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Yugoslavia: U.S. Wants Europe To Finance Balkan Reconstruction

There is general agreement that the Balkan nations are going to need a lot of help in the coming years to recover and rebuild. The United States wants Europe to pick up the largest part of the cost. RFE/RL's Economics Correspondent Robert Lyle reports that one senior American official told a Balkans reconstruction conference Friday that Europe still hasn't gotten that message:

Washington, 27 September 1999 (RFE/RL) -- U.S. Deputy Treasury Secretary Stuart Eizenstat told a conference of government and non-government organizations that the U.S. underwrote most of the costs of the military operations designed to thwart aggression and bring peace to the Balkans.

Now, he said, it's time the burden was shifted to Europe, which must assume "the lion's share of the reconstruction and humanitarian effort."

Eizenstat said the U.S. will set the level of its contribution based on what the nations of Europe are willing to do.

The U.S. and 32 other nations and seven international institutions in July pledged a total of over $2 billion in quick humanitarian aid for Kosovo and its immediate neighbors. A follow-up donors meeting, tentatively set for the end of October, will focus on longer-term reconstruction and rehabilitation needs of the entire region.

Friday's conference was co-sponsored by the European Union, the World Bank, and the George C. Marshall Foundation.

The European Commission's Commissioner for External Relations, Christopher Patten, who spoke before Eizenstat, said Europe must match it's "fine rhetoric with hard action on the ground."

The approach must be to deal with the Balkans as a region which is a part of Europe, said Patten, not a quarrelous adjunct to the continent:

Patten said: "For too long, we've adopted a piecemeal approach to the Balkans, wondering where the next crisis would erupt, attempting to apply the sticking plaster (bandage) when it did. I think we all now recognize that those days are over and that we need a regional approach to the problems of the region, and that's what the stability pact is all about."

Patten told the gathering that Europe must help deal with the political situation, but more importantly underwrite economic recovery:

Patten said: "Because without economic growth, there will be no prospect for lasting peace in the Balkans. Nothing feeds ethnic tensions more than grinding poverty."

The World Bank's Vice President for Europe and Central Asia, Johannes Linn, told the conference that the bank has made available more than $200 million in special assistance to the six countries of the region in 1999. Total Bank lending to those countries - Albania, Bosnia, Bulgaria, Croatia, Macedonia and Romania - in 1999 was close to $1 billion and will be about $900 million in the year 2000.

But there is one political issue that must be dealt with sooner rather than later, said Linn, and that is including the Federal Republic of Yugoslavia in the development of the region:

Linn said: "Without the development and integration of the Federal Republic of Yugoslavia into the regional economic and political framework, the rest of Southeast Europe is not likely to develop and integrate, as shown in the experience of the last ten years."

But this won't be easy. The World Bank cannot lend any money to Yugoslavia because it is not a member of the Bank. Eizenstat reiterated U.S. policy that opposes anything other than humanitarian aid to Serbia.

The head of the conference's co-sponsor, the Marshall Foundation, Albert Beveridge, said that unlike what the famous Marshall plan did for Western Europe after World War Two, the world cannot wait for a neat political solution in the Balkans:

Beveridge said: "The political condition of the Balkans is much more difficult than the situation that existed after the second world war and political change is necessary. But we cannot afford to wait for the optimum political climate before beginning the process."

The EU and the World Bank, which have been co-chairing the assistance effort for the Balkans, say they will soon have a figure for the amount of assistance needed over the next five years. That number may be decided at next week's meeting in Washington of the steering committee for multinational effort.