Orient Express Weekly (18-24 March 2013)

Economic troubles at the centre of regional problems

A week of high-stakes brinkmanship in the latest episode of the Eurozone crisis saw the Cypriot parliament unanimously rejecting the conditions of the late night €10 billion bailout deal hammered out the previous week in Brussels. Having to collect its share of the bailout or face bankruptcy and euro exit, Cyprus then came up with an alternative plan that would enable it to shield the reputation of its colossal and shady banking sector. The alternative plan was, however, promptly rejected in Brussels and in Berlin, forcing the Cypriot politicians to come up with a third plan during the frantic weekend of negotiations and uncertainty. Finally the plan was renegotiated with the Troika consisting of the European Commission, the International Monetary Fund, and the European Central Bank, and with the Finance Ministers of the Eurozone. What in the early morning hours of this Sunday looked like the final plan scrapped the most controversial proposal to inflict loses on the bank deposits of less than €100.000, but it does include bigger loses for the wealthier depositors, and closes down the second-largest bank on the island. Despite the fact that Cyprus’ economy is only 0.2% of the overall Eurozone output, the fate of the country at the outskirts of the Balkans could have big repercussions for the whole EU and its neighbours, both politically and economically.

The Eurozone crisis has already taken a large toll on the poorer Balkan countries at the periphery of the EU institutional framework. For instance, even though the official figures released in Macedonia last week show a decline in unemployment, this statistical category still hovers at above 30%, and in the last two years the average Macedonian salary of about €340 has lost 5% of its value in real terms. The EU delegation in Bosnia last week estimated that the unemployment rate in the country has reached a dramatic 44%, and that the economy may further struggle when Croatia joins the EU in June this year. Croatia – one of Bosnia’s main trading partners – will be obliged to enforce all the EU quality standards from June, but the Bosnian authorities have so far failed to adjust internal regulations to meet these new standards. Regardless of the shifting economic and political climate, the Roma community in the Balkans has always been particularly pressed by the poverty and social exclusion. In Bulgaria where Roma are estimated to comprise up to 10% of population – the largest share of any European country – official statistics estimate that about 40% of Roma live below the poverty line, and that child mortality in the community is almost three times higher than among the other Bulgarians.

State capture goes on as usual

The economic woes of the region are made much worse by the prolonged grip of the incompetent and corrupted political elites over state institutions and economic opportunities in most of the countries in the region. In Romania and Bulgaria EU accession has been notoriously impotent in dismantling this state-capture. Last week former Romanian PM Adrian Nastase was released on parole by the panel of three judges, after serving nine months of his two-year term for illegal fundraising practices in the 2004 presidential bid. Two of the judges were brought into the case only hours before the parole decision, after two judges previously sitting on the panel were arrested on charges of bribery in a separate case. This comes after serving PM Victor Ponta announced the previous week that “we are going to take Nastase out of jail”, and even touted Mr Nastase for a high position in the Social Democratic Party of Romania, which they both belong to. After weeks of protests against similar ruling practices, public gatherings seem to be dropping in size in neighboring Bulgaria, while the unfortunate trend of copycat self-immolations persists,[7] and a few protest organizers try to re-channel the protest energy into novel political organisations.

On Sunday, Macedonia held local elections in which ruling VMRO-DPMNE claimed victories in most races, including the capital Skopje. Local elections are particularly salient in the ethnically divided country where many competences were devolved to the local level after the brief 2001 rebellion by the Albanian Liberation Army. A coalition of multiethnic NGOs has warned that the electoral campaign was marred by the practice of routinely misusing public resources for party-political purposes. Political parties stand accused of promising jobs in the public sector, threatening employees with redundancy, offering scholarships, food and other material benefits in exchange for votes. In addition, the NGOs allege, “civil servants across the country are practically not working as they are busy engaged in their party HQs”. Still, these problems have mostly remained in the shadow of bitter rivalries between ethnic communities, and political rivalries within the communities.

Security issues

Commander of UN-mandated KFOR mission, German general Volker Halbauer, last week assessed the security situation in Kosovo as being “generally good” as the negotiations between Belgrade and Pristina approach the April 2nd deadline for reaching an agreement, said to be decisive for Serbian hopes of advancing their floundering EU membership bid. The general’s comments perhaps also illustrate the very modest standards of “good” security in Kosovo, as in the very same interview he also mentions that in Serb-dominated northern Kosovo criminal groups are able to detonate explosive devices with impunity, and that Kosovo Police are forced to guard 90 cemeteries after the last month’s attacks on Serb graveyards. Chances of a peaceful solution for another long-standing ethnic dispute received a boost last week, when imprisoned leader of Kurdistan workers’ party (PKK) Abdullah Ocalan called for a ceasefire with Turkey. The crowds gathered for the celebration of Kurdish New Year in Diyarbakir, in southeast Turkey, enthusiastically received Ocalan’s message. This is, however, the eighth ceasefire declared by the Kurdish rebels since they started the violent campaign in 1984. It is estimated that some 40.000 people have died in the course of three decades long-struggle. Initially PKK fighters demanded independence, but in the recent years they were advocating autonomy and broader cultural rights within Turkey.

Members of another Middle East former militant group could soon find their homes in the heart of the Balkans. Albanian PM Sali Berisha offered hospitality to up to 210 members of the People’s Mujahedin of Iran (or MEK, after its Persian acronym). MEK started out in mid-1960s as a political group promoting a strand of Marxist Islamism. It participated in the 1979 revolution against the Shah before falling out with Khomeini. MEK members subsequently fought on the Iraqi side against their own homeland in the decade long war between the two countries. After the US occupation, however, they were not safe in Shia dominated Iraq anymore, and were repeatedly calling for the US to evacuate them to a third country. Mr Berisha’s offer is thus seen as a way of sustaining Albania’s good relations with the US. The US security presence in the region was also a topic of conversation between the US vice-president Joe Biden and Romanian president Trian Basescu last week in Vatican, where the other Balkan leaders also converged to see the new Pope inaugurated. Mr Biden reassured Mr Basescu that building of the US missile defence facilities in Romania will go ahead as previously planned.

Beyond the headlines

In a relatively grim week in the Balkans as many as four regional derbies in the World Cup Qualifiers offered a welcome distraction. Bosnia defeated Greece to all but eliminate the Greeks, while Croatia achieved the same by defeating Serbia in Zagreb amid strong security measures. Montenegro stayed on the top of its group with an away victory against Moldova. Romania managed only a draw in Budapest against the Hungarian side that certainly won’t spur anyone to resurrect the famous ‘Magical Magyars’ nickname given to the golden generation of Ferenc Puskas, but they may yet secure a place in the World Cup Finals in Brazil in 2014. In the meantime, in the snow covered north of Slovenia, skiing champion Tina Maze was given a hero’s welcome back after an exceptionally successful season, which saw her break numerous skiing records.

Nearby, in the Slovenian capital of Ljubljana, the editorial board of the 100 Slavic novels project met for its main annual session. This international project is translating and publishing selected contemporary novelists from Slavic countries to other Slavic languages and English. At the Ljubljana meeting, publishers involved in the project agreed to expand another similar project entitled 100 Slavic short stories. At the other end of the Balkan Peninsula, construction of two new Metro stations and 1.5 kilometres of new railways in northwest Athens have been finalized after almost seven years. Some 75.000 commuters are expected to use the new facilities daily. Apparently, these commuters would be wise to use the time they save in travelling to drink one more cup of traditional Greek coffee. According to the recent findings by a group of researchers from the University of Athens Medical School, the hot beverage – variously known across the Balkans as Turkish, Greek, Cretan, Cypriot, Bosnian, Black and Homemade Coffee – might prolong the lifespan of regular drinkers.