Commission adopts multi-annual planning of
financial assistance to the Western Balkans and Turkey

The Commission has completed today the strategic
planning of EU financial support for 2008-2010 to the candidate countries and
potential candidates: Croatia, Turkey, the Former Yugoslav Republic of
Macedonia, Albania, Bosnia and Herzegovina, Montenegro, Serbia, and
Kosovo^[1].
This financial assistance aims to enhance political and economic reform and
development to realise their European perspective. For 2008-2010, the overall
indicative amount of EU financial assistance under the Instrument for
Pre-Accession Assistance (IPA) is €4.471 billion.

- The main tasks of Kosovo's new embassy in Brussels will be to lobby the EU for wider recognition of the country's independence and to raise awareness of Serbia's attempts to sabotage the young state, Kosovo envoy Ilir Dugolli told EUobserver.

"Negotiating the question for more recognition of Kosovo is the absolute priority. In the case of the EU, all the other steps go through this step. You cannot really make much progress in negotiating with the EU unless this hurdle is overcome," Mr Dugolli said. "That for some time will continue to exhaust a considerable part of our energies."

The Balkan country proclaimed independence from Serbia in February and has been recognised by 21 out of 27 EU members, with Cyprus, Greece, Romania, Portugal, Spain and Slovakia holding out for now.

The partial recognition means that Kosovo cannot establish formal legal relations with the EU or launch a feasibility study for a future Stabilisation and Association Agreement.

Serbia vowed Wednesday to press on and implement a European Union trade deal despite anger at a Dutch veto that came even though Belgrade arrested top war crimes suspect Radovan Karadzic.

Bozidar Djelic, Serbia's deputy prime minister for EU integration, said in an interview with a local newspaper that he was "infuriated" by the Netherlands' refusal to unfreeze the EU trade and aid pact.

EU foreign ministers on Monday failed to convince their Dutch counterpart, Maxime Verhagen, to drop his country's objections to unfreezing the accord despite Belgrade's improved track record on war crimes.

UN chief war crimes prosecutor Serge Brammertz had told the EU ministers there was "very clear progress" in Serbia's cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY).

EU foreign ministers meeting in Brussels on Monday (15 September) failed to unfreeze the trade related part of a pre-accession deal with Serbia, following the Netherlands' opposition.

"There is a very, very big majority saying that we [EU] should unfreeze [the agreement]. But there is no unanimity," French foreign minister Bernard Kouchner, whose country currently holds the rotating EU presidency, told journalists after the meeting.

Mr Lajcak said the security situation in Bosnia and Herzegovina was currently stable, but stressed that the country is still facing numerous political challenges, the solving of which requires the EU to play a role.

One strategic issue, he underlined, is constitutional reform in Bosnia. There is currently no united approach to such reform, not only domestically, but also within the international community.

"The international community and the EU in particular needs to define what it expects from any agreement" on constitutional reform in Bosnia, he said.

Kosovo, which seceded from Serbia in February of this year, is one of Europe's most under-developed economies and is highly dependent on foreign subsidies.

From 1999 to 2007, when under the direct administration of the United Nations, Pristina benefitted from over €3.5 billion in reconstruction assistance.

However, the official unemployment rate remains a worrying 43 percent, with youth unemployment estimated even higher, at around 60 percent.

Kosovo's economy grew by 4.4 percent in 2007, with an inflation rate of 13.6 percent as of April, 2008.

The largest chunk of money for Kosovo is to come from the European Commission, followed by an American contribution of some $400 million. Beyond the EU's own funds, member state Germany has pledged €100 million, and the UK has confirmed an aid package worth £23 million.

Serbia's parliament on Monday (7 July) approved the country's new government which will be led by prime minister Mirko Cvetkovic and favouring prompt EU membership– but which remains opposed to Kosovo's independence.

The government coalition will be made up of a pro-EU alliance – led by current president Boris Tadic's Democrats (DS) – who won the elections in May, but did not get a big enough majority to form a government on its own, and the reformed Socialists (SPS) of late president Slobodan Milosevic

However, the new premier also stressed his country was nowhere close to accepting Kosovo's independence.

"I pledge allegiance to the Republic of Serbia and promise with my honour that I will respect the Constitution... and to be committed to the preservation of Kosovo and Metohija within the Republic of Serbia," the premier and his ministers vowed after being sworn in.

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My own hunch is that they will try to find a way to enforce the Lisbon treaty without the non-ratifiers. As a first step, they will try to offer the No-sayers a quit-and-rejoin deal. It would be the least divisive option of all, but unfortunately, it may also be one of the least realistic. It would obviously require their consent, which is far from assured. In Ireland’s case it may require a referendum to get out and another one to get back in.

If this is not possible, there are several other options involving varying degrees of involuntary separation. For example, everybody would formally remain inside the EU on the basis of the Nice treaty, but the ratifiers would organise their areas of co-operation outside the EU and its institutions – on foreign policy, immigration, economic governance, maybe even on energy and the environment. They could do so using the provisions of Lisbon treaty or any other rules they choose among themselves.

It also comes in the aftermath of Ireland's rejection of the Lisbon treaty in a referendum 10 days ago, which has prompted divisions among EU leaders about the possibilities of continuing with the enlargement process at this stage.

France's president, Nicolas Sarkozy, and Germany's chancellor, Angela Merkel, have both declared that EU expansion will have to be halted until the document enters into force, while leaders in other countries – such as Poland – have said the process can continue.