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Balkan PMs pledge greater cooperation

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Serbian Prime minister Vojislav Kostunica.

Karl-Heinz Grasser, Austria's Minister of finance and Chair of the EBRD Board of Governors.

Four western Balkan Prime Ministers today pledged to further their already strong mutual cooperation in building economic and political stability in their region. Speaking at the opening of the EBRD Board of Governors meeting in Belgrade, Serbia, the Prime Ministers detailed how the ‘pull’ of the long-term prospect of joining the European Union is yielding near-term reforms and integration of immediate benefit to their countries.

“The countries created after the breakdown of former Yugoslavia -- Bosnia and Herzegovina, Croatia, Macedonia, Serbia and Montenegro and Slovenia -- are developing increasingly close cooperation, both political and economic,” said Serbian Prime Minister Vojislav Kostunica.

He and the other Prime Ministers cited as an example of profitable cross-border cooperation the new customs union between the countries of south-eastern Europe. Similarly, the development of a regional energy market and integration of Balkan transport systems are already eliminating bottlenecks to growth.

“Investments are crossing our borders both ways,” commented Dr Kostunica. “What investors have already realized is that our (south-eastern European) economies are largely compatible and very attractive…We believe an age of cooperation and prosperity is in store for south-eastern Europe at large.”

Karl-Heinz Grasser, Austria’s Finance Minister and Chair of the EBRD Board of Governors, lauded EBRD President Jean Lemierre for bringing the Prime Ministers together for dialogue.

“Today’s working lunch of political and business leaders served as a valuable platform for the exchange of views on issues affecting the investment climate,” said Mr Grasser in his address to the Governors. “I would personally like to applaud the Bank for bringing us all together.”

Mr Lemierre noted the EBRD has invested almost EUR6.5 billion “in the banks, enterprises and infrastructure that fuel growth” in south-eastern Europe. “Alongside its investments, the EBRD has devoted much attention to policy dialogue and encouraging countries to work collectively towards their mutual future prosperity. To paraphrase a recent headline, it’s a question of ‘team up or give up’ in this region.”

Bosnia and Herzegovina Prime Minister Adnan Terzic said south-eastern European countries should build adopt a multilateral free trade agreement to further boost cross-border business. Free trade is “an imperative” he said.

Mr Terzic added that organisations such as the EBRD, which has invested EUR350 million in his country, have helped Bosnia-Herzegovina move beyond the post-war reconstruction phase into the more quotidian work of developing a market economy. “This is a favourable example of international intervention in a developing country.”

FYR Macedonia Prime Minister Vlado Buckovski said his country has achieved macro-economic stability but “there are still huge economic problems, two of which are…high unemployment and poverty rates and the constant negative foreign trade balance.” He said the government’s slate of reforms will address the business environment, efficiency of the judiciary, labour market flexibility, banking regulation and supervision, developing a securities market and insurance sector, and reform of the public sector.

Dr Buckovski said the EBRD, which has invested EUR374 million in 26 projects in FYR Macedonia, “accelerates the linkage of regional infrastructure, thus enabling earlier integration with the European Union.” He noted in particular EBRD backing for regionally-important initiatives in railways, an oil pipeline projects from the Black Sea across the Ionian Sea, and regional highway and power line linkages.

Milo Djukanovic, Prime Minister of Montenegro, said the western Balkans region “is shaping up as one of the regions of the modern, united Europe…Given that EU membership is the strategic choice of all the governments in the region, we must all push even stronger for conditions conducive to the free flow of people, capital and information. Until we do this, we will be missing the opportunity to attract a higher level of investment, create more jobs, increase productivity and competitiveness, and thereby improve the living standards of our citizens.”

Mr Kostunica spoke of the situation of Kosovo where, many commentators believe, instability could undermine the peace and growth that has taken hold throughout the rest of the western Balkans. He called for “a solution that makes no one a winner or a loser…based on compromise and the European and international democratic rules which unconditionally protect the territorial integrity and sovereignty of all states.”

Written by EBRD Senior Writer Kate Dunn.

23 May 2005