The West has spent significant amounts of money for the reconstruction of the Balkans. Overall assistance to southeastern Europe was significant, ranging between €6-6.5 billion per annum from 1995-2006. Aid peaked twice, as a response to post-conflict reconstruction: first in 1995-1997 due to the significant assistance given to Bosnia and Herzegovina (following the signing of the Dayton Peace Accords) and secondly in 2001-2002 due to the considerable amounts of aid given to Kosovo after the NATO bombings. Bosnia received massive amounts of humanitarian and reconstruction assistance. On average the country received about $730 million per year from 1996-2002. At $1,400 per head, assistance in the first two post-war years in Bosnia was higher than any other international state-building project since the Second World War. Kosovo also received massive amounts of financial aid in the 1999-2004 period: about $3.1 billion of international aid targeted mostly humanitarian priorities and helped rebuild most of the 120,000 houses destroyed in the violence. Significant assistance was also provided to Serbia after the end of the Milosevic era: from 2000-2005, Serbia received more the $3.5 billion. In total, throughout the last twenty years the European Union (European Commission and the member-states) provided about 66% of the assistance for the reconstruction of western Balkans and the United States about 15%. With regard to the relevant burden of the European Community and its member states, and with few exceptions (like Yugoslavia and Romania from 1991-1999), Community contributions were higher to much higher than all EU member states bilateral efforts taken together.

For many observers, foreign aid to the Balkans has a mixed record. A 2005 Report by the International Commission on the Balkans, a panel of experts and politicians including six former prime ministers headed by Giuliano Amato of Italy, reached a rather damning indictment: despite ploughing billions of aid and Europe dispatching “almost half of its deployable forces” to the region, the medium-term returns have been meager - “a mixture of weak states and international protectorates”, low growth, pervasive corruption, high unemployment, and public disaffection. Other studies that focused more specifically on the economic effectiveness of assistance have also reached dull conclusions, arguing that external aid has had a very weak positive impact on the economic performance” of the Balkan countries.

However, from another point of view aid to the Balkans can be considered as particularly successful in alleviating poverty, in providing food and shelter to refugees and in establishing a secure environment for resettlement. Moreover foreign aid helped preserving peace. In particular, the extensive use of political conditionality in development assistance did help to prevent the eruption of or a return to violent conflict. Probably the first display of this success story came in the first year after the signing of the Dayton Accords. In Autumn 1996, Momcilo Krajisnik, the newly-elect Bosnian Serb member of Bosnia’s three-person collective presidency, announced that he would not participate in the presidential swearing-in ceremony in Sarajevo. It was a move of defiance that threatened to undermine the viability of Dayton but also Bosnia’s existence as an independent entity. Carl Bildt, the international community’s High Representative in Bosnia, reacted by dispatching his senior deputy accompanied by the resident representatives of the World Bank, the European Bank for Reconstruction and Development, the European Union, and US president Clinton’s envoy for reconstruction to Bosnian Serbs’ headquarters in Pale. Together they warned the Bosnian Serb leadership that “not one penny of reconstruction aid would flow to Republica Srpska if Krajisnik failed to appear”. A few days later the Bosnian Serb leader was in Sarajevo to attend the ceremony. What makes this “peace conditionality” amazing is that it took place despite the High Representative’s strictly limited role on imposing its will on donors. This stance marked the beginning of a donor – especially an EU – policy of “peace conditionalities” to the Balkans that successfully implemented in the following years.

These “peace conditionalities” were gradually complemented by “democratic conditionality” clauses, providing economic assistance on condition that recipients respect human rights, democracy and the rule of law. At the same time western donors provided significant assistance for state-building. Although the objectives of democratization assistance partly collided with the aims of strengthening public administrations and security apparatuses, assistance to the Balkans became more and more coherent. All three different aspects of political conditions (peace, democracy and state building) sent clear messages to recipients. The strong presence of the EU in donor efforts played a crucial role. Co-ordination improved and aid policies gradually moved from the imposition of negative conditions (threats to cut aid) to more positive actions.

The goals of post-conflict reconstruction and stabilization are no longer adequate for dealing with the current problems in the western Balkans. Recognizing this, the donors are gradually redirecting aid to address longer-term developmental and structural problems. The principle of additionality (requiring local financing for aid projects) is already widely implemented, increasing local input in priority-setting. And donors encourage the drafting and implementation of multi-annual development programs, in order to help recipients determine concrete priorities. Aid to the Balkans has entered a period of maturity. Donors now focus more on economic than political conditionalities. Recipients have more ownership of project selection and foreign aid is now less top-down than in the past.

The hope is that aid will gradually become less significant for the stability and economic development of the region. However, the transition of the Balkan countries to a future with far less concessional resources may not be easy. Especially, countries that have received massive amounts of aid (like Bosnia and Kosovo) are suffering from “aid dependence” and they may find it difficult to cope with fewer grants and soft loans. And a sharp reduction in the amounts of aid may increase the chances of a return to violent conflict.

At the very end, the success of the EU’s stabilization and reconstruction efforts in the Balkans does not so much depend on aid but on the lure of full membership. However, the growing “enlargement fatigue” risks undermining this attraction. In the words of the Economist:

“there is a risk that the EU could end up dividing the Balkans, rather than modernising it—splitting the region into countries on the road to membership [...] and the ghetto of the rest, whose status would be uncertain and whose “pre-accession” limbo might be made worse by cuts in aid. (…) There is a danger of EU membership becoming like an old Soviet joke: we pretend to prepare for membership, they pretend to be ready to give it to us” (The Economist 2006).

Indeed this split is already apparent in the EU’s aid treatment of the Balkans. By 2006, the Western Balkans were receiving from the EU around half the level of aid per capita that Bulgaria and Romania received – although Kosovo and Montenegro were more generously treated than others. In the following years this gap is expected to widen substantially. On the one side, EU funds to the eastern Balkans are expected to rise spectacularly. On the other side, pre-accession aid to the western Balkans will also increase but just a little. Thus, the disproportional treatment between the new EU member-states of the eastern Balkans and the much poorer western Balkans will increase substantially, with Bulgaria and Romania receiving €162 and €183 respectively per capita per annum, while the much more unstable western Balkans will average €43. Thus, the proportion of foreign aid between the eastern and western countries of the region will change from 2:1 to about 4:1.

In July 2009, Carl Bildt, foreign minister of Sweden, the country that holds the EU Presidency in the second half of 2009, warned that “the European Union risks losing credibility and contributing to political instability in the Balkans unless it draws the region’s states closer to their goal of EU membership” (Financial Times 2009). Bildt, a man with significant experience in the Balkans, was not alone in this opinion. In fact, he reiterated Solana’s words in September 2005 that the Balkans are “more than any other region in the world … a European responsibility”. Europe, he added, “cannot afford to fail here”. But in order to reduce the risk of failure the European Union should take more concrete actions. It should not forget the Western Balkans.

Asteris Huliaras is Professor of Comparative Politics in the Department of Politics and International Relations, University of Peloponnese, Greece.