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Update No: 126 - (26/11/07)

Independence for Kosovo- to be or not to be?
Serbia is on the brink. Nothing can be more important to a state than its territorial integrity. Serbia's is shortly to be decided.

The United Nations is scheduled to deliver a report on Kosovo's final status December 10, and Kosovo Prime Minister Agim Ceku has said he will declare the province's independence from Serbia within days of that date, regardless of any objections from Serbia, or the likes of Russia, which has said it would veto recognition of the new country in the U.N. Security Council.
The countdown is on.

Brussels is critical
Meanwhile for Serbia the EU beckons as a more promising prospect - eventually. 
But the European Commission is proving fractious. Sharp divisions among political parties in Serbia have been affecting the overall pace of reform, which has slowed down, the latest Brussels report says. "Nationalistic rhetoric remains strong and has negatively affected the political climate", the Commission notes, and adds that the Kosovo issue has continued to dominate the political agenda.

The Serbian government, according to the report, has managed to achieve early positive results in cooperation with The Hague Tribunal, which enabled the European Commission to finalize negotiations on a Stabilization and Association Agreement, SAA.

"Serbia has still to meet its international obligations to fully cooperate with ICTY, before an SAA can be signed", says the document. This of course is a reference to the indicted major war criminals still at large and presumed to be shielded by institutions of the state.

There is a need for further strengthening of democracy and the rule of law in Serbia, says the report, and comments, "the work of parliament has been hindered by the political situation".

Civilian oversight of the military is a key European Partnership priority and the emphasis in this area needs to be ensuring the effectiveness of parliamentary control and financial oversight. This 'oversight of the military' again is an oblique reference to the war criminals on the loose and believed to be under the protection of elements of the military and security services 

Another key partnership priority, judicial reform is viewed as lagging behind. "At present the constitution and constitutional law leave room for political influence over judicial appointments", the document notes.

Although Serbia has adopted an action plan to implement the national strategy against corruption, the Commission's assessment is that graft remains widespread and constitutes a serious problem. "An anti-corruption agency needs to be established and the anti-corruption plans have still to be fully implemented".

Money laundering is another serious problem in Serbia, (even back in the time of Milosevic, over 400 Yugoslav companies were registered in Cyprus, which at that time had acquired a reputation as the money laundering centre of choice for the slav world). 

The Commission considers that implementation of the new legislative framework has been slow. Further legislation and a strategy to prevent money laundering and the financing of terrorism have still to be adopted. 

While some progress has been made in the fight against organized crime, the report emphasizes that this continues to pose a serious problem in Serbia and more concrete efforts are needed.

Advances are noted in combating the trafficking in human beings through improved regional cooperation and the adoption of a national strategy. However, "Serbia has been recognized as a source, transit, and destination country".

The overall condition of human rights and the protection of minorities have improved, and the Commission considers that Serbia is relatively well advanced in meeting its obligations.

Improvements have been noted in minority representation in public services and in the use of minority languages. "The inter-ethnic situation in Vojvodina has continued to improve. The situation in South Serbia has remained stable but tense. However, tensions persist within the ethnic Albanian community and their relations with the Serbian population", the document says.

On minorities the report adds that the situation in the Sandzak has worsened, and there has been a deepening of religious divisions within the Muslim community, including even outbreaks of violence.

Serbia is praised for playing a positive role in improving regional cooperation across South Eastern Europe. However Belgrade is criticized for its approach towards Kosovo, described in the report as not constructive.

The report notes that Serbia has rejected the proposal of Marti Ahtisaari while maintaining that Kosovo should remain an integral part of its territory. "Serbia has continued to discourage Kosovo Serbs from participating in the provisional institutions and self government elections in Kosovo", the report says, and remarks that Serbia has already called for a boycott of the forthcoming parliamentary and municipal elections in the province.

The document notes that the Serbian economy has continued to grow strongly but progress in macroeconomic stabilization has been mixed. As regards economic criteria, Serbia has made some progress towards establishing a functioning market economy.

"The new government places emphasis in its programme on European integration, but the results have been mixed", the Commission notes. The professional manner in which the negotiations on an SAA have been conducted is highlighted in the document.

The process of these talks has shown that Serbia has the administrative capacity to progress towards the EU. "Serbia will be well placed to implement a future SAA if this capacity is properly utilized", the report concludes.

                                             ******
The following is a summary of the EU's collateral report on Kosovo:-

Despite the delays determining its long-term status, UN-administered Kosovo has managed to maintain overall stability regarding democracy and the rule of law.

"The status issue has continued to dominate Kosovo's politics", noted the report - the third in a row to be published separately from the chapter on Serbia.

The main political challenges for Kosovo remain the strengthening of the rule of law, anti-corruption policy, the fight against organized crime and enhancing the dialogue between communities.

The assembly's work has shown improvement during the past year, but the Commission considers that the "assembly's law-making and administrative capacities need further strengthening".

The efficiency of the public administration has shown some improvement, but in the assessment of the report's authors, Kosovo's central and local administration remains weak and inefficient.

"Civil servants are still vulnerable to political influence", the report says.

The judicial system in Kosovo has also serious inadequacies, according to the document. "It is weak and vulnerable, while operating in a complex legal environment in which there is considerable uncertainty".

As elsewhere in the region, corruption in Kosovo is widespread and constitutes a serious problem.

Justice, freedom and security are fields where Kosovo has made uneven progress in bringing Kosovo's legislation and practices closer to European standards.

Responsibilities in the field of combating money laundering have been only partially transferred from the UN administration to Kosovo's provisional institutions.

"Uneven progress can be reported in combating money laundering. Investigations in a number of cases were concluded but no court sentences have been yet handed down", report says. It also notes the lack of specialized prosecutors to deal with money laundering, and says that economic crimes remain a major challenge.

"Kosovo is one of the main traffic routes for drugs to Western Europe", according to the Commission. However, the report notes also that there is no strategy to prevent or combat illegal transport and the use of drugs. "Drug trafficking remains a serious problem."

The report recalls that the number of cases of organized crime investigated increased substantially in the first half of 2007.

"Kosovo is still a destination and transit area for victims of trafficking of human beings. No special legislation on trafficking in human being exists", the document says.

Concerning its international obligations, Kosovo has made some progress in co-operation with ICTY in The Hague, but the intimidation of witnesses remains a particularly difficult problem.

In the Commission's assessment little advance has been made in area of human rights and the protection of minorities. "Religious freedom is not fully respected, attacks on religious sites have persisted, and investigations are not always conclusive", the report notes, and adds that "the legal system is not yet fully functional".

Very little progress has been made in relation to returnees, refugees and internally displaced people. "The rights of minorities in Kosovo are guaranteed by law, but restricted in practice because of security concerns", the report says.

The economy has also been influenced by Kosovo's unresolved status. As the report notes, "economic development continues to be seriously impeded by political uncertainties, insufficient rule of law, limited production capacity and weak infrastructure". The report concludes that Kosovo "has made little progress towards establishing a functioning market economy."

Serbian Government Adopts 2008 Draft Budget
12 11 2007 Belgrade - The Serbian government approved Monday the 2008 draft budget with deficit, sparking worries over country's economic improvement.
The draft envisions a deficit of 0.5 percent of gross domestic product, with revenues of 639.6 billion dinars (8.3 billion euros) and spending at 654.4 billion dinars. 

"This budget is not entirely in line with the economy, it has a social element," Finance Minister Mirko Cvetkovic told reporters after the cabinet's session. 

The government will now forward the proposal to the 250-seat parliament for adoption, where the ruling coalition of the Prime Minister Vojislav Kostunica has a comfortable majority to adopt it. 

"The Cabinet voted unanimously," Cvetkovic said. 

The adoption of the budget proposal comes as a contrast to IMF and central bank Governor Radovan Jelasic's warnings that the government should produce a 2008 budget with a surplus and to reduce spending to boost economy.

Miroslav Prokopijevic of the Belgrade's Institute for European Studies told B92 radio that said the draft budget is a result of ``government plagued by bickering and under pressure'' by the Serbian Radical Party, the single strongest opposition party that controls 81 seats in the parliament.

According to Belgrade's Center For Free Elections and Democracy or CESID opinion poll, in September the Radicals enjoyed the backing of 33 percent of voters.

"No government would be courageous under such circumstances.,'' Prokopijevic said. He described the budget as a "Christmas gift" to voters ahead of presidential and local balloting tentatively scheduled for early 2008. 

Cvetkovic also said Serbia should end 2007 with a 6.5 total inflation, foreign debt of 55.5 percent of GDP and a current- account gap amounting to 14.7 percent of GDP.

In June, following months of talks over the coalition agreement, after January's elections, the Serbian government adopted a 2007 budget with a deficit of 0.5 percent of GDP. 

Guerrillas of the Albanian National Army, ANA, said they will not interfere in the November 17 elections in Kosovo, and that they are not in principle opposed to the elections.
In an exclusive interview with Balkan Insight, conducted near Kosovo's capital Pristina, an ANA member, known as Astriti, said: "our group is a military formation and as such will not deal with political processes."

He added that the ANA is "not against democratic processes," but is "here to act in case these processes fail."

This statement contradicts a press release issued on 29 October and signed by Tirana-based ANA spokesman Gafurr Adili, calling on Kosovars to boycott this week's municipal and parliamentary elections.

The statement noted that ANA members have been instructed "to agitate for the population to boycott the November 17 elections."

Tensions in Kosovo are rising as the negotiating process over its future status comes to an end. 

Weeks ago, film footage broadcast on Kosovo's public TV station, RTK, showed masked ANA members patrolling one of the busiest highways in Kosovo. 

Astriti, who appeared in that footage holding a sophisticated sniper rifle, told Balkan Insight that "the ANA doesn't inhibit [political] processes, whether they succeed or not".

He insisted that the ANA has "never dealt with issues such as whether people should go out and vote or not."

Commenting on the statement issued by Adili, Astriti said that "he can represent anybody else but the ANA," and he added "every soldier in the field has more of a reputation than Gafurr Adili."

Adili on the other hand confirmed that Astriti is a member of the ANA operating in Kosovo. He praised Astriti's group but noted that they are not supposed to give political statements.

The ANA, also known as the AKSH, has been branded as a terrorist organisation by the UN Mission in Kosovo, UNMIK. According to Adili, the ANA is the military wing of the so-called Front for Albanian National Unification, FBKSH. This, however, is not corroborated by other armed groups in Kosovo that claim no connection with Adili.

Billions of euros injected into Kosovo's budget and a 12-year freeze on its political status, followed by a referendum, form the main planks of a potential settlement for Kosovo under discussion by US diplomats.

A senior source within the State Department has described for Balkan Insight and Kosovo's Express daily, parts of a draft proposal for Kosovo that is currently in preparation.

"The US has two options: to recognise, together with a few other countries, Kosovo's independence and to cause thereby many global and regional problems; or to drop formal independence for some years, relaxing tension in the region and boosting Kosovo's economy", the source said.

Balkan Insight has not been able to verify the contents of the proposal from other sources. 

The new US initiative comes at a time when Kosovo's complex status resolution process has reached an apparent deadlock, and there are no signs of a compromise around the corner.

Kosovo Albanians rely on the US to support their demand for independence, while Serbs depend on Russia to oppose it.

Facing this unenviable situation, State Department officials are considering a possible alternative option, the source said, without stating by whom, or at what level of seniority, the draft document has been commissioned.

"A freeze on Kosovo's political status until 2020 means a period in which to boost Kosovo's economy…as it is also foreseen that the EU and the US would inject up to €7 billions a year into Kosovo's budget, as a pay-off during this period", the source went on.

"No country would normally be interested in helping Kosovo to such a high level, however this is what we call a 'white peace'…Nobody would win politically; not the Albanians, the Serbs, Russia or the West", the source said.

Kosovo has been administered by the UN since 1999, when NATO's campaign of air strikes forced the Serbian authorities to withdraw from the territory, although formally it remains part of Serbia.

The first phase of negotiations on Kosovo's status between Pristina and Belgrade during 2006 failed to produce agreement. As a result, the UN tasked former Finnish President Martti Ahtisaari, who had been chairing the talks, to draft his own proposals.

Ahtisaari's plan, which recommended internationally-supervised independence for Kosovo, did not receive the endorsement of the UN Security Council, due to objections from Russia. As a result, the international community initiated a new phase of an additional 120 days of negotiations, which are at present showing no signs of delivering a breakthrough.

Last week the "Troika" of mediators from the EU, Russia and the US, which has been overseeing the current phase of talks, presented the two sides with a list of 14 principles as a basis for resolving Kosovo's status. Read the principles at: http://www.birn.eu.com/en/108/15/5350/

Wolfgang Ischinger, the EU representative on the Troika, said last week that both parties should give up their initial stances.

"The two sides have to realise they cannot get 100 per cent of their demands. They have to realise that if they settle for just 50 per cent, it is a much more desirable outcome for both than no agreement at all," Ischinger was quoted in the British The Financial Times daily on Friday.

The State Department proposal currently being drafted does not oppose the Troika principles or Ischinger's statements.

According to the source that revealed the draft document, Kosovo's status over the next 12 years would be similar in some ways to that of Hong Kong which enjoys extensive self-government under Chinese sovereignty, though, unlike Kosovo, it is not under international administration.

The draft envisages the holding of a referendum to determine Kosovo's long-term status on January 5, 2020.

The source also said that Kosovo would become a Free Trade Zone, offering a light taxation and custom regime that would attract foreign investment. In the meantime, Kosovo would be allowed to join the International Monetary Fund and other international financial institutions.

The source added that the initial idea behind this proposal had already been communicated to the Kosovo Albanians' negotiating team.

However, Veton Surroi, a member of the Kosovo team, and leader of the ORA party, said that he was not aware of such a document.

"Based on the contacts that we have with American diplomacy, I can say that this proposal doesn't, as such, exist", Surroi said on his return from Vienna on Sunday.

Asked whether the Kosovo negotiating team would agree to a 12-year freeze, Surroi said only that "Kosovo's assembly should set the independence date before Christmas".

Meanwhile, many in Kosovo believe that the proposal currently being considered would multiply problems and cause confusion.

Lulzim Peci, head of the Kosovar Institute for Policy and Research Development, KIPRED, believes that "the public will be divided once this proposal is formally introduced".

"Besides that, none of Kosovo's politicians are mandated to choose between accepting such a proposal and declaring independence unilaterally", said Peci, and added that "a decision of that kind should be made through a referendum".

Shpend Ahmeti, an economist with Kosovo's Group for Policy Analysis, GAP, said that the amount of money mentioned in the draft document seemed enormous.

"It is hard to believe that this plan can talk about this amount of money. In a planned donors' conference for Kosovo, the total amount that we expected to be raised reached only €2 billion, and that was for a period of three years", Ahmeti told Balkan Insight.

Peci believes that if funds on this scale were invested into Kosovo's economy over the next 12 years, they would help Kosovo reach a level similar to that of the more developed EU countries in the region, such as Slovenia.

"Other countries would, by contrast, suffer from such a boost to Kosovo's economy, considering that even countries, like Bulgaria and Romania, that recently joined the EU, are not receiving that much support from the [EU budget's] cohesion funds", he said.

Ahmeti is also worried. "We should bear in mind that Kosovo lacks a clear vision for pursuing a fast rate of economic development", he says.

Yet the possible distortion that such a huge provision of funds may cause to the economy of Kosovo and the region is only one of the problems the draft proposal may encounter - if it ever becomes US policy. Of more immediate interest are the likely reactions of the opposing sides, especially the Kosovo Albanians who believe Washington has already promised them independence now, and not in 12 years' time.

                                              *********
Baton Haxhiu is director of Kosovo`s Express daily and this comment was published in the Express, on October 29. Balkan Insight is BIRN`s online publication

This title, January 5, 2020, does not belong to a work of science fiction or a novel published recently.

It is grounded in an idea, the date of which shows the finale to resolving Kosovo's status, which was published on October 29 as a proposal in Express. That is a detailed American idea, and all the international and regional partners might agree to it. Read more US Ponders Freezing Kosovo's Status until 2020. 

This proposal has not been officially acknowledged as yet. Based on many political parameters surrounding us, it would not be good to refuse the idea a priori. So, our stance should neither be against nor in favour before we have analysed our position as well as the position of our international partners, in particular that of the US, which is our strategic partner.

January 5, 2020 seems to be far away, but when evaluating the years that have passed, this date has many elements that should be carefully assessed.

Let us explain the last 20 years. On March 28, 1989 Kosovo was occupied by Serbia. Ten years later, on June 12, 1999, Kosovo was liberated. During that 10-year period there were hopes that Kosovo might become independent, and that the US would declare it. But that did not happen. The US then brought us freedom - together with its European allies, Great Britain in particular.

Since June 12, 1999 Kosovo has been free, but has not had legal sovereignty over all its territory.

Now it is 2007. The negotiations are foreseen to end on December 10. There is a statement by the Troika, that there will be no agreement, unless there is a 50% compromise; there is another statement by the Kosovo delegation that there is no alternative to an independent Kosovo; and finally, there is a statement by Russia and Serbia that the UN Security Council will not endorse a document which would recognize Kosovo's independence.

And besides these political dilemmas and strategies, there is an opportunity to be free of the fear of crisis in the future. I will mention two questions that need to be answered. First, are we able to protect our territorial integrity and political stability after we declare independence? And second, can there be economic development in Kosovo, if there is a political crisis? If we are not able to answer these questions then we should be very careful about issuing any rejection before we have analysed things properly.

On the other hand, the American idea - which for the time being is not the only one - offers two things: buying independence until 2020 and a referendum. In addition, Kosovo will get billions of euros every year.

If for the past 10 years we have won freedom but not independence, then 10 more years of negotiations and of building institutions under a protectorate, 10 more years of a frozen independence process should be accepted under one condition: will we really be economically and politically independent by 2020?

The question is: what would we get until 2020 if we declare independence now? We might lose Kosovo north; international recognition of independence could take years; we would be isolated; there would be no economic development; there would be total insecurity and inter-ethnic conflict; no possibilities for EU integration.

On the other hand, if there are guarantees that we will have a referendum on January 5, 2020 and that every year Kosovo will receive funds for its development, and that we will be ready to join the EU as a developed country, then there is no reason why such an idea should not be considered. That should certainly the case, if all these are guaranteed in a document signed by the US, EU, Russia, China, Great Britain, Kosovo and Serbia, as well as the countries of the region - Macedonia, Montenegro and Albania.

If somebody thinks that we can now initiate the independence process and, in case we fail, we can join Albania, then this idea should be considered with less optimism. Albania is not ready to cause political instability and to lose the privileges it has been granted. In the next 10 years many things would be clarified - in particular after the construction of the Durres-Kosovo highway.

This idea should be considered very carefully before giving a positive or a negative answer. We can declare independence whenever we want, if an eventual agreement is not respected. But can we survive without others' help? In short, what should be the next step? We should not forget that in the next 12 years we would have economic development on our side.

                                                *********
The countries of the Western Balkans have a real prospect in Europe, but due to slow pace of reforms EU membership is a long way away, an EU Commission report says. "They still haven't fulfilled the necessary conditions," the report says.

Bottom of the list, because of its unresolved status, is Kosovo. The status issue has hindered all aspects of development and is characterised in the report as being "not sustainable". The report recommends that the Commission devote special attention to Kosovo.

Macedonia is a candidate country but has no set date for the beginning of accession talks. Albania and Montenegro have signed Stabilization Association Agreements with the EU, and Bosnia and Herzegovina and Serbia have not yet reached this stage, due to international obligations that have yet to be fulfilled. 

"Kosovo's status needs to be settled to permit political and economic development," the report says. 

"The functioning of Bosnia and Herzegovina state institutions continues to be compromised by ethnic divisions. Democratic forces in Serbia are fragile. Frequent tensions in Macedonia and insufficient cooperation between political actors has affected the normal functioning of institutions and slowed down reforms. The highly confrontational political climate in Albania and the lengthy process of adoption of a constitution in Montenegro point to other challenges in building modern democracies. Croatia needs to make further efforts to promote tolerance towards minorities."

The report argues that the EU's policy of conditionality has been a successful spur to countries to maintain the pace of reforms, and because of this it stresses that the prospect of membership, combined with continuing conditionality, must be held out in a clear and concrete way. 

"The prospect of membership has never been more important than today to help the countries overcome crises, state weakness and challenges to democracy," the report says.

The report notes that cooperation among the countries of the Western Balkans and between these countries and their counterparts in the EU is essential in order to tackle the problem of corruption and organized crime, which affects all the countries of the Western Balkans (see progress report). The report says that "high profile cases" of crime and corruption should be singled out for special attention.

The report also touches on the current popular attitudes towards enlargement. 

Following the accession of ten new member countries in 2004 there has been heated debate in pre-2004 members states about whether enlargement has been beneficial; this has been accompanied by the emergence of "enlargement fatigue". 

The report notes that there is significant public concern about enlargement and calls on member states to do more to inform their citizens about the benefits and challenges of the enlargement process. 

But it insists that enlargement has been a success. Enlargement is "one of the EU's most powerful tools," the report says. "It serves EU strategic interests in regard to stability, security and conflict prevention."

In order to inform the public in member states and in states that aspire to membership the report recommends that governments develop strategies to communicate the benefits of enlargement more effectively. 

"The Commission will complement these efforts by communicating the EU's enlargement policy, including pre-accession support," the report says. "It will tackle myths by providing facts."

By Gjeraqina Tuhina in Brussels
On Tuesday the European Commission will publish a report on its Enlargement Strategy, a copy of which has been obtained by Balkan Insight, in which it will cite the slow pace of reforms in the Western Balkans as a cause of delay in integrating the countries of the region in the EU.

The report notes that some progress has been made in bringing the countries of the Western Balkans closer to Europe, but stresses the need to maintain conditionality, keep the concrete prospect of eventual membership to the fore, and explain the benefits and challenges of enlargement more effectively. 

"Given the present state of preparations in these countries, their accession is likely to occur in the medium to long term," the report says.

The report covers all of the countries of the Western Balkans, including Kosovo, as well as Turkey.

The Commission's evaluation notes that countries have been moving towards the EU at different speeds. Read more about progress reports http://www.birn.eu.com/en/110/10/5486/

In terms of the accession process, Croatia is considered to have performed best - although it faces continuing problems in regard to some reforms - and is likely to be the first of the current aspirant countries in the region to gain EU membership. 

"Croatia's progress towards membership sends a strong signal to other Western Balkans countries on their own membership prospects, once they fulfil the 

Prime Minister Vojislav Kostunica stressed Belgrade's opposition to independence for Kosovo, ahead of proposals from the trio of nations supervising talks on the province's future. 

Addressing a joint news conference here with his Hungarian counterpart, Ferenc Gyurcsany, Kostunica said Belgrade was willing to grant Kosovo an exceptionally high degree of autonomy and accused leaders of the ethnic Albanian-majority province of refusing to compromise. 

'Serbia would appeal any kind of decision that would grant Kosovo independence... but we are ready to give the utmost rights to the Kosovar minority,' Kostunica said. 

Belgrade is willing to grant Pristina 'total independence and autonomy within Serbia,' he said, adding the leaders in Kosovo were 'practically doing nothing' to reach a compromise.

'They are only sticking to independence,' Kostunica said. The international troika on Kosovo -- the European Union, Russia and the US -- will make concrete proposals next week on the province's future status. 

Cristina Gallach, spokeswoman for EU foreign policy chief Javier Solana, said the troika will move from a role 'where it played intermediary' to a 'more proactive attitude' with Serbian and Kosovo negotiators. 

The three are expected 'to put ideas on the table' at the next round of Kosovo talks in Brussels on Nov 20, once the results of the province's elections this Saturday are known, Gallach said on Monday. 

Technically still a province of Serbia, Kosovo has been under UN administration since the end of the 1998-1999 conflict, when NATO bombing ended the Belgrade-backed forces' crackdown against ethnic Albanian separatists.

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