321. Rocks and Hard Places: Serbia between Kosovo and the European Union

John R. Lampe is Professor of History at the University of Maryland, College Park and Senior Scholar at Woodrow Wilson International Center for Scholars. He spoke at an EES noon discussion on March 8, 2006. The following is a summary of his presentation. Meeting Report 321.

Back from a February visit to Belgrade, I concluded that simply situating Serbia between one rock—Kosovo—and one hard place—the European Union—will not suffice. A number of rocks and hard places need to be identified. Start with Mladic and Montenegro as well as Kosovo and the European Union, then add a dispirited public, a troubled economy and a discouraged electorate, suspicious of all political parties. And they feed off each other. Both Bosnia's suit against Serbia in The Hague's International Court and anniversary dates of the NATO bombing campaign were also impending, even before the demonstrations that followed the death of Slobodan Milosevic. Yet their limited extent and impact is one positive sign.

Another positive sign is the persistent importance of independent media. It survives amid unregulated and politically controlled radio and television (over 1,200 stations) and a shrinking number of newspaper readers, now barely 700,000. Still, Radio B-92 has added a television station after barely surviving the Milosevic era. Together their radio and television networks reach 90 percent of the population and it ranks second in news ratings. The newspaper Politika ranks third behind two tabloids in circulation, and some of the credit for its newly independent coverage goes to its new editor, Liljana Smajilovic. Danas continues its independent way and its editor, Radomir Licina, also serves as Board President for the Southeast European Media Organization, which produces a most useful annual handbook on 14 member medias.

But rocks and hard places predominate, starting with the divided political spectrum. The tattered remnants of the 18-party coalition that overthrew the Milosevic regime in 2000 has lost a great deal of its public standing. According to a survey in Politika on the fifth anniversary of the overthrow last October 5, only 20 percent of Serbs believed that the 12 original goals of the coalition had been even partly realized, while 40 percent felt themselves worse off economically.

Turning first to the two parties whose reconciliation would best serve those original goals, we find the Democrats of President Boris Tadic and the Democratic Party of Serbia of Prime Minister Vojislav Kostunica still bitterly divided. The Democrats continue to abstain from most parliamentary deliberations in the absence of a judicial house-cleaning but have gained little by their abstention. The slow moving Kostunica has not been able to use the greater power of his office and his alliance with the economic reformers of G-17 Plus to advance a promising program that remains largely on paper. Tadic remains the more persuasive public speaker and presence, but speaks without a heart-felt conviction in what he says and without the reputation for energy in what he does for which the assassinated Zoran Djindjic is now remembered.

Kostunica, for his part, cannot set aside the earlier rivalry with Djindjic to reconcile with the Democrats. He also seems to have drawn closer to conservative clerics in the Serbian Orthodox Church and moved away from Miroljub Labus and the G-17 Plus team that is heading Serbia's negotiations with the EU. One observer called this initially hopeful party "a casualty of the Kostunica government." The party's own recent rally as a separate political force may have been cut short by a financial scandal involving Labus's son-in-law, apparently reducing its share of the vote from 15 to 10 percent in two recent local elections.

A more portentous financial scandal is now threatening to cut down the third party that was presumed to be stepping in to replace G-17 Plus as a major power broker. Bogoljub Karic and his three brothers are all currently out of Serbia and refusing to appear in court to answer for a series of charges—the evasion of 7.7 million Deutch Marks in taxes for 1999-2001 being the most serious. The timing of these charges, coming before parliamentary elections, suggests some political motivation. Nevertheless, the reminder to the public that this family has grown immensely wealthy since the Milosevic regime seems to be sticking. Prospects for Karic's Movement for the Strength of Serbia (which is well-financed and has access to the family-owned and most watched station in Serbia, TV Pink) to win the 30-40 places in the next Parliament now appear highly unlikely.

Few of their supporters will be attracted to the core of southern provincial backers of the post-Milosevic Serbian Socialist Party, but many would be inclined to join the Radical Party or to abstain. As a Vreme article of February 6 suggests, the wider risk of abstention is likely to help the Radical Party, which can play off the prevailing feelings of victimization by the Western world as well as the spate of financial scandals. The most widely publicized of these scandals was the "suitcase affair," wherein police found 100,000 euros in a suitcase passed to or through the hands of a little-qualified vice governor of the National Bank, newly appointed by a new governor who the accused had assisted in a real estate deal. "Svi su lopovi" (they are all thieves) is a widely repeated refrain, and it seems to encourage abstention.

What sort of Radical Party, with their new slogan of "realistic" from the last presidential election, could we expect: no significant oversight from Vojislav Seselj buried in the judicial depths of the Hague process, but also no significant shift toward economic realism or international accommodation. The party seems attractive to the several hundred thousand refugees in the Vojvodina and south of Belgrade as well as the small town disadvantaged. Its leader, Tomislav Nikolic, has received much international coverage for calling Kosovo "occupied territory," which suggests a refusal to negotiate and a readiness for military action that is not the general Serbian sentiment, let alone the official Serbian position from either the president or the prime minister's office. The next ranking Radical leaders, the new mayor of Novi Sad, Maja Gorkovic, and the unsuccessful young candidate for mayor of Belgrade, Aleksandar Vucic, claim to identify with the European right and are trying to sound more accommodating than their previous statements suggest. In public opinion polls that do place them ahead of all other parties, the Radicals' 30 percent share still does not constitute the majority sometimes assumed by foreign observers. But following their course of defiant isolationism remains a temptation for larger numbers.

Serbia's crucial course is the pathway to the European Union and the fates of both Mladic and Montenegro are relevant here. Tanja Miscevic, the Director of Serbia's EU Integration Office, received the same clear message on her February visit to Brussels that has since been formally delivered by Commissioner Olli Rehn: Serbia must deliver General Radko Mladic to the ICTY in The Hague by one last deadline, then fixed at the end of March, and since moved to the end of April. Otherwise the country faces a suspension of talks for a Stability and Association Agreement. The psychological impact on Serbia's real but fragile support for membership, Miscevic worries, would be severe if this were to be postponed. Therefore, the president, the prime minister and the defense minister are agreed on the need to follow through with the arrest of Mladic. In addition, I heard the unanimous judgment that there would be no public demonstrations or media protests of any significance after the Mladic handover. He is now seen more as a Bosnian Serb figure than a Serbian hero, while public support for EU membership still stands at 64 percent, after a ten-point drop from early 2005. Support for EU membership also comes from the Serbian Orthodox Church, encouraged by Greek colleagues on the basis of their country's long experience with membership and by consultations with Bulgarian and Romanian Orthodox leaders as well.

Nor is the likely separation from Montenegro, as the famous referendum is now set for May 21, seen as an obstacle to the EU process or a setback for Serbia in general. The latest poll in Serbia shows 68 percent in favor of separation. There are already two separate visa regimes, two separate currencies and a set of customs duties and border delays in place between the only two entities in Southeastern Europe without a bilateral free trade agreement between them. The joint ministries maintained by the two are sparsely staffed and accomplishing little—"a snail on a double track" as the Belgrade Ekonomist put it last year. The idea of creating a Union of Independent States is attracting no support in Belgrade either. But, as British analyst Judy Batt told Politika on February 6, Serbian leaders seem to have no Plan B if the referendum falls below the 55 percent of those voting in favor or 50 percent of those eligible.

Assuming a successful Mladic hand-over and some agreement on Kosovo and Montenegro as well for the moment, I call attention to an economic picture that is surely troubled but less hopeless for EU membership or domestic prospects than too much of public opinion believes. First, the troubles: the main new problem is accelerating inflation through 2005, some 17 percent for the year as a result of unexpectedly higher prices for fruits and vegetables as well as for oil. Pensioners and those forced to live off one individual income were already unable in 2004 to cover minimal monthly expenses. Unemployment, even including unrecorded part-time jobs, still approaches 20 percent, and the trade deficit approached 5 billion euros for 2005. Corrupt cases of voucher privatization, claims for restitution to original owners, and a set of customs and administrative barriers still hinder foreign investors. (As for such barriers, ask Vlade Divac, the former NBA star about his experience with the Arandjelovac bottling plant and now the Novosti press complex).

But there are some positive signs: Direct foreign investment doubled in 2005 to 1.6 billion euros and the average monthly wage has more than doubled to $260. A value added tax of 18 percent was introduced with less dispute than expected and, along with a 10 percent flat tax for income, is cutting into the grey economy. The amount of time needed to open a new business has been cut down from 51 to 15 days. The World Bank's annual survey of the business climate shows Serbia moving up from the bottom in 2000 to pass Croatia, if not Slovenia and Bulgaria.

There is also the recent three-year agreement with the International Monetary Fund, not only providing $797 million in new credit but also eliminating $700 million of past debt to the Paris Club of official lenders. The deal awaits a final decision on Montenegro's independence, which is another reason for Serbian discomfort if the separation fails.

On the negative side, Serbia's economy still includes criminal networks operating more freely across Balkan borders than any legal business. Details abound in the new Vreme Atlas of Organized Crime and in Jurgen Roth's Weltwoche article based on a German intelligence report. But at least there is a new Special Prosecutor for Organized Crime, Slobodan Radovanovic, who has promised to use the tax laws in a manner familiar to observers of the American experience with Al Capone in the 1930s to bring major figures to trial. That still leaves the cleansing of a judicial system still too dependent on long-standing or politically motivated (or criminally intimidated) judges, but a recent proposal to elect judges de novo may offer some hope.

For Serbia's body politic to concentrate on turning these judicial and economic corners, as it must for EU accession, it must first address the Mladic, Montenegro and, hardest of all, Kosovo issues. Prime Minister Kostunica's close consultation these days with the conservative Orthodox clerics who are the strongest opponents of any concessions on Kosovo is cause for concern.

President Tadic's special representative on Kosovo, the respected historian and recent Ambassador to Greece Dusan Batakovic, began our discussion of the issue by calling Kai Eide's UN report on Kosovo, the basis for the current talks, "the most realistic report ever done" on the present situation there. He shared its assumption of a continued EU and US military presence (Point 81) and a High Representative with Bonn-like powers for inter-ethnic issues (Point 83). He spoke of a readiness on the Serbian side to grant "95 percent of what the Kosovars want," including economic sovereignty and parallel access to international financial organizations. I took the liberty of pointing out that from the international as well as from the Kosovar side, the word "independence" would have to appear in the final settlement. Dr. Batakovic then spelled out three "conditional" needs that the Serbian side regarded as essential in light of its interests as well as upholding the standards stressed in the Eide report: (1) new competencies for the Serb municipalities in Kosovo, perhaps on the Presevo example for Albanians in Serbia; (2) "horizontal links" between those municipalities, but substantive rather than territorial links, on the pattern of the Ohrid Agreement, for the area north of the Ibar River; and (3) continuing links for health services and education to Belgrade, in the absence of any such professionals left in the Serb communities, and for the judiciary across Kosovo, external training to help establish its independence of local political pressure.

This Belgrade connection—Serbian powers plus Bonn powers—would of course be the hardest point for the Kosovar side to swallow, but only massive international assistance could compensate for communities struggling to survive without such a connection, especially south of the Ibar River. In the longer run, given an unemployment rate of 96 percent, Serbs in Kosovo would also need job opportunities outside the Serb enclaves. How such mobility could be compatible with the current lack of legal order and judicial independence, plus a 60 to 70 percent rate of unemployment on the Kosovar side, is hard to envisage. Hence my speculation (not shared by Dr. Batakovic, anyone else I met in Belgrade or anyone on the international side these days) is that the least bad solution might still be what they all say is off the table: partition at the Ibar River, allowing the Serb communities to the south to move there rather than to Serbia and leaving only the religious sites in the south to be protected, as they would have to be, by an EU military presence. The easier task of honoring that protection would of course advance what could be a less conditionally independent Kosova's candidacy for membership in the European Union.

For now, we may still hope that both sides will understand that an agreement that they reach between them, rather than one that the international community imposes, will be regarded as more legitimate in the long run. In the short run, there is concern about the recent choice of General Agim Ceku to be Kosovar Prime Minister, given his exclusively military record, first as a Yugoslav National Army officer, then as a commander in Croatia's Operation Storm in 1995 and finally as commander in chief first of the Kosovo Liberation Army (KLA) and now of a Kosova Protection Corps, where KLA members are hugely represented. His selection has caused understandable anxiety in Belgrade. The choice of an uncompromising military leader raises legitimate questions about the readiness of the Kosovar side to negotiate at all. Especially in light of the Serbian Interior Ministry's long-standing charges against Ceku for war crimes, one wonders if the Kosovar is intent on provoking the Serbian side into refusing to negotiate and forcing an internationally imposed solution on maximalist Kosovar terms. Or does the choice of Ceku promise the one leader who could force through Kosovar acceptance of a genuine compromise?

While the Serbian side counters with the genuine threat of a sweeping Radical victory in the next elections if Kosovo's formal separation is simply imposed, the threat of Serbian military action sometimes raised by the Kosovar side does not seem real. Radical supporters have no militias ready for war, and no youth organization of the sort promising to explode on the Kosovar side. Serbia's army is neither ready nor preparing for war, and its units stationed near the Kosovo border are under tight control of an increasingly responsible Ministry of Defense.

To conclude, there is another positive sign from Serbia from the Defense Ministry and its army, which has been strapped financially and burdened by a large number of older officers and non-coms with no language or other skills, many from the 10,000 from other republics of the former Yugoslavia who joined the 55,000 in Serbia and Montenegro. In a meeting at the Economic and Social Policy Institute (formerly named the G-17 Institute), I heard better news from both the Institute's Srdjan Gligorijevic and the former assistant minister of defense, Pavle Jankovic, that there are a growing number of officers, some from conviction and more for survival, who are welcoming increased cooperation with NATO. Such projects quadrupled between 2002 and 2004. They have included year-long training for Serbian officers in Italy, Germany, the United Kingdom and Greece, the destruction of 4,000 Manual Portable Weapons Systems (hand-held and far from weapons of mass destruction), a variety of new training now including peace-keeping on the British model, several visits by a contingent from the National Defense University, and a US Army officer in a year's program at Belgrade's Defense Academy. What's going on here? I submit that it is the spread of the same understanding that Serbia needs a modern army connected to European standards which accounts for public opinion polls favoring membership in Partnership for Peace by 70 percent. (The NATO number drops off to 40 percent, because of the bombing in 1999 rather than anything else). Handing over General Mladic, to which the current Defense Minister Zoran Stankovic is openly committed, will only isolate the hold-overs even more.

As for the Serbian public, its principal challenges remain a demeaning sense of isolation and the "black pessimism" that the late Zoran Djindjic worried about overwhelming this otherwise "merry people." At least the European Commission authorized visa relief for students in 2004 and for professionals in 2005, but it has yet to be implemented. Only 3 percent of the current student generation has ever visited an EU country (and only 30 percent has ever been outside Serbia). The EU's promise to move ahead on full implementation of visa relief needs attention this year, not in 2007 as recently announced. Serbia's public also needs to be reminded that the EU has already provided 1.7 billion euros in assistance prior to an Association Agreement. Serbs need to learn more about EU membership in general, the real gains and obligations rather than the threats of arbitrary compliance that circulate too widely. Most of all, Serbs need to move away from the temptations of denial and unique victimization that stand in the way of the hard adjustments that remain from the burdens of both the late Communist decades and the Milosevic era. To meet these challenges and avoid the bottomless pit of renewed isolation, Serbia's political leaders must do their part. They would do well to recall the words of Zoran Djindjic, "ako ne uspemo, jedini razlog je mi sami" (if we do not succeed, the only reason is we ourselves).

But the West must do its part as well. As Judy Batt concludes in her prudent Chaillot Paper of August 2005, "Serbia matters. With a population of 7.5 million, it is by far the largest country in the western Balkans, and as such is of crucial importance for the stability of the while region. While the Serbs want to ‘join Europe,' they still do not fully trust it, and the feeling is reciprocated. Both sides need to work to overcome their mutual incomprehension." Let me add the United States to that European side and hope that we play our part as well, so that better and not worse days lie ahead for Serbia, and therefore for all of Southeastern Europe.