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Balkans: Donors Meet To Fund Stability Pact

International donors meet today in Brussels to discuss funding for Balkan Stability Pact projects. This is the first step in actually implementing the pact. RFE/RL correspondent Alexandra Poolos reports that projects will focus on bringing the Balkans closer together -- and closer to the EU.

Prague, 29 March 2000 (RFE/RL) -- International donors are in Brussels pledging economic aid to the Balkans that, they hope, will cement regional cooperation and help make the Kosovo conflict the last of its kind.

Donor governments from the European Union, the Group of Seven countries and Russia, plus international financial institutions like the World Bank are expected to offer more than $1 billion for projects stretching from Montenegro to Romania.

This funding conference (organized by the World Bank and European Commission) is the first to be held in support of the Balkan Stability Pact, which was set up in the aftermath of NATO's air war on Yugoslavia. It is a chance for abstract pledges of assistance to be turned into real projects, which can make a difference in the lives of people in the region.

Andrew Levi, the spokesman for Stability Pact coordinator Bodo Hombach, says the meeting will counter criticism that the pact isn't moving fast enough.

"This is a new step in the implementation of the pact because here, for the first time under the specific provisions of the stability pact, we're bringing together substantial sums of aid for the countries in the region which will be applied quickly and unbureaucratically over the next 12 months. And which will have at their heart the link between reform and help for self-help."

A preparatory report by the World Bank says that declining living standards, refugees, border disputes and security concerns have created instability in the Balkans. The report says that successful reform will only be possible if the countries covered by the Stability Pact -- Albania, Bulgaria, Bosnia-Herzegovina, Croatia, Macedonia, and Romania -- make a stronger commitment to reform their economies and strengthen democratic institutions.

The conference will specifically discuss funding for 140 quick-start projects that can be begun within a year, but need funding to get off the ground. The projects are developed by the countries themselves.

Hombach's spokesman Levi says the projects are of two types: economic reform projects that foster conditions for foreign investment, such as developing legal norms to protect foreign companies, and regional infrastructure projects that promote private sector development.

A substantial proportion of the donor funds will be distributed in the form of loans and grants. Levi says that although many projects will have a country-specific focus, all are designed to integrate the region as a whole. One particular project already slated to receive funding is a bridge over the Danube, which will link Romania and Bulgaria. Levi says the bridge will improve regional economics by creating a transportation link from Berlin through Istanbul.

Increasing regional cooperation is the main focus of the conference, but moving the region closer to the EU also factors heavily. Catherine Day, of the European Commission's external relations department, says the funding projects are based on the foundation of integration into Euro-Atlantic structures.

"For the European Commission, all the projects that we will be discussing have their own value, but have also a strategic value in terms of bringing the region closer to the European Union. You will all have seen the conclusions of the Lisbon European Council, which talk about the fullest possible integration into the mainstream of European structures. So the projects that we will be talking about and the approaches that we will be talking about go in this strategic direction as well being intrinsically useful in themselves."

Officials said this conference is being asked to find only a fraction of the total cost of implementing the stability pact projects. Some of the money was already pledged at a separate donors conference on Kosovo held last year.

World Bank President James Wolfensohn said Wednesday that the donors aim to assemble $1.72 billion for the quick-start program. EU officials said EU support for the quick-start projects will be $505 million (530 million euros). The total EU contribution will be more than $11 billion over six years, half of which is earmarked for Bulgaria and Romania.

Clearly, some countries in the region won't be benefiting from the substantial sums of money in Brussels. Although Serbian citizens may see some aid tossed their way to fuel projects in opposition controlled towns, the country as a whole will remain on the outskirts of the Stability Pact club until Yugoslav President Slobodan Milosevic is ousted from power.

Conversely, Montenegro, which is still a part of federal Yugoslavia, will see some rewards for its pro-Western bent. Levi says significant funding has been earmarked for Montenegrin projects to support the country's democratic leanings.

"Montenegro, which is of course part of the federal republic of Yugoslavia, is specifically mentioned in the Stability Pact as being an early beneficiary of the Pact. And what we're trying to do there is ensure the maximum targeted aid gets to the places it needs to in Montenegro to help them in their very difficult situation and to help the government which is taking a moderate and pro-European course, which we should all acknowledge I think."

The first day of the meeting will be held at the ministerial level and will focus on the framework for regional development and integration. The second day of talks will be a technical meeting held at the senior official level and will focus on the specifics of regional infrastructure projects.