House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Fourth Report

KOSOVO: THE REGIONAL DIMENSION

286. The Stability Pact for South Eastern Europe was signed on 10 June 1999 in Cologne by the countries of south east Europe, the EU and the G8, as well as the representatives of a wide range of international organisations. The Pact aims to achieve "lasting peace, prosperity and stability for South Eastern Europe...through a comprehensive and coherent approach to the region."[701] The Foreign Secretary told us that "the Stability Pact will act as a clearing house and co-ordinating role and, also, hopefully, will act as a stimulus to activity by international agencies."[702] Dr Woodward described the Pact as "a mechanism for strategic co-ordination...trying to rationalise all the factors that are now on the ground, to eliminate some, to try and spend money better."[703] Mr Bodo Hombach, the Special Co-ordinator of the Stability Pact, explained that the Pact aims to overcome the traditional patron and client relationship between countries of the region and richer countries—relationships which had encouraged competition between Balkan states rather than co-operation. Under the Pact, assistance will be given in accordance with common values, and on the basis of strict conditionality.

287. In order to advance its work, the Pact has established three working "tables" which bring together the various priorities for work in the region, and, in a manner reminiscent of the CSCE, create linkages between the areas of work, so that, for example, a country will only make progress with economic assistance if there is progress on human rights. The three tables are:

Democratisation and human rights.

704

Economic reconstruction, development and cooperation. Economic projects are being pushed forward in parallel by several bodies: the European Commission is addressing integration into European structures; the World Bank has produced a comprehensive strategy on development; the European Investment Bank and EBRD have reviewed potential projects; the OECD is drafting an Investment Compact; and a Business Advisory Council has been launched.

Security issues. This table covers two sub-tables of justice and home affairs, and defence and security affairs. The first sub-table covers issues such as the fight against organised crime and drugs, and establishing European standards in legislative reform. The second sub-table covers issues such as increasing transparency in defence planning and de-mobilisation, and arms control and non-proliferation.

The Pact has claimed some concrete successes as part of these processes, which involve a series of meetings, conferences and papers. For example, according to Mr Hombach, on 8 February a long-running dispute between Bulgaria and Romania over the location of a bridge across the Danube was resolved following an initiative under the Stability Pact.[705] When constructed, the bridge will form an important part of a transport corridor to south eastern Europe.

288. There are, however, great challenges for the Stability Pact in attempting to ameliorate the political and security situation in South Eastern Europe:

the aftermath of several wars has left large numbers of refugees and displaced people, potentially forming the basis for future conflict;

there is an absence of the rule of law to greater or lesser degrees across the region.

As we discuss below, Serbia in particular represents a serious obstacle for the Pact.[706] Despite the _8 billion the EU and its Member States have spent in the region since 1991,[707] there are also serious economic difficulties:

708

709

most countries in the region have large trade deficits (50 per cent of GDP in Bosnia, despite $5 billion aid in the last four years, 12 per cent of GDP in Albania);

unemployment ranges from 40 per cent in Bosnia to 35 per cent in Macedonia and 10 per cent in Romania. War, an unstable macroeconomic environment, and microeconomic obstacles have created a poor climate for business;

large and unsustainable fiscal deficits have been compounded by underlying problems of tax collection, as well as civil unrest and war. These deficits range from 7.5 per cent of GDP in Albania to 4.1 per cent in Romania.

289. There have been a number of criticisms of the Pact's performance in dealing with this difficult situation—although this evidence was received before the Stability Pact Financing Conference, held on 29-30 March in Brussels. Dame Pauline Neville-Jones told us that "on the Stability Pact, I have to say that I think on its present trajectory and as presently organised and managed it is going to be something of a busted flush...I think it can be revived...I do think it has to be managed differently from the way it is at the moment."[710] Along similar lines, Professor Roberts told us: "the Stability Pact, frankly, is not going well. Here is the major effort made by the European Union to address the problem of South-East Europe generally, including Kosovo, and so far there is very, very little evidence of any achievement, and not much sense of dynamism behind it, and something, in my view, needs to be done to put new life into the Stability Pact."[711] One of the problems which the Pact has faced has been the expectations which were generated at its launch: according to Mrs Roberts it was "heralded almost as though it was going to be a New Deal" which she felt had led to disappointment.[712] In Dr Woodward's view, there was "no strategy behind it" and that the method of inviting "a number of small projects and you will try and find financing for them" was unlikely to be successful.[713] The Council of Europe Parliamentary Assembly recently adopted a report which, while welcoming the concept of the Stability Pact, stated that "the present structure of Working Tables and Task Forces, together with an influx of seminars on related topics, risks delaying the implementation of the Stability Pact and therefore threatening the process of democratisation and restructuring of the region. Furthermore it diminishes the high expectations of the peoples concerned by the Pact."[714]

290. The resources of the Pact to meet the challenges it faces are limited. The Pact exists as a document, and also as a small institution of 28 staff based in Brussels. Mr Hombach is technically a special representative of the Council of the EU, but in practice, his remit is to co-ordinate the activities of international bodies which go beyond the EU. Mr Hombach told us that he had enough staff, but doubts must remain about the capacity of such a small and newly established institution to co-ordinate twenty-six governments and large and wealthy financial institutions, with their own particular traditions and methods of operation, such as the IMF. One important example of this is the restriction which the IMF, the EBRD and EIB have had on providing assistance to Montenegro: we discuss this above.[715]

291. Mr Hombach himself told us in advance of the meeting that the Stability Pact's financing conference, held in Brussels from 29-30 March 2000, was a moment of truth for the Pact. In terms of its own targets, the conference appears to have been a success. _1.8 billion was Mr Hombach's target for "Quick-Start" projects (for which tenders should be awarded by 31 March 2001): at the conference _2.4 billion (£1.47 billion) was pledged, with most of the money allocated to infrastructure spending and democratisation and human rights.[716] Projects approved were required to have a regional dimension, rather than only relating to one country in the area: examples include the Montenegro Transport Rehabilitation Project, and the Blace Border Crossing (Kosovo/Macedonia).

292. However, not all of the money pledged at the conference was new money: there are no figures available for how much of the money pledged formed a part of existing commitments by financial institutions and countries. The Financial Times argues that the United Kingdom is simply redirecting existing Balkan aid programmes. Rather disingenuously the Government has informed us that "the Pact Co-ordinator has not yet been able to make available a detailed break-down of commitments, e.g. identifying those which represent 'new money.'"[717] We are puzzled by this explanation. It is to be hoped that the Government is aware whether its contribution represents 'new money' or not. The Financial Times has also stated that it is unclear how much of the US allocation of $350 million is new money: it is in any event linked to the size of the EU contribution. The two exceptions to this pattern of old money presented as new are Germany, which has promised an extra DM1.2 billion (£374 million) and the European Commission, which has increased its Balkan allocation from _300 million to _1.3 billion.[718] In return for the funding, according to the Pact, "the countries of the region have indicated their commitment to ambitious plans for reform."[719] We recommend that the Government should inform the Committee in unambiguous terms how much of the £100 million it has promised for the next three years for the Balkans is new money, and how much had already been announced.

293. The FCO informed us that "the model for the future of the Western Balkans is the example of Western Europe. Post-war reconciliation there was an evolutionary process, leading from political commitments through cooperation in trade to agreement that prosperity and security could be guaranteed in the long term only through promoting political and economic inter-dependence."[720] Post-war Western Europe represents an inspiring example for the Balkans, and the model of development presented by the FCO is an appealing one. However, one element is missing from the FCO's description of the situation in post-war Europe: the Marshall Aid plan. While the Stability Pact was initially billed in terms of being a Marshall Aid plan for the Balkans, this description has not subsequently been played up. The reasons for this are clear: the Stability Pact does not represent anything like the same commitment of resources to the Balkans as was committed to Western Europe after the war by the USA. The USA spent a total of around $130 billion in today's money (around _136 billion) on Marshall Aid for Western Europe between 1948 and 1951—roughly 1.3 per cent of its annual GDP at the time.[721] Even if the smaller size of the Balkan economies is taken into account, it is evident that the description of the Stability Pact as a Marshall Plan for the Balkans is inappropriate.

294. The _2.4 billion pledged for projects in the next year at the recent Stability Pact financing conference represent around 0.03 per cent of the EU's GDP. Financing Balkan reconstruction is not the exclusive preserve of the EU, and if the USA's GDP is included in the calculation, current pledges fall to 0.015 per cent of GDP. Of course, the "Quick Start" money was pledged only for the next year. For the longer term _11 billion (£6.8 billion) is planned for130 regional investment schemes for Table 2,[722] as well as _6 billion pledged by the EU separately for Romania and Bulgaria.[723] This represents 0.2 per cent of the EU's GDP: that is to say, less than a sixth of the amount allocated to Marshall Aid by the USA. Thus the fact that expectations were exceeded at the financing conference perhaps says more about how low expectations were than about how much money has been pledged. There is of course no strict trade off between money pledged and conflicts avoided, but in the end it is a false economy to skimp on funding if poverty and a lack of Western commitment contribute to another war in the region. Such a war is likely to involve financial costs for the west, apart from humanitarian considerations, far in excess of any pledges made at this stage. Even if a war does not break out, economic collapse in the area will provoke a further flow of refugees, which would itself present serious problems for neighbouring countries and member states of the European Union.

295. It is clear that the international community has been right to attempt to take a regional view of south eastern Europe. It is axiomatic that there are links between states in the region, particularly as so many ethnic groups cross borders. For example, the collapse of the Albanian state in 1997 allowed the KLA in Kosovo to arm itself, leading eventually to the NATO intervention of 1999. It is also the case that co-ordination was poor in Bosnia, and that an attempt to improve co-ordination of the international effort in the region as a whole is necessary.[724] What is less clear is that the Stability Pact has been the right way to improve co-ordination, or that the Pact has been supported enthusiastically by all of its participants. There have been reports, for example, of tension between the European Commission and Mr Hombach. Some elements in the Commission felt that the Commission should have been given the task of co-ordinating activities in South Eastern Europe. In January of this year Commissioner Patten went so far as to issue a public denial that relations were poor with Mr Hombach.[725] The Pact has also been plagued by the usual compromises required to reach agreement within the EU, such as the siting of the EU's reconstruction agency for the region in Greece, rather than in one of countries which will be the beneficiaries of the agency.

296. The United Kingdom has also been less than enthusiastic in its support for the Pact. This has perhaps been, in part, because of the usual United Kingdom scepticism which accompanies grand declarations and ambitions. But a more serious charge is that the United Kingdom has been unwilling to give up control of its—small—aid programmes in the area, because it is keen to maintain its bilateral influence, and unwilling to see its activities co-ordinated by an organisation with so many members. While the Foreign Secretary has been enthusiastic in public about the Stability Pact, this has not been backed up with hard cash. We believe that the Stability Pact offers an opportunity for the international community to avoid the mistakes of the past in the region, but that the current level of commitment will result in that opportunity being missed. The United Kingdom contribution to the Stability Pact has been minimal, and should be increased substantially. Another conflict in the region will be far more costly than a relatively modest financial contribution at this stage.

Relations with the EU

297. Much of the text of the Stability Pact is aspirational rather than practical. But one area where the Pact points to substantive changes is in relations with the EU. The Foreign Secretary told us: "One of the points we argued for very strongly during the Stability Pact is that what the European Union can bring to the Stability Pact is trade, technical and political agreements with the countries of South East Europe."[726] Before the Kosovo crisis, the EU's formal relationships with the countries of the region were limited.[727] This has partly been because of the economic and political weaknesses of states in the region, and also as a result of the consequences of the wars which followed the break-up of Yugoslavia.

298. Bulgaria and Romania are the most advanced in relation to the EU, and became full candidates for membership in December 1999—in part because of the role they played during the Kosovo crisis. These countries have relatively liberal trade regimes with the EU under their Europe Agreements, extensive technical assistance through PHARE, and are in the process of bringing their laws into line with EU norms. Compared to the countries of central Europe, Bulgaria and Romania's progress has been slow, but much better if the point of comparison is the rest of the Balkans.[728] The EU has in the past made improvements in relations conditional upon progress in a range of areas, including for example, human rights, and contribution to regional security. On the basis that most of the countries in the region have made limited progress in these areas, Macedonia and Albania only have co-operation agreements with the EU, while Bosnia and Croatia's trade with the EU is governed by Autonomous Trade Measures.[729]

STABILISATION AND ASSOCIATION AGREEMENTS

299. Since the Kosovo crisis, and in the context of the Stability Pact, there has been an attempt to upgrade the EU's relations with the region. The Foreign Secretary told us that: "it was Britain that very much brought to the discussion the idea that we should have specifically tailored...agreements that reflect the totality of South East Europe, which is why what we are now proposing for Albania and Macedonia are known as Stability and Association Agreements, which make them rather distinct from what we would normally apply, because what we normally apply is conditionality, which, frankly, is beyond those countries at the present time."[730] In the long term, the EU's aim is to negotiate Stabilisation and Association Agreements (SAAs) with Albania, Bosnia, Croatia, Macedonia and Yugoslavia. These agreements will include the objective of a ten-year transition to free trade areas with the EU, during which the EU will offer asymmetric trade preferences, opening up some of its markets prior to reciprocation by the country concerned.

300. On the question of whether the countries of South East Europe will be suitable candidates for membership of the EU, Mrs Roberts argued that this would be a "long process" but that "some form of linkage is ultimately desirable."[731] Dr Woodward told us that the countries of the region had "very sophisticated educated populations," and that they were "crucial to Europe in transportation terms so it is important for Europe to have [them] as part of this economic space."[732] In Dame Pauline Neville-Jones' view, "we ought to look seriously at allowing [the countries of the region] to have degrees of relationship with the European Union which are different according to candidates and which do not constitute full membership."[733]

301. The SAAs go some way to meeting this objective. However, they are not a panacea. The EU's High Representative and the Commission themselves have criticised the vagueness of the SAAs, pointing out that the agreements do not specify whether "the perspective of future EU membership" is being offered or not.[734] Although the Commission has concluded that Macedonia is ready to start negotiations for a SAA, it decided that Albania is not yet ready.[735] The international community is attempting to use the EU to bring about improvements in the region, by utilising the incentive of better relations with the EU, and the EU's aid and technical assistance, to change behaviour in the countries concerned. Albania has a 'Catch-22' problem: until it reaches a certain level of bureaucratic capacity, economic development and public order, the Commission is not able to negotiate meaningful agreements, thereby blocking one of the main routes by which the situation in the country might be improved. Dr Woodward told us: "I think we are so busy focussing on what conditions these countries will meet that we will forget it is in our interest to have this part of the world stabilised, economically prosperous and not a breeding ground for organised crime and we forget that and if these countries are more rapidly incorporated into our economic space by freer trade and with [for example] increased regulation of environmental rules [it will be to our benefit]."[736] On the other hand, there is a risk that rather than these countries joining, in the EU's phrase, "the road to Europe",[737] too rapid accession might result in harm to the EU.

302. One issue that the EU's High Representative, Javier Solana, and the Commissioner for the region, Chris Patten, identified in their report to the European Council at Lisbon[738] was poor co-ordination within the EU. The paper recommends that "the interim Political and Security Committee should be designed with a view to addressing the structural deficits of the Union's Western Balkans policy."[739] One of the "structural deficits" which has caused problems for the EU's policy-making in the area is an inability to make decisions flexibly and rapidly in response to fast moving situations on the ground. While it is to be hoped that the interim Political and Security Committee will be able to do this, the EU's response to any crisis will be led by the response of the European Council. Currently Common Foreign and Security Policy decisions are subject to unanimity.

303. However, the EU has a new foreign policy instrument, provided for by Article 13 of the Amsterdam Treaty—the Common Strategy. The main significance of this instrument is that Council decisions implementing strategies will normally be taken by Qualified Majority Voting, except in areas where a Council member declares that for "important and stated reasons of national policy" it opposes a decision, when unanimity will be required. The EU has so far adopted Strategies on Russia and Ukraine. In terms of the importance of South Eastern Europe to the future of the EU, and of the EU's capacity to influence developments in the region, it would be logical for the EU to adopt a Common Strategy on South Eastern Europe. We recommend that the Government encourage the EU to adopt its next Common Strategy on South Eastern Europe, in order to define clearly its policies, as well as to facilitate better decision making within the EU in this important policy area.

EU TRADE BARRIERS

304. The EU is the main trading partner for all of the countries of the region: for example 90 per cent of Albania's exports and 64 per cent of Romania's go to the EU.[740] 80 per cent of the trade of the countries of the region with the EU is duty free. However, "in a number of product areas which are considered sensitive by the EU (such as steel and agriculture), restrictions still apply. These are in areas where the different countries in the region could earn much needed foreign exchange if the remaining trade restrictions were eliminated."[741] The SAAs will address trade barriers within the region, and have the long term objective of creating free trade zones. The Foreign Secretary has said that the United Kingdom had been behind trade proposals: he had "tabled British proposals for an open trading area with the countries of the region through a network of free trade agreements, which would open up the wealthy markets of Europe and enable those countries to share our prosperity."[742]

305. As we discuss above, some of the countries of the region have not been deemed ready for SAAs: even for those that are negotiating agreements, there will be some delay before they are concluded. This removes one of the main tools for improving stability in the region from those countries which need it most. One solution to this problem would be for the EU to open its "markets to...products [from the region] before we require them to open their markets to us."[743] As the EU has said, this could be "a bold gesture could have a substantial political and economic impact, at relatively little cost."[744]

306. The Stability Pact Financing Conference "welcomed the intention of the European Commission to develop specific proposals for trade liberalisation vis-à-vis South Eastern Europe in the near future."[745] However, there is likely to be stiff opposition to these proposals within the EU once discussion over liberalisation of trade barriers for particular products begins—such as Bulgarian wine. We welcome the Commission's intention to pursue asymmetrical trade liberalisation with the countries of South Eastern Europe, and trust that its proposals will be far-reaching. We urge the Government to take up these proposals and to pursue them vigorously.

Serbia

307. Geographically, economically, militarily, politically, and in terms of population and communication, Serbia lies at the heart of the Balkans. As Dame Pauline Neville-Jones told us: "I think the bit that is missing in the jigsaw [of the Stability Pact] at the moment is the policy towards Serbia and that has always been the issue, policy towards Serbia and the difficulty that the West has had absolutely continuously is how you deal with Milosevic on the one hand and Serbia on the other if you are committed to make that distinction and this is one of the really key problems where the policy makers have failed and we still remain without a policy towards Serbia."[746] She proposes that our strategy towards Serbia should be "to tell the Serbs what is expected of them and to map out for them a path whereby they can over time restore their standing in the international community and have access to economic investment. They need to know explicitly what they must do at each stage, and, in specific terms, what benefit (which needs to be proportionate) they would obtain as a result. The way forward will be necessarily tough and must include the ousting of Milosevic."[747]

308. To some extent, this strategy has been followed. On 11 October 1999, the GAC declared that as soon as a democratic government was installed in Serbia, amongst other things, sanctions would be lifted, reconstruction launched, work towards a Stabilisation and Association agreement with the EU would begin, and assistance with Yugoslavia's entry into international financial institutions would be provided. More specifically, in a speech to the Stability Pact financing conference, Commissioner Patten said that the Commission was "penciling in a substantial sum for [post-Milosevic Serbia]—our share of what we judge it would cost to transform Serbia, when Milosevic has gone, and bring her back into the European family."[748] However, the _5.5 billion Commissioner Patten has ear-marked for the Balkans over the next seven years—_2.3 billion for Serbia—remains under dispute, and the money is therefore not clearly available for Serbia. The Government informed us that it "has broadly supported the proposal for continuing EU assistance on a major scale for 2000-2006. We shall obviously need more detail of the Commission's proposals for assistance to the region and will examine them carefully."[749]

309. There is a great need for reconstruction in Serbia. Estimates of the economic cost of the war to Serbia range from $30-60 billion.[750] The FCO told us that the Government "will respond to genuine humanitarian need in Serbia, but we will not support wider reconstruction while the country is governed by men indicted for crimes against humanity by the International Criminal Tribunal for the Former Yugoslavia."[751] There is little to be gained in providing aid to prop up a state-controlled system dominated by Milosevic and his cronies, and assistance should not be forthcoming unless and until there is a new government committed to the market system. This is especially the case following Milosevic's crackdown on the independent media on 17 May 2000.[752] Humanitarian agencies operate in Serbia, and the EU's sanctions against Serbia include humanitarian exemptions. The EU has also "launched a programme called 'Energy for Democracy' to supply heating oil to local authorities in Serbia controlled by the democratic opposition."[753]

THE OPPOSITION

310. Support for the opposition is one means of achieving the objective of Milosevic's removal as well as ensuring that any government which replaces him is well-disposed to the west. In William Hopkinson's view, "the opposition, though well intentioned in part, is apparently incapable of dislodging Mr Milosevic."[754] One problem for the opposition is that, as Christopher Cviic put it "in domestic Serbian politics, the Kosovo issue will remain a factor for a long time—rather as, in Hungary, Transylvania and other territories lost after 1918 remained an internal issue for decades after, seriously bedevilling Hungarian politics."[755] Along similar lines, Dame Pauline Neville-Jones told us "I think that Serb politics breathes and turns on the issue of nationalism." Dr Woodward told us "the Serbian opposition has been working against much more serious obstacles than any of the other oppositions and we have only just this month seen a change of power in Zagreb. The Croatian opposition was not working against the difficulties either of Milosevic or the burden of how to resolve Kosovo in a federation and it took them this long."[756] Another problem for the opposition is that Milosevic's "status as a war criminal gives him an exceptionally strong incentive to hang on to power."[757] Human Rights Watch has detailed how repressive measures against the opposition has intensified within the last year.[758] This has been exacerbated recently with the closure of the last free television station, Studio B. The Government should increase the BBC World Service's provision of news to Serbia, in Serbian and English, to offset the stranglehold the regime has on news information.

311. The Government has "established a £3 million fund to support projects to help the democratic opposition and civil society in Serbia."[759] The Stability Pact too is concerned with providing assistance to the opposition: the Pact has stated that "support for...the democratic opposition forces in Serbia is also a very important concern of [the Democratisation and Human Rights] Working Table. The Szeged Process, established jointly by the Hungarian Government and the Special Coordinator in October 1999, is a mechanism to reach out to democratically elected opposition mayors in Serbia and offer humanitarian aid, help to the embattled opposition media, support for democratic institutions and other needed assistance short of support for reconstruction."[760]

312. One of the problems with the opposition in Serbia is that they are divided: they have what The Economist has described as a "compulsive tendency to squabble."[761] The FCO informed us that its aim was "to encourage moderate political groups in all parts of the FRY...to enter into a reasoned dialogue about the future of the FRY. It is clear from our contacts that some individuals are more ready for this kind of dialogue than others."[762] At various points since Milosevic came to power, he has succeeded in co-opting elements of the opposition. Vuk Draskovic, leader of the Serbian Renewal Movement, held a position in Milosevic's government until April 1999, when he was sacked for advocating a compromise with NATO. This has made him suspect to the other main opposition leader, Zoran Djindjic, head of the opposition Democratic Party. At a lower level, many of the younger generation of the opposition believe that Milosevic's opponents should unite in its campaign to compel the regime to hold free and fair elections, and compete on a joint list for those elections. If the opposition does not unite, its chances of bringing about a change in the regime are extremely remote. The West should therefore do all it can to encourage the opposition to unite. After all, the continuing presence of the Milosevic regime creates an indirect burden on the United Kingdom tax payer by increasing the requirement for the deployment of British forces in the region. There is therefore every reason to be firm in making our assistance conditional upon the opposition acting effectively against Milosevic. We recommend that the Government consider what measures can be taken to encourage the Serbian opposition to unite in its campaign against Milosevic. In particular, consideration should be given to supporting only those elements of the opposition that are prepared to sign up to a joint programme.

313. Overall, we agree with the Government's policy of maintaining pressure on the Milosevic regime, while building links with and aiding the opposition to the regime. An important tool for maintaining pressure on Milosevic's regime is the EU's visa ban on leading members of the regime. This is the sort of sanction which places direct pressure on those responsible for atrocities in Kosovo without harming the population of Serbia. We were disturbed to receive evidence from the Serbian Information Centre that several "Milosevic regime officials...were allowed to attend Inter-parliamentary Commission of Europe meeting in France, despite the fact that they are all on EU visa ban list...the same thing happened with Inter-parliamentary Commission meeting in Berlin last autumn."[763] We are concerned that there appears to be evidence that the EU visa ban on Serbian officials is not being respected. We request that the FCO report to us on all violations of the ban, and what action the FCO has taken in response to these infractions.

Conclusion

314. There can be no stability in South Eastern Europe without stability in Serbia. We must therefore continue to exert pressure on the Milosevic regime. This must involve continuing sanctions—and ensuring the rigorous enforcement of the visa ban—but as far as possible mitigating their impact on ordinary Serbs. We must also continue to support the opposition, focussing upon those who are prepared to overcome personal differences to focus on overthrowing the regime.

315. As it has done since 1991, the former Yugoslavia as a whole presents the greatest challenge for the EU. The EU needs to embrace the challenge of building relations with the region, offering generous trade terms, offering South Eastern Europe the chance to grow through trade, not aid. Commissioner Patten has said that the European Commission believes that unless it can make a success of policy towards the region, efforts to construct a common foreign and security policy will fail.[764] We recommend that the United Kingdom should continue to take a leading role in building a consensus amongst our allies to promote peace and stability in South Eastern Europe, recognising that, if we do not, we will be faced once again with refugee flows and the need to deploy British forces, and British resources, in the region.

701 Stability Pact, para 3, available on www.stabilitypact.org. Back

702 QB282. Back

703 QC282. Back

704 Stability Pact report on the Funding Conference, available on www.stabilitypact.org/Cross%20Table%20Issues/index.htm. Back

705 www.stabilitypact.org/Feb%208%202000%20Press%20Release.htm. Back

706 See paras 307-313. Back

707 Speech by Mr Chris Patten to South-Eastern Europe Regional Funding Conference, 29 March 2000. Available on: http://europa.eu.int/comm/external_relations/speeches/patten/speech_29_03_00.htm. Back

708 Ev. p. 172. Back

709 These figures and subsequent ones in this paragraph taken from Balkan Reconstruction and European Integration, by Vladimir Gligorov, Mary Kaldor and Loukas Tsoukalis, October 1999, available on the Vienna Institute for International Economic Studies web site: www.wiiw.ac.at/balkan, from here on "Gligorov" or from The Road to Stability and Prosperity in South Eastern Europe, The World Bank, 1 March 2000, available on www.seerecon.org/RegionalInitiatives/WBRegionalStrategy/contents.htm. Back