapprochement. The foreign ministers of both countries exchanged visits for the first time in years, the most recent one taking place in Skopje in August 2016. The former Prime Minister Nikola Gruevski did announce in the past that his government was ready to discuss the possibility of modifying the country’s name, provided that any agreement with Greece on this issue were then ratified by a referendum in his country, but these statements have yet to be translated into concrete proposals. There is also a line of thought that the name issue could be a starting point for negotiations that could lead to a way out of the political crisis, whereby internal and external stakeholders could agree on a series of compromises. Nevertheless, even though the name issue remains, the talks are a fundamental prerequisite to normalising relations between the two countries at a time when the region is facing many challenges.
    

19. 
    Current political turmoil in the former Yugoslav Republic of Macedonia has also brought up questions about inter-ethnic relations within the country. The policies put in place by the former Prime Minister, Mr Gruevski, to bolster national identity by, inter alia, decorating Skopje with statues of national heroes, have been causing some tension between Slavic and Albanian populations for years. It culminated in deadly clashes between the police and an armed group of ethnic Albanians (from within the country as well as from Kosovo) in the northern town of Kumanovo in May 2015. However, political leadership has been faithful to the 2001  Ohrid Framework Agreement, which accommodated the demands of the Albanian minority (more than a quarter of the country’s population) and prevented an inter-ethnic conflict. There has been an unwritten rule that an ethnic Albanian party that receives the most votes in a general election is invited to join the ruling coalition. The pattern might be changing now as pre-election coalitions between various ethnic parties are being formed. In general, the Kumanovo incident does not seem to have caused a rift between the ethnic majority and minority. Nevertheless, low-level incidents periodically occur, such as protests by ethnic Albanians against the construction of Orthodox crosses in predominantly Muslim communities or discontent by the ethnic majority group due to the decision of an Albanian-majority municipality to place a large statue of an Albanian eagle on a prominent street of that municipality. Also, a new Albanian political party – LR-PDSH – which was formed in 2015, calls for decentralisation of the country and the use of the Albanian language at all levels of government.
    

3. 
   
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