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189

Regional Cooperation in South East Europe and Beyond

Challenges and Prospects

Demokratie, Sicherheit, FriedenDemocracy, Security, Peace 189

Nomos

Wolfgang Petritsch | Christophe Solioz (Eds.)

“‘Regional Cooperation in South East Europe and Beyond’ illustrates that collaboration through a circle of neighbourhood friends strengthens both the logic of EU membership and its effects. Upgraded and broadened regional cooperation between South East Euro-pean countries also demonstrates that the region can work together and has a contribu-tion to make to the EU. Regional cooperation not only boosts the region in meeting its common challenges, but builds confidence outside the region in the whole enlargement and cooperation process.”

Janez Potocnik, European Commission, Commissioner for Science and Research

“Fears and suspicions (spoken and unspoken), economic realities and electoral calculations; requirements of European integration and the change of generations, all these factors shape the dynamics of the regional integration in the Balkans. But if you want to under-stand why the regional integration is an imperative for the European future of the Balkans, you should read this important, informative and insightful book.”

Ivan Krastev, Chair of the Centre for Liberal Strategies, Sofia

“This volume assembles stimulating explorations of the regional cooperation in the Bal-kans; it deepens and broadens our understanding of a complex process characterized by post-war transition, state building and EU integration.”

Boris Nemsic, CEO mobilkom austria, Vienna

About the Editors: ‘Regional Cooperation in South East Europe and Beyond. Challenges and Prospects’ is edited by Wolfgang Petritsch, former High Representative for Bosnia and Herzegovina and Special Envoy of the EU for Kosovo, and Christophe Solioz, Secretary-General of the Center for European Integration Strategies.

^

^ ^

Demokratie, Sicherheit, Frieden Democracy, Security, Peace

herausgegeben von Hans-Joachim Gießmann Series Editor Hans-Joachim Gießmann

DSF Band 189 DSP Volume 189

Wolfgang Petritsch | Christophe Solioz (Eds.)

Regional Cooperation in South East Europe and Beyond

Challenges and Prospects

The Authors: Othon Anastasakis | Martin Dangerfield | Milica Delevi´ c | Vladimir Gligorov | Wolfgang Petritsch | Christophe Solioz | Goran Svilanovi´ c | Theodor H. Winkler | Gregor Zore

Nomos

1. Auflage 2008© Nomos Verlagsgesellschaft, Baden-Baden 2008. Printed in Germany. Alle Rechte, auch die des Nachdrucks von Auszügen, der photomechanischen Wiedergabe und der Übersetzung, vorbehalten. Gedruckt auf alterungsbeständigem Papier.

This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illus-trations, broadcasting, reproduction by photocopying machine or similar means, and storage in data banks. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to »Verwertungsgesellschaft Wort«, Munich.

Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://www.d-nb.de abrufbar.

Die Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://www.d-nb.de.

ISBN 978-3-8329-3413-2

Published with the support of– mobilkom austria– Democratic Control of Armed Forces (DCAF)– IMMORENT doo Belgrade

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Contents Maps, Figures and Tables 7 Acknowledgements 9 List of Abbreviations and Acronyms 11 Opening Janez Potočnik Foreword 15 Wolfgang Petritsch / Christophe Solioz Beyond Sovereignty: Integration and Connectivity 17 Cooperation within SEE Othon Anastasakis Balkan Regional Cooperation: The Limits of a Regionalism Imposed from Outside 35 Milica Delević Can the Western Balkans Stand for Geography and a Compromise? 45 Vladimir Gligorov The Balkan Geography of Animosity and Cooperation 71 Goran Svilanović Renewed Regional Cooperation in South East Europe 87 Theodor H. Winkler / Gregor Zore Regional Security Cooperation in South East Europe 107

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And Beyond Martin Dangerfield The Impact of European Union Membership on Central European Subregional Cooperation 129 Wolfgang Petritsch Russia in the Balkans: Another Bully on the Block? Kosovo and the New Realities in South East Europe 147 Christophe Solioz Thinking About and Beyond South East Europe 159 Contributors 185

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Maps, Figures and Tables Maps SEE transnational cooperation in the framework of Interreg IVB 20 Cross-border cooperation in the framework of Interreg IVA (2007-13) 26 Interregional cooperation in the framework of Interreg IIIC (2003-06) 28 Transnational cooperation in the framework of Interreg IVB (2007-13) 31 Figures Trade deficit of Western Balkans countries (% of GDP), 2000-06 73 Current account deficits of WB countries (% of GDP), 2000-06 74 Exports in NMS-5 and South East Europe (SEE), 1990-2006 75 Exports in NMS-5 and SEE, 2000-06 75 Foreign direct investment (FDI) stock per capita in NMS-5,

Bulgaria and Romania, 1998-2006 76 FDI stock per capita in NMS-5, Bulgaria, Romania and SEE,

1998-2006 76 Technology-driven industries as % of total manufacturing exports

to the EU, 2000-06 78 Labour-intensive industries as % of total manufacturing exports

to the EU, 2000-06 79 Low-skill industries as % of total manufacturing exports to the EU,

2000-06 79 Revealed comparative advantage in SEE, 2005, top five sectors 80 Revealed comparative advantage in SEE, 2000/01-2004/05,

recent increases, top five sectors 81 Tables Inward FDI stock in Bulgaria, Romania and SEE-4 by %

of economic activities, December 2005 onwards 77 Transition indicators for 2007 164 Indices of corruption and freedom 178

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Acknowledgements Regional Cooperation in South East Europe and Beyond: Challenges and Prospects is the follow-up to studies focusing on regional cooperation pub-lished in 2007 by the Center for European Integration Strategies (CEIS) within the framework of its Working Papers series and the volume Conflict and Renewal: Europe Transformed (Baden-Baden: Nomos, 2007).

We also had the opportunity to present our views in this field at various conferences: Economic and Social Development in Bosnia and Herzegovina: A Challenge in the Regional and European Context organised by the Aus-trian-French Centre for Rapprochement in Europe and the French Institute for International Relations (Sarajevo, 12 July 2007); The New Situation in South East Europe: Needs and Priorities for Economic Integration arranged by UNECE (Geneva, 2 July 2007); Transcending Europe’s Borders: The EU and Its Neighbours, organised by the International Council for Central and East European Studies Regional European Congress (Berlin, 2 August 2007); another UNECE brainstorming seminar (Geneva, 6 December 2007); and What Keeps Us Apart, What Keeps Us Together?, organised by the Central and East European International Studies Association and World International Studies Committee (Ljubljana, 26 July 2008). We take this opportunity to thank the respective organisers for having given us the opportunity to express our views. This book would not have been possible without the help of Alex Potter, who, as the copyeditor, helped the editors fulfil their task. Thanks go as well to Taina Evans, who reviewed the final version. This publication benefited from funding provided by Mobilkom Austria, the Geneva-based Centre for the Democratic Control of Armed Forces (DCAF) and Immorent doo Bel-grade. The views and opinions contained in this volume are, of course, en-tirely those of the respective authors; and none of the funding organisations are in any way responsible for or necessarily in agreement with these views. We are deeply thankful for the support of our sponsors and for their largesse in encouraging discussion on our concerns.

Wolfgang Petritsch | Christophe Solioz Paris | Geneva, June 2008

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List of Abbreviations and Acronyms AII Adriatic-Ionian Initiative ARF Alliance of Reform Forces BSEC Black Sea Economic Cooperation CARDS Community Assistance for Reconstruction,

Democratisation and Stabilisation CEE Central and Eastern Europe CEEC Central and Eastern European countries CEFTA Central European Free Trade Agreement CEI Central European Initiative CEIS Center for European Integration Strategies CiO chairmanship-in-office CMEA Council for Mutual Economic Assistance EBRD European Bank for Reconstruction and Development EC European Commission ENP European Neighbourhood Policy ESDP European Security and Defence Policy EU European Union FDI foreign direct investment FRY Federal Republic of Yugoslavia FTA free trade agreement GDP gross domestic product GFAP General Framework Agreement for Peace GUAM Georgia, Ukraine, Azerbaijan and Moldova IBM integrated border management ICJ International Court of Justice ICT information and communication technologies ICTY International Criminal Tribunal for the Former Yugoslavia IDP internally displaced person IFI international financial institution IFOR Implementation Force ILO International Labour Organization IMF International Monetary Fund IPA Instrument of Pre-Accession Assistance IVF International Visegrád Fund JHA justice and home affairs KDOM Kosovo Diplomatic Observers Mission KLA Kosovo Liberation Army KVM Kosovo Verification Mission MDG Millennium Development Goals MoU memorandum of understanding NAM Non-Aligned Movement

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NATO North Atlantic Treaty Organisation NGO non-governmental organisation NMS new member states OSCE Organisation for Security and Co-operation in Europe PfP Partnership for Peace PHARE Poland and Hungary: Assistance for Restructuring their

Economies PISG provisional institutions of self-government PPP purchasing power parity RCC Regional Cooperation Council RACVIAC Regional Arms Control Verification and Implementation

Assistance Centre SAA Stabilisation and Association Agreement SAp Stabilisation and Association Process SDA Party of Democratic Action SECI Southeast European Cooperative Initiative SEDM Southeast European Defence Ministerial SEE South East Europe/European SEECP South East European Cooperation Process SEEI Southeast European Initiative SFOR Stabilisation Force SFRY Socialist Federal Republic of Yugoslavia SME small and medium-sized enterprise SP Stability Pact for South Eastern Europe SPAI Stability Pact Anti-corruption Initiative SPOC Stability Pact Initiative against Organised Crime SSR security sector reform UN United Nations UNDP United Nations Development Programme UNECE United Nations Economic Commission for Europe UNHCR United Nations High Commissioner for Refugees UNMIBH United Nations Mission in Bosnia and Herzegovina UNMIK United Nations Mission in Kosovo USD United States Dollar USSR Union of Soviet Socialist Republics VAT value added tax VG Visegrád Group WB World Bank wiiw Vienna Institute for International Economic Studies WTO World Trade Organisation

Opening

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Janez Potočnik* Foreword Cooperation is the only rational way of life that can lead to growth and pro-gress. This is true for culture, economics and science; it is true for our imme-diate neighbours; and in today’s increasingly connected and smaller world, it is also true for more distant countries. There is no doubt that the enlargement of the European Union (EU) has been that organisation’s most successful recent policy – both for the ‘old’ and the ‘new’ members. Its success has affirmed the ambition of candidate countries to reform and grow, and the serious intent of the EU to keep its promises. Enlargement must continue, but it cannot be taken for granted. It involves considerable efforts and reforms for both candidate and potential candidate countries. Collaboration through a circle of neighbourhood friends strength-ens both the logic of EU membership and its effects; but upgraded and broadened regional cooperation among South East European countries also demonstrates that the region can work together and has a contribution to make to the EU. Regional cooperation not only boosts the region in meeting its common challenges, but also builds confidence outside the region in the whole enlargement and cooperation process.

* Janez Potočnik is EU European commissioner for science and research.

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Wolfgang Petritsch and Christophe Solioz Beyond Sovereignty: Integration and Connectivity Written by academic researchers and practitioners, Regional Cooperation in South East Europe and Beyond is a collection of essays that examine the challenges of regional cooperation in South East Europe (SEE) and outline prospects for its future development. Among the issues considered in this volume are the increased diversity in the region, the paradox of new divisions and contradictions produced by the latest round of European Union (EU) enlargement, the connection between economic development and regional cooperation, the coexistence of many cooperation programmes and the still unresolved security challenges. It also discusses why these countries should embrace the process of wider regional cooperation by moving beyond re-gional – in fact subregional – frameworks that are too narrowly conceived. To this end, the contributions presented in the second section of this book venture to explain why upgraded and broadened regional cooperation in SEE would not interfere with, but rather complement and reinforce, both EU inte-gration and the European Neighbourhood Policy (ENP), while requiring innovative thinking and the careful recalibration of previous regional initia-tives. Let us first clarify some key concepts in order to avoid the evasiveness often associated with the concepts of ‘region’ and ‘regional cooperation’. The basic definition of the term ‘region’, seen as a subsystem in the architecture of international relations, applies typically to a limited number of States linked together by a geographical relationship and a degree of mutual interdepend-ence. It must be noticed that a region is by definition not exclusively an inter-state construct; subnational, thus substate or intrastate regions should also be considered (see map 3) – of course, some cooperation schemes may mix both inter- and intra-territorial levels (see map 2). Beyond various models and more in-depth attempts at definition, most experts insist today on the very fact that “there are no ‘natural’ regions: definitions of a ‘region’ vary accord-ing to the particular problem or question under investigation”.1 Further, re-gions are socially constructed and, as Iver Neumann notes, also political constructs: “regions are invented by political actors as a political pro-gramme”.2 1 Björn Hettne, “Beyond the New Regionalism,” New Political Economy, 10 (2005) 4, p.

544. SEE illustrates this in a particular way; see Dimitar Bechev, Constructing South East Europe: The Politics of Regional Identity in the Balkans (Oxford: European Studies Cen-tre, University of Oxford RAMSES Working Paper no. 1/06, March 2006), p. 23.

2 Iver B. Neumann, “Regionalization and democratic consolidation,” in Jan Zielonka and Alex Pravda (eds.), Democratic Consolidation in Eastern Europe, Volume 2: Interna-tional and Transnational Factors (Oxford: Oxford University Press, 2001), p. 58.

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Regional cooperation refers mostly to strategies developed by the con-cerned actors – governments in cases of interstate cooperation – to approach common problems, negotiating around the specific interests of all actors. In the case of most SEE organisations mentioned in this volume, it is worth noting that regional cooperation was engineered from outside and approached as a peace project from a neofunctionalist3 viewpoint: firstly, cooperation had to be established through the promotion of cross-border activities such as transport, trade, production and welfare; and, secondly, this cooperation process was supposed to guarantee security and stability, and to lead to po-litical integration. Nevertheless, the development of these regional organisa-tions attests to the existence of a project shared by different States, based on intertwined political and security interests. Of course, regional cooperation must be conceived as a process; hence the pertinence of the term ‘region-building’, which characterises regionalisation as such. Neumann uses this concept in order to signify “the ideas, dynamics and means that contribute to changing a geographical area into a politically-constructed community”.4 The very idea of region-building applies best to SEE and is illustrated by the recent transition from the Stability Pact for South Eastern Europe (SP) to the Regional Cooperation Council (RCC). This shift is supposed to increase endogenous regional cooperation processes and give SEE a sense of ‘region-ness’ based more on consensus-building than on standards and norms set by outside actors such as the EU, NATO, the Organisation for Security and Co-operation in Europe (OSCE) and the Council of Europe – to name but a few key players that have a clear impact both on the state- and region-building processes in SEE.

In this book, ‘South East Europe’ refers to the following countries and territories in transition from a planned to a market economy (as a distinguish-ing criterion): Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Mace-donia,5 Moldova, Montenegro, Romania, Serbia and Kosovo. Occasionally, some authors include Greece, Turkey and Slovenia in the SEE group – using then the term ‘wider South East Europe’. The EU Transnational Co-operation Programme South East Europe (2007-13) uses a wider framework, as it also includes Austria, Hungary, Italy, Slovakia and Ukraine (see map 1).6 The use of the term ‘South East Europe’ became common in the context of the SP, established in 1999. The SP targeted the above-mentioned SEE countries, but 3 On the diverging theories regarding regional cooperation, see Stefan Schirm, Globaliza-

tion and the New Regionalism: Global Markets, Domestic Politics and Regional Coopera-tion (Cambridge: Polity Press, 2002).

4 Iver B. Neumann, “A region-building approach,” in Fredrik Söderbaum and Timothy M. Shaw (eds.), Theories of New Regionalism (New York: Palgrave, 2003), p. 160 – as quoted by Hettne, “Beyond the New Regionalism”.

5 Throughout this book, the authors use the term ‘Macedonia’ as referring to the constitu-tional name ‘Republic of Macedonia’, while being aware of the ongoing dispute over the country’s name between Macedonia and Greece. Macedonia thus joined the UN under the provisional name of ‘The Former Yugoslav Republic of Macedonia’ (FYROM).

6 This EU programme originates from the notion of the Central European, Adriatic, Danu-bian, South-Eastern European Space (CADSES); see <http://www.cadses.net>.

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implicitly referred to an inclusive regional approach. Both in the region and outside of it, SEE is often used as a neutral term in order to avoid the often negative representations associated with the Balkans. For most of the SEE countries, it is a way to underline their identification with Europe. The fact that the renewed Central European Free Trade Agreement (CEFTA 2006) – which originates from the initial CEFTA agreement signed in 1992 by the Visegrád Group (Poland, Hungary, the Czech Republic and Slovakia) – no longer includes any country belonging to Central Europe, but only SEE coun-tries, is symptomatic: escaping from the Balkans and identification with Cen-tral Europe became a first step on the road to Europe. Thus, the substitution of the term ‘Balkans’ with ‘South East Europe’ exemplifies a redefinition of regional identity that played a crucial role in the development of regional cooperation in SEE in the 1990s – as a security-interdependent region at-tempting to overcome its marginalisation vis-à-vis Europe.7

The term ‘Western Balkans’, however, emerged in 1998 as a Brussels neologism; referring this time to the countries that once belonged to the So-cialist Federal Republic of Yugoslavia (minus Slovenia, plus Albania) and are included in the EU’s Stabilisation and Association Process (SAp). From an EU perspective, the Western Balkan countries are further divided into candidate countries (for EU membership) and potential candidate countries. In this way, the SEE region was divided in several distinctive groupings based on the level of compliance with the norms set by the EU.8 As Dimitar Bechev comments, the EU “shaped through its institutional practices of con-trolled inclusion the collective politico-geographical identities of the States in South East Europe after the late 1990s”.9 Beyond the various designations, the regional dimension – as complex and problematic as it may be – does not, however, disappear.

Last but not least, we may ask if it is more appropriate to speak of re-gional or subregional cooperation in SEE. While the EU should be consid-ered as a macro region, SEE – as a distinct part of it – has to be regarded as a subregion.10 As Björn Hettne points out, subregionalism can also be under-stood as a regionalist project promoted by weaker States. The concerned subregion would then be called a ‘peripheral region’ – and this certainly applies to present-day SEE.11 In the framework of this volume, the terminol-ogy is used with some flexibility: while some authors treat ‘regional coopera-

7 Dimitar Bechev evidences marginality vis-à-vis Europe as the common denominator in

the shared Balkan identity. For a detailed discussion on the link between labels and poli-tics, see Dimitar Bechev, “Contested Borders, Contested Identity: The Case of Regional-ism in South East Europe,” Journal of Southeast European and Black Sea Studies, 4 (2004) 1, pp. 77–96.

8 Authors such as Vladimir Gligorov and Dimitar Bechev mention that, by implication, Romania and Bulgaria could be classified as belonging to the ‘Eastern Balkans’.

9 Bechev, Constructing South East Europe, p. 22. 10 Thus, subregions are smaller parts of macro regions; see Hettne, “Beyond the New Re-

gionalism,” pp. 556-57. 11 See Hettne, “Beyond the New Regionalism,” p. 557.

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tion’ and ‘subregional cooperation’ as synonyms, others distinguish between (broad) regional and subregional cooperation: the first referring to wider regional processes (at the level of the EU or at the pan-European level of the Council of Europe and the OSCE); the latter to cooperative schemes in a distinct and limited area – SEE. Map 1: SEE transnational cooperation in the framework of Interreg IVB

Source: <http://www.southeast-europe.net> The first section of this volume focuses on what should be called subregional cooperation. Othon Anastasakis’s introductory text discusses the current situation and relevance of regional cooperation in SEE, highlighting the fact that regional cooperation has been mostly defined from abroad and increas-ingly led by the EU, with very limited regional ownership. The obstacles faced by regionalism imposed from abroad are the lack of local (intra-regional) political will and the perceived problematic legitimacy of the exter-nally imposed conditionality. Anastasakis reminds us that there is no shared notion of the SEE region, but instead geographical proximity, neighbouring States and international politics define the regional identity. The fact that the SEE subregional context becomes less and less relevant as a regional context and is being reduced to ‘the problematic leftovers’ of the EU enlargement in

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SEE raises the issue of the relevance of and prospects for different regional groupings.

The next chapter, written by Milica Delević, begins from the assertion that the countries of the region are today much more closely connected through various cooperation schemes than they were eight years ago. Clearly many positive developments have taken place, and cooperation, initially seen as an option of last resort, is increasingly seen as an obvious choice. Delević focuses on the forms of cooperation that exist in the region, and also on the different expectations among external actors encouraging and regional actors participating in this process. She also highlights the importance of successful future cooperation and integration in a region that has traditionally known little of either.

Vladimir Gligorov focuses his chapter on trends in the Balkan econo-mies, introducing the distinction between security and political risks and their respective economic consequences: the lower the risks, the better the pros-pects for cooperation both within and between countries. Concomitantly, increased cooperation tends to decrease security and political risks, albeit only up to a point. Despite the fact that Balkan economies tend to grow strongly with increased security and political stability, they have significant weaknesses in their exporting sectors and are suffering from large external imbalances. However, foreign investments are growing, and so are exports. Micro evidence also indicates that there is some improvement in the structure of exports, although reindustrialisation is yet to happen. Gligorov considers regional cooperation to not be very developed; it is cooperation with the EU that enhances regional normalisation, and cooperation in the form of regional cooperation is one of the conditions for EU membership. True, trade and most other economic relations with the EU are much more important for every country in the Balkans than is regional cooperation – even in the case of countries that trade a great deal in the region, such as Serbia, it is the EU that is potentially the main source of growth and development. Gligorov concludes his critical analysis by stating: “Security and political risks still weigh heavily on the region. If the last remaining security risk is removed, the Balkans should forge ahead in its integration with the EU, and this will enlarge the geography of cooperation in the region too.”

In his contribution, Goran Svilanović views regional cooperation and initiatives as vehicles for economic growth and confidence-building. Against the background of a country-by-country review of the EU enlargement proc-ess, he discusses the challenges of the transformation of the SP into the RCC, highlighting the necessity of stronger cooperation with other existing subre-gional initiatives. Compared to other regions, SEE faces more obstacles, thus it needs significant levelling, predominantly in trade, regulations and cross-border facilitation of the movement of goods, capital and people. The chapter ends with recommendations presenting, firstly, what the SEE region should do to achieve this levelling and, secondly, what the EU should do. Svilanović

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emphasises that functional and accountable statehood, coupled with negoti-ated trade mechanisms and security cooperation, might decisively contribute to build a European dimension for SEE.

The chapter written by Theodor Winkler and Gregor Zore reviews the challenges of regional security cooperation. These authors first focus on the security sector reform (SSR) process that has taken place under the difficult conditions of post-conflict reconstruction and against the background of political and economic transition. The overall assessment is mildly positive: today’s state of governance of the security sector in SEE has substantially improved, although much still needs to be achieved. The authors then exam-ine the process of regional security cooperation. Despite the plethora of mul-tilateral security cooperation programmes, the main drivers of reform and regional cooperation are the EU, NATO and a few relevant intergovernmen-tal organisations. Winkler and Zore discern two main tendencies: first, a gradual shift from NATO and the United States (either within NATO or sepa-rately) as the main actors encouraging security cooperation initiatives throughout the 1990s to a more pronounced European involvement from the late 1990s onwards; and, second, the way in which the nature of security cooperation initiatives has evolved from generally formal institutionalised organisations with broad membership and strategic political goals to more specific, narrower, functional, sometimes ad hoc arrangements such as con-ventions, associations, databases, clearing-houses, working groups and other forms of issue-specific cooperation. The chapter ends with a welcome rec-ommendation: “Not more cooperation programmes are needed, but more focused concrete and result-oriented cooperation that is well coordinated and prioritised. The shift to local ownership may help in tuning the existing initia-tives to better reflect the actual needs on the ground.” The second section opens with a contribution from Martin Dangerfield, who discusses Central and East European (CEE) subregional cooperation proc-esses in the context of actual EU membership, identifying some of the ways in which the CEE experience might be instructive for the SEE subregional cooperation process now and in the future. The longevity of the Visegrád Group (VG) and its successful transition to post-enlargement relevance means that participants in EU accession-motivated cooperation should be open to a long-term perspective beyond the point of EU accession. Danger-field also recalls the role of CEE subregional organisations as players in the Europeanisation of the Western Balkans. Most significant in this process is CEFTA, which, of course, began life as the ‘offspring’ of the VG and pro-vided the framework for mutual economic integration of the Visegrád four and several other of the 2004/2007 EU entrants. Meanwhile, the CEFTA framework was used as a tool to successfully multilateralise the network of free trade agreements in force in the Western Balkans. Last but not least, cooperation with other subregional groupings is another VG experience that

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applies to SEE countries as well; they should, of course, take advantage of the benefits of working closely with CEE subregional organisations now active in the SEE area itself.

Wolfgang Petritsch’s case study examines the Russian Federation’s re-turn to the Balkans. Its adamant opposition to the independence of the prov-ince – reinforced by the low diplomatic recognition rate of this latest Balkan State – must be seen as part of the new race for political and economic influ-ence in SEE. After more than a decade in which the Russian Federation’s role in this region oscillated between non-engagement, Slavic-Orthodox solidarity and cooperation with the West, it now takes a new, more assertive stand with clearly defined economic, political and strategic goals. Moscow’s insistence on Belgrade’s prior consent to any change in the status of Kosovo is not just an expression of the traditional relationship between the Federation and Ser-bia, but it also plays into the former’s rather recent economic engagement in Serbia, whose energy sector has emerged as a strategic target. The EU can no doubt succeed in this new competitive environment, as it can offer Serbia integration into its sphere. For Petritsch, Moscow’s return to the Balkans is both a challenge and an opportunity for a more meaningful cooperation among the EU, the Russian Federation and SEE.

In the last chapter of the book, Christophe Solioz briefly reviews the ‘transition through war’ that considerably affected the fate of the Western Balkans in the early 1990s. In the region’s first post-war decade, the EU integration process, taken on a country-by-country basis, was the main incen-tive to reform. Meanwhile, subregional initiatives have received increased attention, as the regional dimension – initially a somehow neglected facet – is now seen as a crucial issue and becomes progressively a process driven from within the region. Considering the characteristics and inherent limits of subregional cooperation in SEE, Solioz suggests exploring the prospects of regional cooperation in a broader, pan-European, framework. Only interre-gional cooperation – within the EU and beyond – through the networking of already existing subregions would profile a forward-looking and innovative regionalism. One main purpose in proposing this collection is to contribute towards a better understanding of subregional cooperation in SEE. The overall assess-ment is that the countries of the region are now much more connected than they were some ten years ago. Nevertheless, the collection also draws atten-tion to the fact that, despite the achievements of the SP, subregional coopera-tion is still mostly fragmented and insufficiently visible; the results are lim-ited and there is an obvious lack of regional ownership; further, subregional cooperation is not sufficiently recognised as a value per se. As Paul Stubbs acknowledges:

South East Europe is, at best, an emergent sub-regional space, still largely as-cribed by outside forces rather than achieved from within. Indeed, regional co-

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operation is frequently put forward by these forces, and often accepted by poli-ticians in the region, as a conditionality making possible the ultimately suppos-edly more important goals of EU accession and NATO membership rather than as an end in itself.12

Until recently, in SEE itself as well as in Brussels, subregional cooperation was mostly conceived as a condition related to the EU integration process and not as an endogenous process. But this will have to change very quickly, and the work of the RCC should be instrumental in this, as underlined in the first RCC concept paper: “Regional Ownership and Beyond”.13

But there is more: subregional cooperation in SEE must increasingly be understood in a new geopolitical environment. It should indeed be acknowl-edged that the EU has started to focus in a new way on what happens beyond its borders. Three main changes will most probably reframe the EU’s neighbourhood policy (ENP) and its regional policy.14 First, there is the new strategic partnership with the Russian Federation in sight – the negotiations which have been delayed by almost 18 months started in Brussels on 4 July 2008. A far-reaching pact would undoubtedly help to ease tension and con-frontation with Moscow and shape Russian Federation–EU relations in the 21st century. The fact that all the EU members adopted the mandate for talks in May 2008 illustrates the – often missing – unity of the EU. As Mikhail Gorbachev notes: the time seems ripe for a “comprehensive dialogue aimed at constructing an advanced partnership between the European Union and Russia”.15 Second, the EU will have to update its links with the Mediterra-nean neighbours. If not a ‘Mediterranean Union’ – the project pioneered in October 2007 by the French president, Nicolas Sarkozy – then a reloaded ‘Barcelona process’ focusing on concrete and achievable objectives could be a viable, although less ambitious alternative. This is precisely the sense of the EU Commission Communication presented on 20 May 2008, which targets such projects as the clean-up of the Mediterranean Sea, the establishment of new sea routes and highways, and the harnessing of solar energy. The ‘Barce-lona Process: Union for the Mediterranean’ to be launched on 13 July 2008 in Paris may eventually renew the Euro-Mediterranean partnership. Third, the joint Polish and Swedish initiative to launch an ‘Eastern Partnership’ envis-ages an innovative multinational forum between the EU-27 and the neighbouring States of Ukraine, Moldova, Georgia, Armenia and Azerbaijan. 12 Paul Stubbs, “An Anti-social Region? Social and Labour Market Policies in the Western

Balkans,” forthcoming. 13 On 20 May 2008 the RCC published its concept paper: “Regional Ownership and Beyond:

Setting up of the Regional Cooperation Council”, together with the “Strategic Outlook at the Priority Areas of Cooperation in South East Europe,” both available at <http://www.rcc.int>.

14 The last section of this introduction briefly discusses EU’s regional policy. To achieve its objectives, the EU’s Directorate for Regional Policy uses three instruments: the European Fund for Regional Development, the European Social Fund and the Cohesion Fund; see <http://ec.europa.eu/dgs/regional_policy/index_en.htm>.

15 Mikhail Gorbachev, “A new start,” International Herald Tribune, 13 June 2008, p. 4.

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This proposal for a new Eastern Europe Policy, presented first at an EU for-eign ministers’ meeting in Brussels on 26 May 2008, could contribute to a new approach to regionalism and foster the feeble pan-European architecture. Against the backdrop of these three developments, subregional cooperation in SEE will have to be redesigned accordingly. As highlighted by the authors of this volume, a wider policy framework than the present one is an absolute necessity. In fact, all SEE countries in varying degrees also belong to other regions as well: Central Europe, and the Mediterranean and Black Sea re-gions. As Vladimir Gligorov puts it: “The Balkans are a region of overlap-ping regions.”16 Indeed, SEE is less a homogeneous region than a multifac-eted network linked to other networks. It is now time to network these net-works. Of course, proactive and forward-looking regional cooperation fol-lows less the logic of sovereign States and more the notion of mutually as-sured connectivity. In SEE, this means sovereignty, state-building and supra-national cooperation in the framework of EU integration and the wider re-gional cooperation schemes. Politics has to appreciate that nation States are thus still essential, still the main loci of sovereign decision-making, but not the only ones. Formal and state-centric regional cooperation is only one side of the coin; the other implies the need to consider non-state actors, and the ‘bottom-up’ and informal dimensions of regional cooperation. This brings us to the concept of open or ‘new regionalism’ – to use a term analysed exten-sively by Björn Hettne.17 New regionalism is characterised by its “multidi-mensionality, complexity, fluidity and non-conformity, and by the fact that it involves a variety of State and non-state actors, who often come together in rather informal multi-actor coalitions”.18

16 Vladimir Gligorov, “Trade and Investment in the Balkans,” in Vladimir Gligorov and

Hermine Vidović (eds.), On the Way to Normality: The States on the Territory of Former Yugoslavia in the Postwar Period (Vienna: wiww paper, no. 250, 1998), p. 2.

17 Hettne characterises ‘new regionalism’ as the more recent new ‘wave’ or ‘generation’ of regionalism starting in the latter half of the 1980s – thus in the context of the multipolar post-Cold War period and the beginning of globalisation. See Björn Hettne, “Globalisa-tion and the new regionalism: The second great transformation,” in Björn Hettne, András Inotai and Osvaldo Sunkel (eds.), Globalism and the New Regionalism (Basingstoke: Macmillan, 1999). We wish to thank Paul Stubbs for bringing this concept to our atten-tion.

18 Fredrik Söderbaum, “Introduction: Theories of new regionalism,” in Fredrik Söderbaum and Timothy M. Shaw (eds.), Theories of New Regionalism (New York: Palgrave, 2003), pp. 1-2.

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Map 2: Cross-border cooperation in the framework of Interreg IVA (2007–13)

Source: <http://ec.europa.eu/regional_policy/sources/graph/cartes_en.htm> Interregional cooperation does not imply post-sovereignty, but rather com-plements the State level and demands ‘network power’.19 The trans-European programmes – aimed at developing and networking subnational regions – enhanced by the Council of Europe and the EU, illustrate this.20 The Council of Europe (CoE) has sponsored the term ‘Euroregions’: the more than sev-enty Euroregions exhibit a variety of forms, but their work is limited to the

19 See Grewal’s compelling account of network power in David Singh Grewal, Network

Power: The Social Dynamics of Globalization (New Haven: Yale University Press, 2008). 20 See the report written by Rafal Sadowski for the Council of Europe, Similarities and

Differences of the Instruments and Policies of the Council of Europe and the European Union in the Field of Transfrontier Co-operation (Strasbourg: Council of Europe, 2005).

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competences of the local and regional authorities that constitute them – thus, they do not have the political power of States.21 The CoE focused in SEE on decentralisation, development of local democracy and increased citizen par-ticipation; it also contributed to cross-border dialogue and co-operation en-couraging the setting up of Euroregions and similar forms of subregional cooperation, such as, for example, the Local Democracy agencies based on twinning – an initiative set up in 1993 by the Congress of Local and Regional Authorities.22 The strength of the various CoE initiatives lies in the recogni-tion that subregional cooperation involves not only States, but also territorial communities and authorities. Thus, the respective local competencies mat-ters; of course, divergent levels of competencies between regional partners – centralised versus federal states – affect the effectiveness of cooperation.

In the early 1990s the EU developed its own approach to ‘regions in Europe’ in the framework of the trans-European Territorial Cooperation Objective: the Interreg programme – including 27 Member States, Norway and Switzerland – is made up of three strands.23 Strand A targets cross-border cooperation between adjacent regions and aims to develop cross-border social and economic centres through common development strategies. The overall objective is to strengthen the competitiveness of the border regions (see map 2). The framework allows States to tailor the programmes according to the particular situation faced by each border region. Actions typically include promoting knowledge and know-how transfer, the development of cross-border business activities, cross-border training, and joint management of the environment and common threats.

Strand B focuses on transnational cooperation involving national, re-gional and local authorities in order to improve integration within the EU through the formation of large groups of European regions. The map of the 13 current zones for transnational cooperation has been drawn up taking account of the territorial coherence and functional criteria of a geographical nature – e.g., sharing the same river basin or coastal zone, belonging to the same mountainous area or being crossed by a major transport corridor (see map 4). The EU-sponsored actions seek to improve the physical interconnec-tion of territories (e.g., investments in sustainable transport), as well as intan-

21 The legal status of Euroregions varies: it may involve a community of interest without

legal personality, a European Economic Interest Grouping, a non-profit-making associa-tion, a working community without a legal personality or a public body. Most interest-ingly, while some Euroregions include similar levels of authority, such as regions and provinces, others have a mixed structure. The CoE provides the list of Euroregions at < http://www.coe.int/t/e/legal_affairs/local_and_regional_democracy/areas_of_work/transfrontier_co%2Doperation/euroregions/List_of_Euroregions.asp>.

22 See the report of the Council of Europe, Strengthening Local Democracy and Developing Cross-Border Co-operation in South Eastern Europe (Strasbourg: Council of Europe, Di-rectorate of Co-operation for Local and Regional Democracy, 5 December 2006).

23 The EU’s regional cooperation schemes were developed as Interreg I between 1990 and 1993, as Interreg II between 1994 and 1999, as Interreg III between 2000 and 2006; and now as Interreg IV for the 2007-13 period.

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gible connections (networks, and exchanges among regions and among the parties involved). Map 3: Level of participation of European regions in the Interreg IIIC (as of 2005)

Source: <http://www.interreg4c.net> Interreg IIIC Joint Technical Secretariat Strand C concentrates on interregional cooperation with the objective of improving the effectiveness of regional development policies and instruments through large-scale information exchange and sharing of experience. In this framework, enhanced cooperation among Europe’s subnational regions is encouraged in four programme zones (North, East, South and West) and promotes the participation of third countries as widely as possible – espe-cially the EU candidate countries (such as Turkey), Norway, Switzerland and the Mediterranean countries. Contrary to the two above-mentioned pro-grammes, Strand C allows regions without joint borders to work together through common projects and to develop networks of cooperation focusing

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on eight thematic areas: research, technology and innovation; SME develop-ment and entrepreneurship; information society and e-government; employ-ment, social inclusion, human resources and education; environment, risk prevention, energy and natural resources; regional planning, territorial regen-eration and urban development; tourism, heritage and culture; and accessibil-ity, mobility and transport. Map 3 shows the level of participation of the European regions in the 265 different Interreg IIIC (2000-06) projects as of September 2005: while almost all EU regions are involved at least to a cer-tain extent, some are more proactive, such as in Spain, Slovenia, Germany and in the Baltic area. The qualitative results’ analysis demonstrates that exchange and dissemination experience is taking place, and that the bottom-up approach has, to a large extent, fitted the main target group, being demand driven and giving power to regional and local public authorities. 24 The already-mentioned Transnational Cooperation Programme South East Europe is one of the 13 EU transnational cooperation programmes developed by the European Territorial Cooperation objective of the EU Regional Pol-icy.25 Its overall global objective is to improve the territorial, economic and social integration process in SEE and contribute to the cohesion, stability and competitiveness of the area through the development of transnational partner-ships and joint action on matters of strategic importance. More specifically, it targets innovation and entrepreneurship, protection and improvement of the environment, improvement of accessibility, and the development of transna-tional synergies for sustainable urban development. Its format illustrates, first, the structural heterogeneity of SEE: out of the 16 participating coun-tries, eight are EU Member States, six are candidate and potential candidate countries, and two are countries participating in the ENP; and, second, the necessity to work at both State and substate levels: for 14 countries, the pro-grammes involves the whole territory of each country, and for two – Italy and Ukraine – only certain regions (see map 1). The size and complexity of the architecture of this programme attest to the EU’s emergence as a major pro-moter and actor of trans-European regional cooperation.

24 See evaluation of Interreg IIIC included in the EU report, European Regional Develop-

ment Fund 2007–2013. Objective 3: European Territorial Cooperation. Interregional Co-operation Programme INTERREG IVC, 26 July 2007. Interregional cooperation continues for the period 2007-13 under the Interreg IVC programme giving increased focus on inno-vation, competitiveness, the knowledge economy and the sustainable development. Fur-ther information is available on the respective homepages: for Interreg IIIC, see <http://www.interreg3c.net>; and for Interreg IVC, see <http://www.interreg4c.eu>

25 The SEE Transnational Cooperation Programme has been created out of the former Inter-reg IIIB CADSES Programme. For the 2007-13 period, the CADSES transnational coop-eration area has been divided into two spaces: SEE and Central Europe. Some states, such as Austria, Hungary, Italy, Slovakia and the Ukraine, are included in both programmes; see <http://www.southeast-europe.net> and <http://www.central2013.eu>.

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The EU’s wide range of cross-border, transitional and interregional pro-grammes – only the most prominent were mentioned above26 – illustrate the new trend toward regionalism. The multidimensionality, complexity and necessary fluidity of regional cooperation schemes are evidenced by the fact that most EU Member States are simultaneously involved in the different strands and cooperation programmes. As SEE countries are gradually shifting away from post-conflict reconstruction and state-building processes towards fully fledged EU integration and region-building strategies, typical EU in-struments and mechanisms will prevail over such ad hoc programmes as the SAp and SP – now its successor organisation, the RCC. Against this back-ground, regional cooperation will become more relevant: no longer as an externally imposed conditionality, but as an intrinsic necessity in a new geo-political environment. Our concluding remarks will address this issue. Major new challenges have been emerging over the last few years, such as sustainable development and social inclusion, but also the widening of regional disparities in the enlarged community. Accordingly, the EU’s cohesion policy for the period 2007-13 – adopted on 6 October 2006 – articulated a new strategic frame-work around three key objectives: economic convergence, regional competi-tiveness and employment, and European territorial cooperation – the latter enhancing integration in the EU in all its dimensions, including through inter-regional cooperation. Clearly, geography matters. Only enhanced cooperation across the various EU regions provides the adequate framework to speed up economic development and achieve higher growth – and this applies particu-larly to SEE.

What is essential is that SEE countries start to envision these changes and challenges and, accordingly, upgrade their regional identity and regional cooperation schemes in the framework of this complex architecture as a truly European political project.

26 Other main interregional programmes are: the European Programme for Sustainable

Urban Development (URBACT – see <http://urbact.eu>); the Interreg Animation Coop-eration and Transfer (INTERACT – see <http://www.interact-eu.net>); and the European Spatial Planning Observatory Network (EPSON – see <http://www.espon.eu>).

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Map 4: Transnational cooperation in the framework of Interreg IVB (2007–13)

Source: <http://ec.europa.eu/regional_policy/sources/graph/cartes_en.htm>