The EU after the constitution: A new financial perspective

ESI Senior Analyst Verena Knaus was invited to attend a conference in Ljubljana organised by the Institute for Strategic Studies. Ms Knaus gave a presentation on new perspectives for the European Union after the constitutional referenda in France and the Netherlands.

The EU is facing several serious challenges during the course of the next decade, among these the next enlargement round with Croatia, Macedonia and Turkey, the unresolved sovereignty issues involving Serbia and Montenegro and Kosovo, Albania's chronically weak state and the underdevelopment trap in several countries of the Western Balkans.

In this context the current regulation on 'Instruments for Pre-Accession Assistance' (IPA) in the next EU budget from 2007 to 2014 introduces a sharp division between Candidate countries (Turkey, Croatia, Macedonia) and Potential candidate countries (Albania, Serbia, Montenegro, Kosovo, Bosnia Herzegovina).

Ms Knaus elaborated on the argument that the potential candidates in the Western Balkans should be given the chance to progress towards EU membership on an equal footing with previous candidates. She stressed that a credible strategy for integrating the region into the EU, and preventing the emergence of a Balkan ghetto, is critical not just for the region, but also for the EU itself.

The consequences if such a change is not implemented might be severe. It could send out the message that the EU takes no serious interest in either rural, agricultural or infrastructure development. As aid declines political tensions might rise (Serbia, Montenegro, Kosovo), strong migratory pressures will remain and the development crisis in the 'Balkan ghetto' will deepen in coming years.

The coming year should see candidate status for Macedonia (by early 2006), the completion of Stabilisation and Association Agreements with Bosnia, Serbia and Montenegro, and Albania by end of 2006 (equivalent agreement with Kosovo) as well as a change to IPA and the availability of pre-accession instruments for ALL countries in the Western Balkans.