greece’s balkan policy in a new strategic era

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This article was downloaded by: [The University of Manchester Library] On: 17 November 2014, At: 23:59 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Southeast European and Black Sea Studies Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/fbss20 Greece’s Balkan Policy in a New Strategic Era F. Stephen Larrabee Published online: 19 Aug 2006. To cite this article: F. Stephen Larrabee (2005) Greece’s Balkan Policy in a New Strategic Era, Southeast European and Black Sea Studies, 5:3, 405-425, DOI: 10.1080/14683850500321800 To link to this article: http://dx.doi.org/10.1080/14683850500321800 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms- and-conditions

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Page 1: Greece’s Balkan Policy in a New Strategic Era

This article was downloaded by: [The University of Manchester Library]On: 17 November 2014, At: 23:59Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Southeast European and Black SeaStudiesPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/fbss20

Greece’s Balkan Policy in a NewStrategic EraF. Stephen LarrabeePublished online: 19 Aug 2006.

To cite this article: F. Stephen Larrabee (2005) Greece’s Balkan Policy in a New Strategic Era,Southeast European and Black Sea Studies, 5:3, 405-425, DOI: 10.1080/14683850500321800

To link to this article: http://dx.doi.org/10.1080/14683850500321800

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoeveror howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: Greece’s Balkan Policy in a New Strategic Era

Southeast European and Black Sea StudiesVol. 5, No. 3, September 2005, pp. 405–425

ISSN 1468–3857 (print)/ISSN 1743–9639 (online) © 2005 Taylor & FrancisDOI: 10.1080/14683850500321800

Greece’s Balkan Policy in a New Strategic Era F. Stephen Larrabee*

Taylor and Francis LtdFBSS_A_132163.sgm10.1080/14683850500321800Southeast European and Black Sea Studies1468-3857 (print)/1743-9639 (online)Original Article2005Taylor & Francis Ltd53000000September [email protected]

Developments in the Balkans have always been at the top of Greece’s foreign policy consid-erations. This article reviews Greece’s approach to the region during the Cold War periodand especially since then by attempting to explain why the region holds such a high priorityfor Greece and how the country and its foreign policy elite deal with it. The need for havinga domestic consensus, lining up policy with that of the European Union, working with theUnited States and keeping relations with Turkey on an even keel are some of the conclusionsthe author draws.

Introduction

Historically, Greece’s security has been closely tied to Balkan security. Given itslocation on the periphery of the Balkans, any instability or unrest in the region hasdirect and important consequences for Greece’s own security. As a result, Greece hasbeen highly sensitive to developments in the Balkans and has been a leading proponentof Balkan cooperation and détente.

The 1990s were a period of great challenge for Greece. The disintegration ofYugoslavia led to a sharp deterioration of Greece’s relations with its Balkan neighboursand its western allies. However, since the mid-1990s Greece has undertaken a majordiplomatic effort to improve relations with its Balkan neighbours. This effort hasproven remarkably successful. Today Greece’s relations with the Balkan states are thebest they have been in the post-war period.

The current stability in the Balkans, however, remains highly fragile. In Macedonia,relations between the Slav majority and the Albanian minority are tense, and a futureoutbreak of violence cannot be excluded. In Kosovo, there has been little progresstoward creating a multi-ethnic society. On the contrary, the trend toward separation ofthe Serb and Albanian communities has hardened. In addition, Kosovo’s final status

*Correspondence to: F. Stephen Larrabee, RAND Corporation 1200 South Hayes St, Arlington, VA 222 02. Email:[email protected]

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remains unresolved, while Montenegro and Serbia seem headed for a possible split,which could have destabilising consequences for Bosnia and Kosovo.

In short, it would be premature to consider the Balkans ‘fixed’. To be sure, the regionis not likely to return to the level of violence it witnessed in the 1990s. But the region isstill capable of producing more turmoil. Indeed, the region may be entering a newphase of growing instability that could thrust it back onto the western policy agenda.Thus Greece could face new challenges in the Balkans in the years ahead.

The Cold War Legacy1

Greece’s Balkan policy during the Cold War—and immediately after the collapse ofcommunism in Eastern Europe in 1989—must be seen against the background of theterritorial and ethnic conflicts that were left unresolved by two world wars in the twen-tieth century. During the interwar period Greece’s Balkan policy was aimed at shoringup the territorial status quo in the Balkans against revisionist powers, particularlyBulgaria. However, the efforts at regional cooperation during that period, such as the1934 Balkan Pact between Romania, Yugoslavia, Greece and Turkey and the fourBalkan conferences between 1930 and 1934, failed to make significant progress inresolving the regional conflicts and antagonisms.

The Second World War reinforced many of these antagonisms. Parts of NorthernGreece had been occupied by Bulgaria—a fact that left a strong legacy of ill-will andsuspicion between Sofia and Athens. In addition, Bulgaria, Yugoslavia and Albania hadsupported the communist insurgents during the Greek Civil War (1946–49). Relationswith Albania were further strained by the Albanian treatment of the Greek minorityand by Greek claims on Southern Albania/Northern Epirus.

These developments created a deep sense of threat and insecurity among manyGreeks. Greece saw itself facing a strong and hostile ‘threat from the North’, backed bythe Soviet Union. As a result, Athens’ main foreign policy efforts in the early post-warperiod were directed at cementing strong ties to the West, especially the United Statesand NATO, which Greece saw as the best means of ensuring its territorial integrityagainst claims by its Balkan neighbours (Clogg 1993: 421–435).

The emergence of the Cold War essentially left the Balkans divided into two hostileideological camps. Communist Romania, Bulgaria and Albania were allied with theSoviet Union and members of the Warsaw Pact. Greece and Turkey were allied with theUnited States and members of NATO. Yugoslavia (after 1948) was non-aligned,although it received support from the United States.

With the onset of détente in the 1960s, however, the barriers erected by the Cold Warbegan to erode and Greece’s relations with its Balkan neighbours slowly began toimprove. In the early 1970s, the Greek military junta undertook a series of small initi-atives designed to reduce tensions with its Balkan neighbours. In May 1971 Greeceresumed diplomatic relations with Albania, and in 1973 signed a code of good-neigh-bourly relations with Bulgaria. However, these initiatives were largely designed to offsetthe junta’s increasing diplomatic isolation in Europe and did not constitute a majordiplomatic opening or shift in Greece’s basic foreign-policy orientation.

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The collapse of the military regime in July 1974 ushered in a new period of activismin Greek foreign policy, especially in the Balkans (Stavrou 1980: 149–168; see alsoKofos 1991; Veremis 1995). This new activism was closely associated with PrimeMinister Constantine Caramanlis and bore his personal imprint. It was part of hisbroader effort to expand Greek foreign-policy options and reduce Greece’s heavy reli-ance on the United States. At the same time, it was designed to gain the support ofGreece’s Balkan neighbours against Turkey.

Caramanlis’ Balkan offensive relied heavily on high-level visits and personal diplo-macy. But it also had an important multilateral component. The centrepiece of thiseffort was the convocation of an inter-Balkan summit in Athens in early 1976. While itwas confined to non-controversial areas like the environment, commerce, and tour-ism, the summit allowed Greece to stake out a leadership role in promoting Balkancooperation—and it initiated a series of follow-up meetings over the next decade thathelped to break down many of the barriers to regional cooperation that had beenerected during the Cold War.

Caramanlis’ successor, Andreas Papandreou, continued Caramanlis’ policy of Balkandétente. Papandreou saw Balkan initiatives as a useful means to enhance Greece’s profileas a major promoter of peace and cooperation in the Balkans, as well as a way to assuagethe left wing of PASOK. At the same time, these moves were designed to gain diplomaticsupport in Greece’s dispute with Turkey.

The cornerstone of Papandreou’s policy was the effort to develop a ‘special relation-ship’ with Bulgaria. The rapprochement with Bulgaria was highlighted by the signingof a declaration of friendship, good-neighbourliness, and cooperation in September1986. While the declaration fell short of an alliance, it committed the two countries toconsult one another in case of a threat to the security of either and reflected their sharedconcern about Turkey and ‘Macedonian’ irredentism.2

Papandreou also initiated an important thaw in relations with Albania, droppingprevious territorial claims against Albania (Northern Epirus) and ending the state ofwar that had existed between the two countries since 1940. The thaw led to an increasein tourist and cultural exchanges. However, there was little visible improvement in theplight of the Greek minority in Albania—which had been one of the main goals ofPapandreou’s policy.

At the same time, Papandreou sought to give his policy a sharper multilateral and secu-rity focus. The centrepiece of this effort was his championship of the creation of a BalkanNuclear-Weapon-Free Zone. The initiative revived an earlier Romanian proposal andwas warmly welcomed by Bulgaria, which wanted to see a reduction of US nuclear weap-ons in Greece and Turkey. However, the proposal was strongly opposed by Greece’sNATO allies, as well as by several of Greece’s Balkan neighbours, especially Turkey. Italso provoked resistance among the Greek military and was quietly shelved in 1984.

The Collapse of Greece’s Balkan Policy

At the end of the 1980s, Greece seemed well positioned to play a leading role in theBalkans. The collapse of communism in Eastern Europe and the dissolution of

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Yugoslavia, however, unleashed a new set of regional dynamics that shattered thefoundations of Greece’s Balkan policy and undid many of the positive achievements ofthe previous decade and a half. Rather than a region characterised by increasing coop-eration and détente, the Balkans were plunged into a new period of ethnic violence andchaos, creating significant new security risks for Greece.

For Greece, the dissolution of Yugoslavia posed particular difficulties. During theCold War, non-aligned Yugoslavia had acted as an important buffer between Greeceand the Balkan countries in the Warsaw Pact. It had also served as an importantconstraint on Macedonian irredentism. While differences between Athens andBelgrade emerged periodically, Macedonian nationalism was kept safely under controlas long as Tito was alive. With his death, however, Belgrade’s control over Skopje’spolicy weakened perceptively and Skopje increasingly began to pursue its own inde-pendent policy, especially toward Greece.

While in retrospect it is clear that Greece badly mismanaged its Macedonian policy,Greek concerns had a legitimate historical basis—a fact not well appreciated by manyof its western allies. Historically, the idea of a unified Macedonia had been closely asso-ciated with irredentist claims against Greek (and Bulgarian) territory (Pettifer 2001;Kofos 1990: 103–141; Kofos 1964).3 Greek communists had embraced these claimsduring the Greek Civil War (1946–49). Complaints by Skopje about the Greektreatment of the ‘Macedonian minority’ in Greece kept these fears of Macedonianirredentism alive during the Cold War.

Greek concerns were given greater resonance in the 1980s by the development inthe Socialist Republic of Macedonia of a nationalist ideology of ‘Macedonianism’,which included all Slav-speakers or descendants of Slav-speakers in the wider Mace-donian region (i.e. Greek Macedonia and the Pirin Macedonian region of Bulgaria).This ideology was primarily aimed at the Slavophone Diaspora in Canada and Austra-lia, which contained large numbers of emigrants who had left Greek Macedonia afterthe Greek Civil War, but it had reverberations in Greece (especially Greek Mace-donia), where it was regarded as an assault on the Hellenic heritage of Greeks (Kofos2001: 226–262).

The emergence of an independent Macedonian state rekindled Greek fears aboutMacedonian irredentism. These fears were reinforced by the inclusion of clauses in thepreamble of the Macedonian constitution that could be interpreted as implying thatthe new Macedonian state had territorial claims against Greece4 and by the use of thestar of Vergina—regarded by Greeks as an important national symbol—on the newMacedonian state’s flag.5

These moves unleashed a wave of nationalist fervour in Greece that made compro-mise over the differences with the new Macedonian state (FYROM) very difficult.6

Greece had legitimate security concerns, but its diplomatic management of the issuewas extremely clumsy. As Loukas Tsoukalis (1997: 171) has noted: ‘Greece’s officialmessage transmitted to the world at large was extremely unclear: it was highlyemotional and it referred repeatedly to rights not immediately recognisable by foreign-ers. To make matters worse, the message was delivered in a language that hardly anyoneelse abroad could understand.’

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The result was a foreign policy and diplomatic disaster that alienated Greece’s west-ern allies as well as its Balkan neighbours. Greece was initially able to block EuropeanUnion (EU) recognition of the FYROM. But Greece’s containment policy began tounravel after 1992 as more and more of its European partners—as well as the UnitedStates—broke ranks and began to recognise the FYROM.

Efforts to achieve a compromise over the name were thwarted by internal differenceswithin the ruling New Democracy party between traditional conservatives, led byPrime Minister Constantine Mitsotakis, and ‘maximalists’, led by Foreign MinisterAntonis Samaras, who rejected any use of the name Macedonia in the title of the newMacedonian state (Kofos 2001: 226–263; Veremis 1995: 67–93). In early 1992, Mitso-takis seemed ready to compromise over the name, but his effort was blocked by Sama-ras (Veremis 1995: 76–77).7 With only a slim two-vote majority in Parliament, hecould not afford to take political risks over such a highly divisive issue that touched ondeep feelings of Greek national identity.

Thereafter, both sides became more intransigent. Andreas Papandreou, whoreplaced Mitsotakis as prime minister after PASOK won the October 1993 elections,adopted a strong nationalist line, excluding any compromise over the name of the newMacedonian state. He broke off discussions over the name and imposed a unilateraltrade embargo on the FYROM, which provoked a storm of protest from Greece’s EUpartners and ended up isolating Greece more than it did the FYROM. Elsewhere in theBalkans, Greece also faced difficulties. The collapse of communism in the Balkansbrought to the surface long-suppressed nationalist feelings in Albania. These national-ist feelings manifested themselves in particular over the treatment of the Greek minor-ity in southern Albania. The treatment of the Greek minority, together with the floodof ethnic Albanian refugees into Greece, led to a sharp deterioration of Greek–Albanianrelations.

At the same time, dissolution of Yugoslavia threatened to rekindle Bulgarian nation-alism and generated fears of possible territorial claims against Greece. These fears werestrengthened by Bulgaria’s rapprochement with Turkey after 1990, which threatened toundermine the efforts by the Caramanlis and Papandreou governments in the 1970sand 1980s to improve relations with Sofia. Indeed, many Greeks worried that Bulgaria,with Turkish support, might be tempted to play the ‘Macedonian card’.

Greek concerns were reinforced by Turkey’s renewed activism in the Balkans after1990 (Larrabee & Lesser 2003: 94–97). This new activism was reflected in Turkey’seffort to improve relations with Macedonia, Bulgaria and Albania—three countrieswith large Muslim minorities. Many Greeks feared that Ankara’s diplomatic forays intothe Balkans were designed to create an ‘Islamic arc’ on Greece’s Northern border andthat Turkey might be tempted to play the ‘Islamic card’ by stirring up discontentamong Greece’s own Muslim population in Thrace (Valinakis 1994: 47–49).

The Belgrade–Athens Axis

Faced with growing Turkish assertions and a rise of Albanian and Macedonian nation-alism in the early 1990s, Greece saw Serbia as its natural ally. Ties between Serbia and

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Greece had been historically closer. Both countries were Orthodox and had been alliesin two Balkan wars and two world wars. Moreover, the two countries shared a commondesire to prevent Turkish penetration of the Balkans and a fear of possible Bulgarianirredentism.

Sympathy and support for the Serbs was particularly strong at the societal level.Indeed, it is difficult to explain the ‘unholy alliance’ between Greece and Serbiaduring this period solely in geo-strategic terms. As Tachis Michas (2002: 5) has noted,it was largely a ‘bottom-up’ phenomenon with deep sociological and cultural rootsrather than an elite-driven top-down event. With the collapse of communism, oldpolitical dividing lines in the Balkans were replaced by new ‘civilisational’ and culturaldivisions.

Diplomatically, Greece sought to tread a fine line between its NATO obligations andits desire to keep a line to Serbia. It also did not condemn Serb atrocities as strongly asthe United States or most European countries, and opposed the use of force againstSerbia until early 1994 when Greek policy began to harden. Greek businesses, especiallyoil companies, systematically violated the United Nations embargo on trade withSerbia—often with the knowledge, and if not tacit approval, of the Greek government(Michas 2002: 68–73).

Return to Balkan Détente

By 1994, Greece faced virtual diplomatic isolation and the collapse of its Balkan policy.It was not only at odds with all its Balkan neighbours except Serbia, but also with mostof its western allies, including the United States. Relations with Turkey had also deteri-orated. The growing recognition that Greece’s Balkan policy was at a dead endprompted a reassessment designed to break out of its diplomatic isolation and regaingreater freedom of manoeuvre. As a result, at the end of 1994, Greek policy graduallybegan to evolve in a more pragmatic direction. This shift began in the latter half of thePapandreou era, but it gained greater momentum after Constantine Simitis succeededPapandreou as Prime Minister in early 1996.

In an effort to end Greece’s diplomatic isolation, Simitis embarked upon aconscious attempt to mend fences with Greece’s Balkan neighbours as well as the EU.The release by the Albanian government of the so-called ‘Omonia Five’ paved the wayfor a gradual improvement of relations with Albania (Papondakis 1996: 342–358;Sullivan 1996: 11–16). In March 1996, the two countries signed a friendship and coop-eration agreement during the visit to Tirana by Greek President Constantine Stephan-opoulos—the first visit by a Greek head of state to Albania since the founding of themodern Greek state. The agreement contained provisions for closer economic andmilitary cooperation as well as a regulation of the problems of the Greek minority inAlbania and the status of illegal Albanian immigrants in Greece.8

The latter two issues had been major irritants in bilateral relations. Since then,Greece has moved to legalise the status of hundreds of thousands of illegal Albanianimmigrants in exchange for Albanian help in fighting cross-border crime, while Alba-nia has agreed to open Greek-language schools in Gjrokaster, Saranda, and Delvina in

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southern Albania. These moves removed the two most important stumbling blocks toan improvement in bilateral ties.

The most important improvement in relations, however, was with Macedonia. Thesigning of the Interim Accord between Greece and Macedonia in New York in September1995 was a critical step in this process of rapprochement. While the accord did not resolveall outstanding differences, it served to significantly defuse tensions between the twocountries.9 Since then, relations have improved, especially in the economic field. TodayGreece is Macedonia’s second largest trade partner, after Germany, and the largestforeign investor in the country. Cross-border traffic and tourism have also increasedsignificantly. This has given both sides a stronger stake in keeping relations on a firmpath and avoiding a return to the animosity that characterised relations in the early 1990s.

While the name issue remains unresolved, it has been relegated to the diplomaticback-burner. Negotiations over the name have been quietly going on under theauspices of the United Nations for nearly a decade, but have made little progress.Neither side has shown any serious readiness to change its basic position. The result hasbeen a political deadlock. But this has not seriously hindered the development of rela-tions, especially in the economic field.

Milosevic’s Fall and the Realignment of Greek Policy toward Serbia

Greece’s policy toward Serbia, however, still remained out of harmony with that of itswestern allies. The Kosovo war in the spring of 1999 created a severe test for the Simitisgovernment. The NATO bombing of Serbia unleashed a strong wave of anti-American-ism and pro-Serb feeling among the Greek population. The overwhelming majority ofthe population (nearly 96 per cent) opposed the bombing. The Simitis government hadto tread a delicate line between showing sensitivity to Greek public opinion and main-taining solidarity with Greece’s NATO allies. Despite the strong public opposition tothe bombing, the government bucked popular opinion and supported the bombingcampaign.

Milosevic’s defeat in the September 2000 elections opened up a new chapter inGreece’s Balkan policy. As long as Milosevic was in power, Serbia remained a source ofinstability in the Balkans and a controversial issue in Greece’s relations with its westernallies. However, his ouster removed a ‘black hole’ in the Balkans and brought Greekpolicy back into realignment with that of its western allies.

Since then, Greek and Western policy toward Serbia have been in broad harmony.Greece has been one of the strongest supporters in the EU of Serbia’s democratisationand integration into the European structures. Nearly one-half of the funding forGreece’s National Action Plan for the Reconstruction of the Balkans (265 million) isdirected to Serbia and Montenegro (including Kosovo).

Serbia’s transition, however, is likely to be long and difficult. After a decade of warand misrule by Milosevic, Serbia’s economy remains severely weakened. Western assis-tance is badly needed for recovery. However, this assistance will heavily depend on theKostunica government’s willingness to cooperate with the International War CrimesTribunal in The Hague (ICTY) in handing over indicted Serb war criminals.

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Kosovo also remains a major obstacle to Serbia’s European integration. Discussionbetween Belgrade and Pristina began in Vienna in October 2003, but made littleprogress and have been broken off. There has been discussion of a possible partition ofKosovo’s in some Serb circles. But this is unlikely to be acceptable to most KosovarAlbanians, who continue to insist on full independence. As the same time, theinternational community’s reluctance to squarely address the status issue increases theprospect of a renewed outbreak of violence.

These factors are likely to complicate Serbia’s transition and affect the nature ofGreece’s ties to Serbia. Greece will need to operate within the basic parameters of EUpolicy and to stay broadly in step with the policies of its European allies. Thus Greece’sroom for manoeuvre vis-à-vis Serbia is limited to a large extent by outside factors overwhich it has limited control, particularly the pace of Serbia’s own transition and itsreadiness to cooperate with the ICTY.

The Economic Dimension

The improvement of Greece’s relations with its Balkan neighbours has been particu-larly visible in the economic sphere. Beginning in the late 1990s, Greece has consciouslysought to exploit its status as the economically most advanced and politically moststable country in the Balkans to expand trade and investment in the region. Thisstrategy has been remarkably successful. Today Greece is the single largest investor inthe Balkans. Greek commercial activity and investments have shaped, and willcontinue to shape, key sectors of the Balkan economies, especially the banking, foodand telecommunications sectors, for years to come (Bastian 2004: 458–490).

Greece’s investment offensive has been the result of a strategic decision to exploitits natural advantages of geographic proximity and knowledge of the local languagesand cultures. Several aspects are striking about Greece’s economic penetration of theBalkans. First, it has not been driven by a desire to achieve quick short-term results,but has been part of a long-term strategy aimed at increasing returns over time. TheGreek Diaspora has played a critical role in the economic expansion. Theirknowledge of the languages and customs of the Balkan countries was an enormousasset to Greek entrepreneurs who spearheaded the first investment efforts in theearly 1990s.

Second, it has been region wide and has not been limited to one country or selectedsectors, although certain sectors such as banking and telecommunications havereceived high priority. In all six Balkan countries, Greek state-owned companies are thelargest single investors. The leading investors have been state-owned companies,especially banks and telecommunications firms. Private investment has been nowherenear as large as state-owned companies.

Third, the Greek investment offensive was undertaken without any meaningfulforeign competition. Greece literally had the Balkan economic field all to itself. Notuntil 2002–03 did other foreign inventors begin to invest in the Balkan market (Bastian2004: 459). This absence of foreign competition allowed Greek firms to establish amarket advantage early, which they then consolidated and expanded.

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Greek banks spearheaded the investment drive in the Balkans. Initially Greek banksfocused on acquiring banking operating licenses. This allowed them to establish a pres-ence in the Balkan markets. Later, as the privatisation process took root, the banksshifted to acquiring major shareholdings in Balkan banks. This aggressive drive toacquire shareholdings, especially in Romania, Bulgaria and Macedonia, acted as acatalyst for other small and medium-sized firms to increase their investments in theseeconomies.

Telecommunications firms also played a major role in pushing the investment drive.In four of the six Balkan countries, Hellenic Telecom (OTE) or one of its subsidiariesis the single largest investor. The state-owned sector has been particularly active inMacedonia. There almost all the Greek direct foreign investment has been by threestate-owned companies—the National Bank of Greece, EC.PE (oil production anddistribution) and OTE (telecommunications).

The major exception to the expansion of Greek trade and investment in the Balkanshas been Turkey. While trade has expanded since 1999, it still remains low in compar-ison with other Balkan countries. Moreover, there is a strong imbalance in invest-ments. While Greece has begun to increase its investments in Turkey in the past fewyears, there has been very little Turkish investment in Greece. The main reason for thelow level of trade and investment has been the political differences between the twocountries over the Aegean and Cyprus. However, this is likely to change if relationscontinue to improve, and especially if the EU agrees to open accession negotiationswith Ankara.

Looking to the future, Greek firms are well positioned to take advantage of the priva-tisation process in the Balkan states. While the banking and telecommunication sectorsmay be reaching a saturation point—there are few state-owned banks and telecommu-nications firms not in Greek hands—other sectors, especially energy and transportinfrastructure, could provide important new markets for Greek investment. Moderni-sation of the Balkan transport infrastructure will be a key priority in the coming years,and Greek construction companies are well positioned to exploit the opportunities thatare likely to open up in this area. Thus the strategic economic investment Greece hasmade in the Balkans over the past few years is likely to continue to pay importantdividends and enable Greece to benefit from the Balkan countries’ growing need forinvestment capital in the coming decade.

Multilateral Cooperation

Greece has been a leading proponent of multilateral cooperation in the Balkans sincethe mid-1970s. Both Caramanlis’ and Andreas Papandreou’s Balkan policies hadimportant multilateral components. Their initiatives greatly contributed to promotinggreater regional détente. Indeed, the late 1980s are often seen as the ‘golden age’ ofBalkan cooperation (Veremis 1995: chapter 2; Kut & Sirin 2002: 10–22).

The disintegration of Yugoslavia and the outbreak of the Bosnia conflict interruptedefforts at multilateral cooperation. After 1995, however, Greece began to play an activerole in promoting multilateral cooperation in the Balkans. Together with Bulgaria,

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Greece helped establish the Southeast European Cooperation Process (SEECP), whichincludes Albania, Bosnia and Herzegovina, Bulgaria, the Federal Republic of Yugosla-via (Serbia and Montenegro), Macedonia (FYROM), Greece, Romania, and Turkey.Annual meetings are held at the level of heads of state, and regular meetings are alsoheld at the foreign ministers’ level.

In recent years, the SEECP has focused on the development of transportation infra-structures, connecting regional energy networks, fighting organised crime and thedevelopment of telecommunications. However, the SEECP is largely a high-leveldiscussion forum rather than a serious mechanism for implementing regional cooper-ation. It does not have a budget or secretariat (something favoured by Greece). Theorganisational management is in the hands of the presidency, which rotates on anannual basis. Thus the organisation’s effectiveness largely depends on the capabilitiesand will of the chairman-in-office.

Regional military cooperation has been given important impetus by the establish-ment of a multinational peacekeeping brigade in the Balkans—the Southeast EuropeanBrigade (SEEBRIG). The SEEBRIG is composed of units from Greece, Turkey, Italy,Romania, Bulgaria, Macedonia and Albania. Initially located in Plovdiv, Bulgaria,SEEBRIG’s headquarters were transferred to Constanta, Romania in 2003. While themilitary effectiveness of the brigade has yet to be seriously tested, it has provided auseful mechanism for enhancing interoperability and building regional trust.

Maintaining momentum behind multilateral cooperation in the Balkans in thefuture, however, may prove difficult. Most countries in the Western Balkans aremore interested in increasing bilateral cooperation with the EU than they are inexpanding cooperation with each other. Moreover, there is an inherent tensionbetween the two basic pillars of EU policy toward the Western Balkans: the StabilityPact, which is designed to promote regional cooperation; and enlargement, whichemphasises bilateral relations with the EU. The Stability Pact is supposed to createincentives for regional exchange and cooperation. But the Western Balkan countriesknow that they have to prepare for competing with the EU market, so they tend togive priority to increasing trade with the EU, not with their Balkan neighbours. Thusthe powerful incentives of enlargement undercut the incentives for regional coopera-tion.

In addition, many of the countries of the Western Balkans fear that regional cooper-ation is seen as a substitute for EU membership. This has dampened their enthusiasmfor such cooperation (a similar reaction occurred among the Visegrad countries in theearly 1990s). There are also fears that the Western Balkans will be treated as a bloc andthat the chances of the stronger members of the bloc for EU membership will be slowedby the performance of the weaker members.

Finally, Bulgaria and Romania increasingly see their future within a European ratherthan in a Balkan framework. The same is true for Croatia—which has long tried to‘escape’ from the Balkans and sees itself as a part of Central Europe, not the Balkans.And, in the coming decades, Turkey is likely to concentrate more intensively on EUintegration and strengthening regional cooperation in the Black Sea region, especiallyin the energy field.

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The European Union and the Western Balkans

Greece’s policy in the Balkans is increasingly shaped by its membership in the EU andby EU policy. These factors provide the broader context for the pursuit of Greek inter-ests in the region. Greece’s Balkan policy in the early 1990s—especially toward Mace-donia—was out of step with EU policy, and Greece’s relations with its EU partnerssuffered significantly because of it. Since the mid-1990s, however, Greek policy hasbroadly been in harmony with EU policy. This has given Greece’s Balkan policy a muchmore ‘European’ flavour.

At its summit in Thessaloniki in June 2003, the EU set out a broad strategy for inte-grating the states of the Western Balkans. The strategy announced at Thessalonikimade clear that the EU regards the Western Balkan states as potential EU membersdown the road. However, the EU failed to set a firm date or roadmap for membership.The main mechanism for promoting their integration is the Stabilization and Associa-tion Agreements, which so far have been signed with Croatia and Macedonia. Discus-sions are also currently underway with Albania.

However, with the exception of Croatia, significant obstacles exist to the integrationof the countries of the Western Balkans into the EU. Compared with the rest of Europe,the countries of the Western Balkans are considerably poorer and less developed.(Croatia is a partial exception.) In 2002, the per-capita Gross Domestic Product (GDP)of the Western Balkans (minus Croatia) was 22 times lower than the average per-capitaGDP in the EU, 4.3 times lower than that of the 10 new members admitted in May2004, and one-half that of three Balkan candidates Bulgaria, Romania and Croatia(Calic 2004: 7).

In addition, the countries of the Western Balkans are characterised by deep regionaland sectoral differences between North and South. Croatia’s per-capita GDP is threetimes higher than that of Bosnia-Herzegovina and five times higher than that of Albania.These differences are likely to increase now that Croatia has officially become a candidatefor EU membership and is eligible for special EU assistance for candidates. The WesternBalkan countries are also characterised by high levels of unemployment, crime andcorruption as well as unresolved ethnic problems (Journal of Southeast European andBlack Seas Studies 2004; Minchev 2002: 105–118). They thus have a long way to go beforethey meet the Copenhagen criteria for membership (Altmann 2005: 14–23).

Since the end of the Kosovo war, moreover, other issues—Iraq, digesting the secondround of enlargement, Turkey and ratification of the EU Constitution—have movedto the top of the EU agenda. Integrating the 10 new members who joined in May 2004will require the EU to reform many of its institutions, especially its Common Agricul-tural Policy. The prospect that Bulgaria and Romania—and possibly Croatia—mayjoin around 2007–08 heightens the urgency of carrying out structural reforms beforeproceeding with another major round of enlargement.

In addition, Turkish membership has emerged as an important—and increasinglycontroversial—issue on the EU agenda. Accession negotiations with Ankara opened inOctober 2005 and are likely to take a decade or more, with no assurance of success. IfTurkey comes in, the way could be open for Ukraine and other countries as well. Thus

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Turkish accession has prompted a growing debate within the EU not only about thewisdom of Turkish membership, but also the limits of enlargement and Europe’s‘identity’ more broadly.

Ukraine’s ‘Orange Revolution’ is likely to accentuate the EU’s dilemmas. As long asPresident Kuchma was in power, the question of Ukraine’s candidacy was a mootpoint. However, the election of Viktor Yushchenko has cast the issue of Ukraine’scandidacy in a new light. If Yushchenko’s reform course succeeds, pressure is likely togrow for the EU to rethink its policy toward Ukraine and Ukrainian membership.

In short, the EU has a very full agenda in the coming decade. This agenda has becomeeven more complicated now that the Constitutional Treaty has been rejected by somemember states. As a result, the momentum behind the integration of the WesternBalkans could slow. Indeed, ‘enlargement fatigue’ is already visible among many EUmembers. This has led some observers to suggest a type of ‘junior membership’ for theWestern Balkans involving a step-by-step process of integration (Altmann 2005: 24–25;Calic 2004). This would give the countries of the region time to make the necessaryeconomic and political adjustments and keep the integration process alive.

The American Connection

Greece will also need to keep a strong diplomatic line open to Washington. During theCold War, Greek and US policy toward the Balkans were largely in harmony. Bothsought to deter an expansion of Soviet influence in the Balkans and promote centrifu-gal forces in the region. They also strongly supported the independence and territorialintegrity of Yugoslavia, both as a bulwark against Soviet expansion in the Balkans andas a constraint on Macedonian irredentism.

However, the collapse of Yugoslavia led to increasing divergence in US–Greekpolicy. Greece’s attempt to isolate Skopje in the early 1990s put Greece at odds not onlywith many of its European allies but also with the United States. Washington regardeda settlement of Greek–Macedonian differences, especially the lifting of the Greekembargo against Skopje, as an important element of its broader effort to broker aBosnian settlement and stabilise the Balkans.

The US-led NATO air campaign against Serbia created new tensions between Athensand Washington. Greek public opinion was overwhelmingly opposed to bombingSerbia. The bombing sparked a new wave of virulent anti-Americanism that almostforced President Clinton to postpone his October 1999 visit to Athens. During the visit,Athens looked more like Belgrade, with mass rallies and the burning of the AmericanPresident in effigy, than it did the capital of a ‘friendly’ NATO ally.

The end of the Kosovo conflict and the ousting of Milosevic have defused the mostvirulent aspects of anti-Americanism. However, an outbreak of new instability in theBalkans could severely test—and possibly shatter—this newfound harmony and giverise to a new outburst of anti-American sentiment.

Two issues in particular could pose new problems. One is Macedonia. The US deci-sion in November 2004 to recognise Macedonia under its constitutional name of theRepublic of Macedonia prompted a strong protest from Athens. Many Greeks regarded

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the move as a stab in the back. Whether the decision will have a deeper long-termimpact on US–Greek relations remains to be seen, but the strong Greek reactionunderscores the continued sensitivity of the issue for Athens.

Differences could also arise over Kosovo. Greece opposes independence for Kosovo,fearing this could strengthen Albanian irredentism and possibly destabilise Macedonia.The US position is more ambiguous. While Washington has not openly defined itsposition on Kosovo’s final status, it has not ruled out independence at some point inthe future. This more open-ended attitude could provoke new strains as the issue ofKosovo’s status moves to the forefront of the Balkan agenda in 2005.

Overarching these differences on specific issues is the broader uncertainty about thefuture US role in the Balkans. In the 1990s, the United States played a critical role inending the Bosnian conflict and stopping the ethnic cleansing in Kosovo. Since 9/11,however, US attention has been deflected away from the Balkans, as Washington hasbecome increasingly preoccupied with the war on terror and Iraq. As a result, theBalkans have largely dropped off the US radar screen.

With the United States bogged down in Iraq and US forces stretched thin, pressurefor a US military withdrawal from the Balkans could grow. So far the Bush administra-tion has resisted such pressure. But this may become harder in the future if thesituation in Iraq deteriorates. Indeed, over the longer run, the Balkans are increasinglylikely to become an EU responsibility.

The Turkish factor

Relations with Turkey will also be an important, indirect factor affecting Greek policyin the Balkans. Turkish activism in the Balkans in the early 1990s caused considerableconcern in Athens and gave added impetus to Greek–Turkish tensions at the time.Many Greek officials and analysts saw this Turkish activism as part of a calculated effortby Ankara to ‘encircle’ Greece and create a ‘Muslim arc’ of client states on Greece’snorthern border.

Turkey’s rapid recognition of the FYROM in February 1992, in particular, set offalarm bells in Athens. These concerns were reinforced by Turkey’s rapprochement withBulgaria in 1991–93 and Albania after 1991. Greece’s effort to forge close ties to Serbiaafter 1990 was in part motivated by a desire to counter Turkish efforts to expand itsinfluence in the Balkans.

However, the thaw in Greek–Turkish relations since 1999 has served to foster a newclimate of trust and cooperation between Ankara and Athens. Both sides have come torecognise that they share a common interest in preventing the spread of instability inthe Balkans. During the Kosovo conflict, the two countries cooperated closely toprevent a spillover of the conflict to other parts of the Balkans. This growing conver-gence of interests has helped to temper the political rivalry in the region as well as givinggreater impetus to the broader process of détente between the two countries.

Continued Greek–Turkish cooperation in the Balkans will be heavily dependent onthe overall state of relations between the two countries. If the current Greek–Turkishdétente were to stall, it could affect relations in the Balkans. However, in recent years

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the process of détente has deepened and developed a momentum of its own. It also hasa much broader base of social support than earlier efforts at détente.

Moreover, there is strong bipartisan support for pursuing rapprochement withAnkara. The current Greek government of Costas Caramanlis has pursued the samebroad policy toward Turkey as the Simitis government. Like its predecessors, the govern-ment sees a ‘Europeanised’ Turkey as being in Greece’s long-term national interest andsupports Turkish membership in the EU if Turkey meets the Copenhagen criteria.

Trouble(s) Ahead?

In many ways, Greece has reason to be satisfied as it looks at the Balkans today. Its rela-tions with its Balkan neighbours are the best they have been since the end of World WarTwo. In addition, in the past decade, the security environment in the Balkans hasimproved significantly. However, the current stability in the Balkans is highly fragile.Indeed, the Balkans could be facing a period of renewed instability. Looking ahead,there are several potential trouble spots looming on the horizon.

Macedonia

From the Greek perspective, the most worrisome is Macedonia. The ethnic tensionsbetween the Slav majority and Albanian minority in Macedonia pose a serious threatto Balkan stability—and to Greek security. Significant unrest in Macedonia couldresult in a large influx of refugees into Greece and put additional burdens on Greece’ssocial structure, already strained by having to absorb over 400,000 Albanian immi-grants in the past decade. New unrest could also spill over into Kosovo, inflaming thesituation there.

Macedonia’s future will depend to a critical extent on how the Slav majorityaddresses the concerns of the Albanian minority and its willingness to give theAlbanians a stake in Macedonia’s economic and political life. Unless the Albaniancommunity feels a stronger sense of ownership in the Macedonian state, ethnicunrest—and secessionist pressures—are likely to grow. The high birth rate among theAlbanian population argues for addressing these problems now rather than later whenthe Albanian population has increased its numerical and political strength.

Moreover, in recent years there has been an important shift within the Albaniancommunity in Macedonia toward greater moderation. In the past few years, AlbanianMacedonian goals have centred around three pillars: stability, acceptance ofMacedonia in European processes, and the eradication of inequalities between theAlbanian minority and the Slav majority (Kofos 2002: 151–172).10

This mirrors a broader shift within the Albanian community toward greater moder-ation in recent years. This has been particularly pronounced on the part of the Albaniangovernment, which has openly disavowed the creation of a Greater Albania as a policygoal. However, if the aspirations of the Albanian moderates in Macedonia for greaterequality are not met, power may pass into the hands of more radical elements, ashappened in Kosovo after the conclusion of the Dayton Accord.

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The near crisis over the referendum in November 2004 underscores the fragile ethnicstability in Macedonia. The referendum called for the repeal of a law giving greater localcontrol for the Albanians in a number of towns. Had the referendum passed and thelaw been repealed, it would have undermined a key provision of the Ohrid peaceaccord, which ended the fighting between Albanian guerrillas and the Macedoniangovernment in 2001, and could have led to an outbreak of new ethnic violence. Whilethe referendum failed, the controversy over the referendum highlights the degree towhich relations between the Albanian community and the Slav majority in Macedoniaremain dangerously polarised.

Kosovo

The second potential flashpoint is Kosovo. Despite some progress toward restoringpolitical order since the end of the Kosovo war, Kosovo is far from stable. Local, polit-ical institutions are weak; the economy depends heavily on international support;foreign direct investment is almost non-existent; and there has been little progresstoward ethnic reconciliation between the Albanian majority and Serb minority. Thetwo ethnic groups live in segregated, mutually hostile communities. Key services, suchas public health, are not integrated. The lack of integration makes a mockery of thebasic UN goal of developing a multi-ethnic society in Kosovo.

In addition, Kosovo’s final status remains unresolved. The international communityhas continued to insist on ‘standards before status’; that is, that Kosovo must firstcreate functioning democratic institutions before the status issue can be addressed.While this position made sense in the initial period after the end of the Kosovo conflict,it is questionable whether it still does. The longer the status issue is postponed, thegreater the danger of a renewal of ethnic violence, as Albanian frustrations grow.The danger is that the Albanian moderates will be weakened and power will pass intothe heads of the radicals, as happened in the period after the signing of the DaytonAccords.

The international community needs to develop a coherent long-term vision forKosovo’s future (Triantaphyllou 2001). The current western position—support forautonomy within a federated Yugoslavia—is not tenable over the long run. It has nosupport among any of the key actors in Kosovo—including moderates like PresidentRugova—and is not going to be acceptable to the majority of Kosovar Albanians evenif Serbia further democratises.

The international community needs to begin to develop a clearer roadmap regardingKosovo’s final status. Without a clearer perspective on its political status, the influenceof the hard-liners within the Albanian community in Kosovo is likely to grow. ManyKosovar Albanians could begin to regard the international community, rather than theSerbs, as the main obstacle to self-determination. The unrest in March 2004—whichresulted in 19 deaths and hundreds of wounded—is a warning sign in this regard.

Many members of the international community continue to favour some form ofautonomy for Kosovo within a loose Yugoslav Federation. So do most Serbs. Thiswould avoid the further fragmentation of the Yugoslav Federation and reduce the

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chances that Kosovo’s independence would spark separatist pressures elsewhere (i.e.Bosnia and Macedonia). However, there are two problems with this solution. First, itis totally unacceptable to the majority of Kosovo Albanians. Second, the YugoslavFederation may break up anyway if Montenegro decides to leave the Federation, asseems increasingly possible (see later). Thus, in the end, it is not very realistic.

A second solution is some form of partition. This is favoured by parts of the Serbianelite. But here again there are serious problems. The first is that partition is unaccept-able to the Kosovar Albanians. Second, some Serbs would still be left in SouthernKosovo (i.e. the Albanian part). They would be forced to live under Albanian rule—hardly an attractive prospect—or emigrate to Northern Kosovo or Serbia proper. Inaddition, the Serbian part of Kosovo might opt to join Serbia. Third, most of the Serbcultural heritage, especially the most important monasteries, is in Southern Kosovo.Partition would thus leave them in Albanian hands. Finally, partition runs counter tothe international community’s attempt to promote functioning multicultural states inthe Balkans. In effect, the end result of partition would be to create two ethnicallyhomogeneous states—just what the initial intervention by the international commu-nity was supposed to prevent. Moreover, partition could spark separatist pressures inBosnia and Macedonia.

A third possibility would be to make Kosovo an international protectorate. But theUnited Nation’s record of administrating Kosovo has not been very good and there isno reason to believe that it is likely to improve significantly in the future. Moreover,experience shows that protectorates tend to encourage dependency rather than creat-ing incentives for the protectees to develop greater self-sufficiency and responsibilityfor their own affairs. This has been the case in Bosnia. Thus Kosovo could become anincreasing burden on the international community, and at some point western popu-lations could tire of paying the burden.

In the end, some form of ‘conditional independence’ seems the most likely and satis-factory solution. Under this scheme, power would be transferred from the internationalcommunity to democratically elected institutions in Kosovo (Rupnik 2001: 69–84).However, independence would be made contingent on certain conditions:

● The establishment of effective, truly democratic political institutions.● Respect for minority rights, especially the rights of the Serbian community in

Kosovo.● Respect for the territorial integrity of its neighbours, above all Macedonia.● Complete freedom of movement of the Serbian community in Kosovo and Serbia to

visit Serbian churches and other important Serbian cultural sites.

Such a solution would have a number of advantages. First, it would allow time fordemocratic institutions in Kosovo to take firm root. Second, it would allow an orderlytransition under international supervision. Third, it would make independencecontingent on the fulfilment of specific conditions, especially respect for the bordersof Kosovo’s neighbours. Finally, it would provide a roadmap for the Kosovar Alba-nians that allows for independence but makes it conditional on fulfilment of specificconditions.

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The biggest problem is that conditional independence would require Serbia to giveup sovereignty over Kosovo, which has been regarded by Serbs as an integral part ofSerbia since the Middle Ages. This would be a bitter pill for any Serb government toswallow. Against this, however, must be weighed the political, economic, and socialcosts to Serbia of trying to maintain control over Kosovo. Over the long run, trying tohold on to Kosovo is likely to suck Serbia into a quagmire of endless violence andrepression and to create major obstacles to its internal democratisation and integrationinto Europe.

Any resolution of the Kosovo issue, however, will have to provide protection for therights of the Serb minority, which continues to face discrimination and deprivation ofbasic rights. It will probably have to include some form of ‘functional autonomy’ thatwould give the Serb minority a high degree of self-rule in the areas where they liveYannis 2002: 184–186; Yannis 2001). While many Kosovar Albanians oppose this, it isprobably the only viable way to ensure that the rights of the Serb minority areprotected.

Serbia-Montenegro

A third potential flashpoint is posed by the possible break up of the union betweenSerbia and Montenegro. The union treaty concluded between Serbia and Montenegroin March 2003 allows a right of withdrawal after three years (i.e. by 2006). Montene-gro’s President Milo Djukanovic has threatened to hold a referendum on Montene-gro’s future participation in the Union. Most polls show that more than one-half of theMontenegrin population would vote for separation. Support for a separation is alsogrowing on the Serb side. Many Serb liberals see Montenegro as an obstacle to Serbia’sintegration in to the EU.

The United States and the EU have sought to discourage the break up of the union,in particular because they fear it could reinforce separatist pressures in Kosovo andBosnia. But as with Yugoslavia in 1990–91, it is probably too late to keep Humpty-Dumpty together. The centrifugal forces are simply too strong—a fact that the EU andwestern governments are slowly beginning to recognise.

Montenegrin independence, however, would not present the same dangers todaythat it would have when Milosevic was in power. Then it might have led to anattempted coup or civil war. Today the break up is more likely to resemble the ‘velvetdivorce’ between the Czech Republic and Slovakia in 1993 than spark large-scale civilstrife. Indeed, some Serbs would even welcome a separation.

The Broader Regional Context

In short, the Balkans could be facing a period of new instability that could pose newchallenges for Greek diplomacy. However, the regional context in which these problemshave to be addressed is much more favourable today than it was in the 1990s. First ofall, Milosevic is gone. Serbia now has a democratic government. While the nationalists

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remain an important political force, the situation is far better than it was in the 1990swhen Milosevic was in power.

Second, the Macedonian issue has been significantly defused as an issue in Greekinternal politics. While differences with Skopje over the name of the Macedonian statecontinue to exist, the name issue does not have the same emotional resonance that ithad in the early 1990s. At the same time, the closer economic cooperation that hasdeveloped over the past decade gives both sides a strong interest in keeping relations onan even keel.

Third, Greek–Turkish relations are today much better than they were a decade ago.Thus the chances that instability in the Balkans could lead to renewed rivalry betweenAthens and Ankara are significantly diminished. Indeed, renewed instability in theBalkans could actually give new impetus to Greek–Turkish cooperation, since bothcountries share a common interest in containing any spill over of violence.

Fourth, Greece’s relations with Albania are today a lot better than they were a decadeago. At the same time, support for a Greater Albania has diminished. While Albaniansin Albania continue to maintain a strong interest in the fate of their kinsmen in theformer Yugoslavia, especially Kosovo, the main emphasis of successive Albaniangovernments over the past decade has been on internal reform, not the creation of aGreater Albania. Even the first Berisha government—which was much more national-istic than its successors—did not openly promote accession of the Albanians in theformer Yugoslavia or call for the creation of a greater Albanian state.

In the past several years, the Albanian government has played a stabilising role in theBalkans. It has explicitly rejected the idea of a Greater Albania and has emphasisedinstead the need to make borders more open and porous. During the Macedonian crisisin 2001, the government went out of its way to appeal for moderation and asked NATOto patrol Albanian borders to prevent its borders from being used for attacks by theinsurgents of the National Liberation Army.

In Bulgaria, too, there has been a decline in nationalist sentiment. Today the Mace-donian issue does not engender the type of passions it did in some Bulgarian circles inearly 1990s. At the same time, relations between Athens and Sofia have significantlyimproved. Both these developments are reassuring and mean that Greece can be morerelaxed about the possibility that Bulgaria might be tempted to exploit future instabilityin Macedonia for its own purposes.

Fifth, Russia is no longer a major factor in the Balkans. Russia has withdrawn itsforces from the Balkans and shows little interest in trying to get seriously involved inthe region again. Thus the danger that Russia will try to exploit any new conflict in theBalkans for its own political purposes is greatly reduced. This should make resolutionof future problems easier.

Finally, the EU is a stronger regional and global actor today that it was a decade ago.It has also become more deeply engaged in the Balkans militarily as well as economi-cally and politically. The EU’s Balkan policy has given the countries of the WesternBalkans a perspective on integration that did not exist a decade ago. This is not a guar-antee against future unrest, but it does mean that most governments in the region havea stronger stake today in Balkan stability than was the case a decade ago.

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Conclusion

These factors should make it easier for Greece to navigate the troubled Balkan watersthat may lie ahead. However, as they seek to forge a Balkan policy, Greek policy-makerswill face four critical challenges.

The first challenge will be to maintain the domestic consensus behind Greece’sBalkan policy. Over the past decade, a general consensus has existed regarding Greece’sapproach to the Balkans. This consensus could begin to erode in the face of newviolence or instability. Some Greek politicians might seek to exploit the instability forpartisan political purposes, as Samaras did in the early 1990s. This could make thepursuit of a coherent Balkan policy much more difficult.

The second challenge will be to keep Greece’s Balkan policy broadly in line with thatof its European allies. Greece’s failure to do this in the early 1990s resulted in its diplo-matic isolation. A similar situation nearly occurred during the Kosovo crisis, but theSimitis government bucked popular opinion and supported the air campaign againstSerbia. Greece, therefore, needs to do its utmost to avoid becoming isolated from itskey European allies.

Third, Greece will need to maintain good ties to Washington and ensure that theUnited States remains actively engaged in the pursuit of peace and stability in theBalkans. In the coming years, pressure is likely to grow for the United States to disengagefrom the Balkans in order to concentrate on Iraq and the war on terrorism. The Bushadministration wisely resisted these pressures in its first term, but this may be harderto do in the future if the situation in Iraq deteriorates or another crisis arises elsewhere.

A total US withdrawal from the Balkans in the near future could be destabilising andencourage extremists to resort to violence to achieve their political objectives. ThusGreece will need to work closely with its European allies to ensure that the United Statesremains politically—and militarily—engaged in the region. What is needed is a part-nership in which the EU takes the lead while the United States provides importantpolitical and military back-up support.

Finally, Greece will need to keep relations with Turkey on an even keel and deepenthe détente process pursued since 1999. A deterioration of relations with Ankara wouldmake problems in the Balkans harder to manage, and possibly even provoke a newstruggle for influence in the region. Thus deepening the détente with Turkey should bea high priority, both for its own sake and in the interests of stability in the Balkans.

Notes1. [1] See Larrabee (1999: 313–335).2. [2] The declaration caused some concern among Greece’s western allies, some of whom feared

that it could weaken Greece’s ties to the West. Such fears, however, were exaggerated andreflected more western suspicions of Papandreou’s motives than the actual text of the declara-tion, which only called upon the two sides to consult during a crisis, not to render aid ormilitary assistance to one another. Moreover, the declaration made it quite clear that it didnot affect the rights and obligations under other agreements or alliances to which the twocountries belonged.

3.

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[3] A detailed discussion of the Macedonian issue is beyond the scope of this essay.4. [4] The preamble of the constitution made reference to the Anti-Fascist Assembly of the National

Liberation of Macedonia of 1944, which referred to the ‘unification of all Macedonian people’(i.e. those living in Greece and Bulgaria as well).

5. [5] The star of Vergina was found on the tomb of Philip of Macedon—Alexander the Great’sfather—at the site of Vergina in 1978 by the Greek archaeologist Manolis Andronikos. Greekstherefore considered it an important symbol of their national heritage.

6. [6] For the sake of brevity, in this essay the term Macedonia and the abbreviation FYROM(Former Yugoslav Republic of Macedonia) are used interchangeably to refer to the Republicof Macedonia.

7. [7] At the Lisbon conference of EU foreign ministers in February 1992, Portuguese ForeignMinister Joao di Deus Pineiro produced a package of confidence-building measures thatincluded a proposal that the new Macedonian state be called ‘New Macedonia’. However,under pressure from Samaras, the Greek government rejected the proposal. The ‘Pineiropackage’, as it came to be known, was probably Greece’s best moment for a negotiatedsettlement.

8. [8] ‘Der erste griechische Staatsbesuch in Albanien’, Neue Zuercher Zeitung, 23 March 1996. Seealso Griechenland und Albanien kommen einander naeher’, Frankfurter Allgemeine Zeitung,25 March 1996.

9. [9] Under the accord, Skopje agreed to remove the sun of Vergina from its flag and eliminate thepassages from its constitution that could be interpreted as implying that the FYROM hadterritorial claims against Greece—two of Greece’s main concerns. In return, Greece agreed tolift the embargo against Skopje, which it officially did a few weeks later. In addition, the twosides agreed to quietly continue discussions over the name of the new Macedonian state.

10.[10] The key question is whether this is just a tactical shift in the pursuit of essentially the samestrategic goals of unification of all Albanians in the ‘Albanian space’ or whether it represents abroader strategic shift in Albanian national goals.

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