Interview on the Situation in the Balkans on Europe Today

Transcript of BBC World Service Radio Interview

19 July 2001

The day after Slobodan Milosevic was extradited to The Hague last month, Belgrade’s cooperation seemed all worthwhile. That’s when the international donor conference in Brussels agreed $1.3bn in aid for the Yugoslav federation. But now it seems generosity is not as straightforward as Belgrade would like. Serbia’s prime minister, Zoran Djindjic, this week called Western aid a farce, saying delays threatened the whole reform process in Yugoslavia. He said the EU had promised a quick payment of €300m for August but that three-quarters of that money had to be used to pay back debts and the rest wouldn’t arrive until November. And Mr Djindjic is not alone in his criticism. Bodo Hombach Is coordinator of the International Balkan Stability Pact.

[Through a translator.] Mr Djindjic knows that old debts have to be paid off and that we can’t break that rule for anybody, but what he and I can’t understand is why the first tranche of money that’s coming to Serbia in August can’t [sic] be used only to pay off the debts. Why can’t he have just part of that money to put towards economic and social regeneration in Serbia. The fact that no one I giving Serbia any usable money in August is causing me some real headaches and I hope those responsible can be persuaded to be more flexible.

You spoke earlier of a potential catastrophe, but what consequences do you think it could have if really no money for this important social economic projects that Mr Djindjic is facing is available? What do you think might happen in Belgrade?

The worst outcome would be people losing confidence in the forces of democracy. That would play into the hands of other people who are just waiting for a chance to prove that the rapprochement with Europe isn’t in Serbia’s interests.

Have you got any idea why it takes so long? I mean, you are a leading functionary and you seem to be helpless in the face of EU bureaucracy.

You’re right. I’ve been doing this job for two years and must say that most of it is taken up with fighting slowness and bureaucracy. It’s a battle against red tape, the sort of thing where you clutch your head and say, ‘How can that be right when it causes more problems than it solves?’ I can give you one example that’s close to my heart. We have institutions which can decide within two days which bridges over the Danube we should bomb, but then we need two years to start repairing the damage and make the river navigable again, even though every day the blockage is costing Bulgaria and Romania more than all their international help can provide. The politicians must grasp these terrible contradictions, not just for the sake of south-eastern Europe but for the common European good.

Bodo Hombach, coordinator for the International Balkan Stability Pact. So why does it take such a long time for the EU aid money to filter through? I asked the EU external affairs commissioner, Chris Patten.

Well, the fact of the matter is that in the Balkans we have been making a difference and we have been turning things round and we have been getting things through more quickly, and nobody should know better than that than Mr Hombach, who’s Stability Pact is largely dependent on European funding, with some American and Japanese as well. The truth is that, if you take Serbia as an example, within almost days of the overthrow of Milosevic we were providing €200m of emergency assistance. We have committed ourselves, which I can come back to in a moment, to €300m in macro assistance.

Could we talk about these €300m?

Yes.

Which is exactly what the Serbian prime minister, Mr Djindjic, has been talking about. He said that this money is badly needed if he’s to press through his political reform, if stability is supposed to prevail, and this money now, he says, he’s been told €225m of it will basically be spent on debt repayment, for debts accumulated by the former Yugoslav government, and €75m will not arrive now but in November.

Let’s be absolutely clear about that, taking account of the fact as we do so that we’ve already committed €200m and spent most of it. We’ve already committed €240m and spent a lot of that. So that’s €450 [sic] for starters. There is then the €300m for macro financial assistance. What’s that going in for? It’s going in largely to relieve Yugoslavia of its international debts so it can start borrowing again from the European Investment Bank. Now, the fact that things haven’t worked out quite as we would have intended is because of what? I’ll tell you. We in the Commission put forward a proposal for €300m of assistance and we wanted about €125m of it for it to be in grant and for the rest to be in loan. Europe’s finance ministers decided that the balance of that was wrong and they wanted to reduce the amount we paid in grant. So if you have a criticism, or if Mr Djindjic has a criticism, for anybody it shouldn’t be for the European Commission, it should be for Europe’s finance ministers, though, to be fair, they’ve now said to us, ‘Look, if you think that the situation warrants it in the autumn you can come back and ask for a bigger grant element.’ But that, even that, isn’t really the point, because what Mr Djindjic is actually talking about isn’t help with his balance of payments, isn’t macro financial assistance, it’s budgetary assistance. What Mr Djindjic has in the short term is a problem in his third quarter in actually paying for things like salaries, in paying for things like pensions. The problem starts to get easier in the fourth quarter because he gets lots of revenues from privatisation.

But he’s right, though. I mean, this money, if he hasn’t got money, you know, for the things that you were just talking about, it will be extremely destabilising.

But there is hardly a donor around who will agree. I mean, there are some bilateral donors who will agree to provide assistance to pay of a country’s salaries or to pay for a country’s pensions, but there aren’t many and people aren’t going to allow the European Commission to do that.

The EU external affairs commissioner, Chris Patten.