Wednesday, June 20, 2012


Yesterday, EUObserver had an excellent - although perhaps somewhat optimistic - opinion article about the idea of creating a Benelux for the West-Balkans, or specifically for Albania, Macedonia, Kosovo and Montenegro. Before I focus on the little detail that particularly captivated me, I'd first like to briefly discuss the main idea.

In the words of the authors:
Albania, Kosovo, Macedonia and Montenegro should join forces to build a new and permanent co-operation structure aimed at boosting their political and economic relations, with a final common goal of accelerating EU membership.
To start with my main concern: As the Economist's Eastern Approaches explained only yesterday,
[People in the Balkan] are concerned about jobs, health care, the education of their children and pensions. These material worries preoccupy them much more than ethnic grudges or the desire to reconquer territory they believe their nation has lost to a neighbour.
That said, I foresee significant issues if Albania were to create such a union with Kosovo (90% ethnic Albanians), Macedonia (25%) and Montenegro (5%). The authors recognise that
It is important to convince the international audience that this is not some kind of greater Albania through the back door,
but offer no explanation as to how this should be done, or how the domestic audiences of the four participating countries should be convinced. Serbia and the Serb minority in Kosovo would go ballistic, and the Macedonians haven't forgotten about their country's brief civil war in 2001 either. Only Montenegro would seem to be confident enough about the place of their Albanian minority in overall society to consider joining AlMacKoM.

However, assuming this problem can be overcome, such a union would seem to me to be an excellent idea. It gives these countries a useful exercise in compromising and institution building at a small scale, allowing them to develop the skills they need to operate more effectively on the European and World stages. At the same time, great economic advantages are not to be expected, given how unimportant these countries are for each other's trade. Courtesy of the CIA World Factbook:
  • Albanian Exports: Italy 50.8%, Kosovo 6.2%, Turkey 5.9%, Greece 5.4%, China 5.5%
  • Albanian Imports: Italy 28%, Greece 13%, China 6.3%, Turkey 5.6%, Germany 5.6%
  • Macedonia Exports: Germany 20.2%, Italy 7.1%, Bulgaria 7.1%, Greece 6.4%
  • Macedonia Imports: Germany 11.5%, Russia 11.1%, Greece 8.3%, Bulgaria 8.2%, UK 7%, Turkey 5.1%, Italy 5.1%
  • Kosovo: No information available, but undoubtedly a major part of its trade is with Albania
  • Montenegro Exports: Serbia 17.5%, Hungary 16.9%, Croatia 10.1%
  • Montenegro Imports: Serbia 28.4%, Greece 7.9%, Bosnia and Herzegovina 7.6%

And that is before we even start talking about the low ratio of trade to GDP in many of these countries. In such a setting, the economies of these four countries have little to gain from integration, suggesting that the main advantage of creating an AlMacKoM are political and institutional.

So far so good. But where the article goes completely off the rails is here:
The sad truth is that EU accession might take a long time. Croatia achieved full territorial sovereignty in 1995 and is to join the EU in 2013. If we consider that Kosovo is today where Croatia was in 1995, we might envisage EU accession in 2030. That is too long.
I think we can all agree that this is completely insane. The likelihood of any of these four countries joining the EU by 2030 is extremely remote. That is true even for Macedonia and Montenegro, who already have candidate status. For once, this is not a problem of the EU's legendary "absorption capacity", but rather a question of the institutional capabilities of these countries. As such, admitting four more countries with a combined population of about that of Bulgaria wouldn't challenge the EU overly much, as long as these countries were well governed, with strong democracy, rule of law, etc. Given that, especially in Kosovo and Albania, these things are utterly and totally missing, the probability of Kosovo joining in the next two decades is exactly zero. In no sense of the word is Kosovo today "where Croatia was in 1995". Croatia in 1995 had a functioning system of government, whereas Kosovo has a government that is only saved from utter bankruptcy by the fact that it is unable to actually spend all the money it has budgeted. Quoting the CIA:
Until 2011, Kosovo maintained a budget surplus as a result of efficient value added tax (VAT) collection at the borders and inefficient budget execution
This is why the authors are ultimately correct. Such a regional union would bring much needed institution-building. However, using EU-accession as an argument is probably unwise. Accession is still so far off that a failure to achieve noticeable advances in that direction will only create resentment. Instead, AlMacKoM should be sold on its own merits, as a way of wrestling control away from the political and criminal clans that currently run these countries, as a way of improving relations between four countries that have much in common, and, yes, also as a way of improving their economies.

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