Editor’s note Back to the future Having entered its 50th year since the signing of the Treaty of Rome, the European Union is now going through the stage of mature adolescence. It is the most critical — but also the most interesting — phase of its life. The EU Jubilee has provided a great opportunity for challenging peregrinations of the mind into the next 50 years — peregrinations in which the thinker’s imagination persistently flirts with the games of strategy and high politics. Charles Grant, director of the Center for European Reform, has made such a trip. In the excerpt that follows, Grant presents a log of his travels into the future, much of which has to do with our wider neighborhood — Southeast Europe, the Southeast Mediterranean and the Black Sea region.
By 2020 the British had opted in to most of the avant-garde groups they had excluded themselves from. The pundits who had predicted that enlargement would stop after the accession of Croatia in 2012 were proved wrong. The mood of optimism in Europe helped the cause of enlargement. Not only Serbia, Montenegro, Bosnia and Macedonia joined the EU, but also Iceland, Norway and Switzerland. However, enlargement moves very slowly. France has voted twice in referendums to keep out Turkey, while a Serb referendum defeated the membership hopes of Albania and Kosovo. Spain has blocked membership talks with Belarus, Moldova and Ukraine because its partners said no to Moroccan membership. The slow pace of enlargement has spurred the Union to offer several neighbors participation in most EU policies. For example Israel, inside the European Economic Area, takes part in everything the EU does bar foreign and defense policy. Meanwhile the French are preparing to vote for a third time on Turkish accession. They are starting to look more favorably on the Turks. Per capita incomes in Turkey have overtaken those of the poorer French regions; the Kurdish assembly in southeast Turkey has won autonomy over most areas of domestic policy; Turkey provides more troops for EU military missions than any country; and French companies have to tackle labor shortages at home by recruiting directly in Turkey. Opinion polls suggest that this time France will vote ‘Oui.’ Meanwhile in Britain, David Miliband’s government is proposing to join the euro and is promising a referendum. No one can foretell whether Grant’s pronouncements, following his excursion into the future of the European Union as far as the year 2027*, will be vindicated. No matter what, however, our wider neighborhood is bound to play a significant role in future developments, since the Union’s center of gravity is gradually and steadily moving further east and further south. Following the last great enlargement, the European Union is now facing a new challenge: to build relations of trust with its new neighbors, whether on its eastern borders (such as Russia and other countries of the former Soviet Union on the Black Sea) or on the shores of the Mediterranean. Relations of trust are being built — as proven by the BSEC example — through the operation of regional cooperation institutions and act as catalysts for the forming of multiple communities of common interests between countries, business ventures and the collective manifestations of the citizens’ society. So the desideratum for the next 50 years in our wider neighborhood is not just having good-neighborly relations but to have the widest possible collaboration on the part of all parties involved in order to shape a future in which peace and security, economic and social development, as well as the citizens’ welfare will be ensured. And this collaboration has to be under the aegis of European integration. *’The View From 2027,’ by Charles Grant: www.cer.org.uk/pdf/opinion_2027_cg_22march07.pdf
cover story Black Sea Economic Cooperation: the anniversary A quarterly review on the Greek presence in S.E. Europe & the S.E. Mediterranean
The bridge. is published quarterly by BusinessOnMedia Contact: 118 Kremou Street, Kallithea, 17675 Athens, Greece tel: +30-210.953.3362 fax: +30-210.953.3096 www.bridge-mag.com e-mail: bridge@avk.gr Publisher: Stavroula Sourila
15 years of cooperation 22-23 by Evripidis Stylianidis Cooperation vs zero-sum politics 24-25 by Dr Dimitrios Triantaphyllou Consolidate BSEC’s identity 26-28 Sergei V. Lavrov The European approach 30 by Yannis Valinakis
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Time for a fresh start 32 by Dr Hans-Dieter Lucas
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Editor in Chief: Vassiliki Nicoloulia
Echoes of Ozal’s vision 40-41 by Professor Mustafa Aydin
Editorial Team: Constantinos Angelopoulos Alexandra Fiada Antonis Kamaras Natassa Mastorakou Dimitris Pappas Simos Ververidis Internet Edition Manager Vasilis Loukanidis Proof-reading: Deborah Ellis Artwork team: Dimitris Stergiou Dimitris Papadimitriou Vangelis Nikas International Relations Coordinator Katerina Anastasaki Advertising Executive Manager: Lina Adamopoulou Montage-Printing: Kathimerini SA The bridge. quarterly review is also distributed along with the International Herald Tribune (IHT) and Kathimerini English Edition newspapers in Greece, Cyprus and Albania. The content of the magazine does not involve the reporting or the editorial departments of the IHT.
Dora Bakoyannis Europe 50 years from now
Kiev’s primary interests 42-43 by Professor Grigoriy Perepelytsia
frontlines 8-10
Sinan Ulgen Turkey’s EU accession
themes 62-64
Antonis Kamaras Complementary bilateral relations
Cooperation vs competition 44-46 by Dr Nadia Alexandrova-Arbatova An emerging economic regional power 47 by Leonidas Chrysanthopoulos
economy & market 71-75
BSTDB: A lever for development and regional cooperation 48-51 Hayrettin Kaplan 4 success stories 52-57 by Maria Vasileiou Letters to the editor As of our next issue, we shall be publishing letters expressing readers’ opinions on articles printed in The bridge. Please include your name and address and keep in mind that letters may be edited for reasons of clarity or space. Please address letters to the Editor at: The bridge, 118 Kremou St, Kallithea, 17675, Athens, Greece. e-mail: bridge@avk.gr © The bridge.. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The bridge.. Where opinion is expressed it is that of the authors and does not necessarily coincide with the editorial views of the publisher of The bridge.. All information in this magazine is verified to the best of the authors’ and the publisher’s ability. However, The bridge. does not accept responsibility for any loss arising from reliance on it.
dialogue
His Beatitude Anastasios, Archbishop of Tirana, Durres and All Albania Strengthening fundamental spiritual values
...about immigration Francis Fukuyama and European Muslims 90-91 by Anna Triandafyllidou Immigrants and political rights 92-94 by Ruby Gropas
civilization 114-116
Labor market needs 96-97 by Dr Eugenia Markova Dr Dimitris Keridis The new Euro-Atlantic strategy
Migrant communities 98-99 by Dr Marilena Koppa Comparing integration policies 100-101 by Dr Nikos Kotzias Immigrant integration in Greece 102-103 by Dr Angelos Syrigos
frontlines 20
Gazmend Kapllani The many faces of Albanian Islam
Facts and challenges 104-105 by Miltos Pavlou Managing immigration 106 by Kostis Hatzidakis
impressions 110 - 111
themes Underwater enigma
The future generation 108-109 by Ioannis Kasoulides
Book reviews Compiled by Alexandra Ioannidou
Oil and Cyprus 108-109 by Mikis Shanis A chill wind blows in Europe Rajko Grlic Balkan Border Post
128 - 129
Roots of radical populism 58-60 by Professor Alina Mungiu-Pippidi
market view 80 - 88 culture 126 - 127
Imported Euroskepticism 60-61 by Dr Daniel Smilov
and more...
contents
The EU is turnin The EU’s 50th birthday gives us Europeans the opportunity to look back on this unprecedented success story. It is time to recognize that the achievements of the past 50 years are a monumental demonstration of what political will and determination can deliver. But part of the success of European unification is also that certain characteristics of cooperation have developed which are unique in the world. The European Union is based on democracy and the rule of law. Cooperation is defined by the same rights and duties for all member states as well as the fundamental principles of transparency and subsidiarity. These principles of our cooperation are certainly not to be taken for granted and also serve as a model for cooperation in other parts of the world. Shared values Our shared values form Europe’s foundation: human dignity, freedom, responsibility, solidarity, diversity, tolerance and mutual respect. The EU is not simply a common economic area; it is a community of shared values, underpinned by a shared European way of life. Our shared values are essential for Europe to be able to act as a political entity. During the last 50 years Europe has enjoyed an era of peace, stability and prosperity. The achievements of the EU are impressive and are acknowledged by big and small countries, by leaders as well as ordinary people. The common market, single currency, common policies and the creation of the area of freedom, security and justice have proven
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By Kostas Ifantis
their value. The EU has become one of the most important players in world politics, a source of attraction for neighboring countries and an example for other regions to follow. The choice between enlargement and deepening is not necessarily the only way forward. The EU should meet its commitments to the states it has named as candidates or potential candidates. The incorporation of the acquis constitutes an important motive for their modernization and therefore enhances stability and prosperity in the region. However, if the EU hesitates or fails to honor what it has promised, this carries important dangers both for its own credibility and for any state’s reform procedure and, indirectly, for the regional policy. In order for candidate or potential candidate countries to accede to the EU, they must accept the fact that they have to operate in line with the European acquis. In this context, Greece supports the European perspective of the Western Balkans and Turkey. The Western Balkans As far as the Western Balkans are concerned, Greece considers their European perspective as its strategic goal and estimates that it will eventually lead to the transformation of the region into a zone of security, stability and prosperity. More specifically, with the adoption by these countries of the European standards in every sector, and in particular of behavior corresponding to a partner inside a tight union of states, as the EU is, it is hoped that, on the one hand, it will create a solid basis for a permanent improvement of our relations
with them and, on the other, that it will make the resolution of important pending issues easier during the period of adoption of the acquis. The existing monitoring mechanisms of the European Commission play an important role as far as this issue is concerned. We have every reason to be confident. Together, we Europeans are able to take our future into our own hands and mold it as we see fit. For this we need the support of the people in Europe. We look forward to continuing to enjoy and nurture our common values and ideas. Kostas Ifantis is an associate professor of international relations at the University of Athens and president of the Hellenic Center for European Studies (EKEM). Hellenic Center for European Studies website: www.ekem.gr
International Olympic Truce Center Olympia Lausanne Athens
WRITING CONTEST FOR THE OLYMPIC TRUCE A cornerstone of the ancient Olympic Games was the sacred tradition of ‘Ekecheiria,’ or Truce. Throughout the duration of the Olympic Truce, from the seventh day prior to the opening of the Games to the seventh day following the closing, all conflicts ceased, allowing athletes, artists and spectators to travel to Olympia, participate in the Games and return to their homelands in safety. The respect of the Olympic Truce for 12 centuries made it the longest-standing peace accord in history. In the 1990s the International Olympic Committee moved the legacy forward by calling upon all nations to observe the Olympic Truce and cease hostilities during the Olympic Games. The goal of the Olympic Movement is to contribute to building a peaceful and better world. The Olympic Truce turns the commitment of the Olympic Movement to promote its peaceful principles into concrete action. Thus, the Olympic Truce: Helps the youth of the world to participate peacefully in the Olympic Games; Attests that humanity respects high ideals, like the ideal of Olympism, which are above and beyond conflicts; Serves to promote dialogue, reconciliation and the search for durable solutions to all conflicts and encourages contact between belligerents; Educates future generations on the importance of tolerance and negotiation as a means of conflict resolution. *** The International Olympic Truce Center, a non-governmental organization included within the framework of the Olympic Movement, is pleased to announce a writing contest open to writers from all the countries of Southeastern Europe and the Southeastern Mediterranean without any limitations.
• • • •
The contest concerns the writing of a children’s novel inspired by the Olympic Truce ideals. The contest will honor literary excellence and will judge originality/creativity and overall writing quality. Submissions must be in English and must be unpublished. Submit no more than one piece per person, with a word count of between 4,000 and 6,000 words. The first three stories will be awarded a prize.
For more information on the contest, visit www.olympictruce.org.
PUBLI
The deadline for the submission is September 30, 2007. Results will be announced in December 2007 at a special ceremony in Athens.
Europe 50 years from now Whenever a milestone is reached it is time to ponder on what has been achieved. It is also time, however, to reflect upon the direction in which to proceed. The renowned playwright and dramatist Eugene Ionesco once said that ‘it is not the answer that enlightens, but the question.’ While in most instances this is probably true, in Europe’s case it is both. With regard to the latter then, the pertinent question to ask is what kind of Europe do we want 50 years from now? Herein lies the key to our Europe of tomorrow. With regard to the former, the answer remains a work in progress. It is important to be very clear: In view of the internal and external challenges to the Union, we need more Europe over the next 50 years, not less. In this spirit, we greatly welcomed the Berlin Declaration on March 25, 2007, which was put forward by the Council, the Parliament and the Commission. The declaration not only marked the EU’s 50th anniversary, but also gave fresh impetus to the debate on the Constitutional Treaty. For Greece, whatever course the European Union member states decide to pursue, it should have one clear and very specific goal: to bring the European Project forward. We now have a timetable of action which was set at the European Council in June 2006 and was reaffirmed at the meeting of the Council last December. We must help the German Presidency, and the forthcoming Portuguese Presidency, in a positive constructive spirit. Solutions must be reached by
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2008. Only a timely solution will enable the Union to fulfill its commitments to its citizens and the countries that aspire for accession. Our task is twofold. We must, on the one hand, respond to the internal challenges we face. These include addressing the perceived democratic deficit; securing social cohesion and the employment and prosperity of EU citizens; and promoting the EU’s economic development and competitiveness in the international arena. On the other hand, we must become fully capable of facing the external challenges of our globalized world. Europe’s future does not depend solely upon its internal processes. Our continent is not disengaged from the wider international environment; quite the opposite. As a result, we must link our thoughts about the future of Europe to those on global trends and developments. Examples of such trends and developments include the relative position, and strength, of the rising powers of Asia; the impact and effects of climate change; global insecurity in the face of violence, terrorism, and the disregard for human rights. Success story Looking back at Europe’s achievements, the European experiment is, by all accounts, an unprecedented success story. Broadly speaking, its success can be grouped into three main domains which have yielded tangible results: conflict prevention, economic growth, and the consolidation of democracy in countries such as Greece, Spain and Portugal.
By Dora Bakoyannis
Despite the present climate of disenchantment, it is indisputable that the past 50 years have created a long-term vision both for its members and its aspirant members. Indeed, EU membership has acted as a catalyst for the democratization and the economic modernization of the former communist countries of Europe in the years following the collapse of the Iron Curtain. Largely due to our so-called ‘soft-power,’ the benefits of the European experiment are not limited to the borders of our continent. In the international arena, Europe is the world’s largest economy, its major marketplace, and the leading trading power. Europe has also gone the extra mile and stood up to some of its global responsibilities. The Union and its member states account for nearly 55 percent of all international development assistance, as well as for 66 percent of all grant aid. The propagation of humanitarian values, democracy and the rule of law are flagships of the EU’s external policies. Challenging times Ironically, Europe’s success has, in some ways, facilitated talk of what some refer to as an internal ‘crisis.’ Yet crisis is too heavy-handed a word. Our core principles are not questioned, neither are the values which constitute the very foundations of the EU. What the EU is called upon to do is find how we can better build on our values. In other words, how we can best address our citizens’ anxieties; how we can best serve Europe’s citizens. Regarding Europe’s common future, we find ourselves at an awkward status quo. On
the one hand, the direction in which we want to take the EU remains ambiguous. On the other, we must effectively address Europeans’ daily anxieties. With regard to the former, the direction of Europe is mostly centered on the enlargement/deepening debate. Europeans, particularly those of the so-called ‘old’ member states, have become anxious about Europe’s continuous enlargement. Many claim that before proceeding with yet another enlargement, we should provide the Union with ample time to absorb its new members. In congruence, these new members should also be provided with the time to accustom themselves to EU membership. Deepening, proponents of this view argue, should be an essential prerequisite for enlarging. Others argue that we should focus on enlargement, setting aside, temporarily at least, the question of deepening. These two views largely depend, of course, on what future view of Europe each proponent holds. For Greece, the two are not mutually exclusive. To view enlargement and deepening as diametrically opposed is not conducive to Greece’s vision of the future of Europe. On the contrary, for Greece, enlargement and deepening can and ought to go hand in hand.
With regard to the latter, namely dealing with Europeans’ disenchantment, the debate is mostly centered around the economy and the functionings of the EU’s mechanisms. Young people living in Europe today face high unemployment, shaky social security systems, and sluggish economic growth. It must be remembered that what is now the European Union started off as an economic affair and this parameter has been a steady constant throughout the years. The economic benefits of belonging to the European Union have always taken center stage, and today’s economic difficulties unavoidably reflect and have an impact on perceptions of the EU project. Moreover, young Europeans often perceive a ‘democratic deficit’ of the Union and its ever-present internal antagonisms. They also feel detached and disengaged by what goes on ‘somewhere in Brussels,’ where decisions about their daily life are made. They perceive a lack of information flow, of consultation, and of transparency. The aforementioned turmoil indicates a lively democratic stage of our European project. The citizens of Europe demand that their Europe corresponds to their ideals, to their benchmarks. We, as politicians who represent them, must ensure that their voices are heard and must seek to make the necessary readjustments. This is what we have been doing during our reflection period. Yet more remains to be done. The Constitutional Treaty & thinking laterally We in Europe find ourselves in a stage of transition. After the period of reflection which followed the French and Dutch referenda, we must now proceed in an organized fashion until a final decision on Europe’s institutional future is reached.
Greece stands firmly behind the need to proceed with a Constitutional Treaty. We believe in it for the future of Europe and we are committed to constructively helping the presidencies move the process forward. In the world of politics, however, one must always have an alternative route in mind. Our cherished scheme is to take the Constitutional Treaty forward; of that there is no doubt. Yet, as politicians, we must also think laterally. In the unwelcome case that we do not reach an agreement on the Constitutional Treaty that is acceptable to all member states, we must be equipped with an alternative strategy. Various alternatives have already been voiced. Others may still be heard. Among those options which have already surfaced, however, one that could potentially facilitate the quantum leap that our European project needs, is to follow a strategy that could allow for a new integrative dynamism to be formed. The proposed Constitutional Treaty is not set in stone. There is always space for amendments, improvements and alterations. What is of absolute importance, however, is that certain reforms to which all members states have agreed, remain. Among others, it is central that the Constitutional Treaty clarifies the function of the Union as well as relations between the European Parliament, the Council and the Commission. This would clearly distinguish between the legislative and executive powers. It is also important, for instance, that all existing treaties are replaced by a single text that encompasses a legally binding ‘Charter of Fundamental Rights.’ The strengthened role and cooperation between the European Parliament and the national parliaments is also a vital element. Equally central is the institution of a president of the EU and a min-
frontlines
ister of foreign affairs, both of which enjoy real powers. The extension of qualified majority voting, thereby balancing the voting power of big and small member states; the solidarity clauses; and the EU’s legally binding personality are some other parts of the Constitutional Treaty which we should seriously consider safeguarding. The above are some of the reasons why Greece is a staunch supporter of proceeding with the Constitutional Treaty. We believe that it will allow for a more proficient and capable internal functioning of the EU. It will also allow us to deal with the challenges of tomorrow in a more efficient and effective fashion. Finding Europe’s soul The slippery slope down which many predicted that the EU would slide after the French and Dutch rejections of the proposed Constitutional Treaty has, thankfully, yet to be seen. On the contrary, a will for change has survived and the process for ratifying the Constitutional Treaty has proceeded smoothly. Indeed, as we did not ignore the two rejections, we must not, and cannot, overlook the overriding consent of so many member states which have already ratified the Constitutional Treaty. Moreover, we have welcomed two new member states, Bulgaria and Romania, and accession negotiations with Turkey and Croatia are under way despite the wellknown difficulties with Turkey. We have also managed to find what has often been an elusive common voice, in a common European position in foreign affairs. Europe stepped up its diplomacy in
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the Western Balkans and bolstered its common foreign policy in Lebanon and Iran, for instance. Furthermore, economic growth in both Germany and France is showing signs of rebounding, and the euro is going from strength to strength. There is, therefore, a great deal to be proud of and a lot to be optimistic about. The underlying reasons for successes such as these are fourfold. First, there is the enduring strength of the emerging ‘European consciousness.’ Second, the enthusiasm of the new member states and of the candidate states for the European project. Third, there is the revived economic growth of Europe’s historical locomotives, namely France and Germany. Finally, the realization that Europe is an indispensable factor in world affairs. Europe has earned, and widely enjoys, the respect and confidence of people around the globe. Moreover, it represents for many the sociopolitical, economic, and institutional model they want to see in their respective countries. Setting aside our achievements, however, one thing is certain: No course of action will suffice unless we renew our faith in
and enthusiasm for the European project. I cannot agree more with Chancellor Merkel’s remarks, while addressing the European Parliament, that ‘[w]e have to find Europe’s soul. For we do not really need to give a soul to Europe — it already has one.’ Returning, therefore, to the question posited at the beginning of this article: What kind of Europe do we want to have in 50 years? We want our Europe to continue to be a source of inspiration across the globe. We want our Europe to be an even more influential political entity with political and economic stamina and momentum. We want it to be more cohesive, and to have a more common voice in foreign policy issues. We want it to be even more at the forefront of global issues which are threatening our planet and humanity. We want it to continue to be the most fascinating mosaic of cultures which finds strength and unity through its diversity. We believe that it will always serve as a beacon of democracy, human rights and the rule of law. The challenge for us now is to lay the foundations which will make the kind of Europe we desire in 50 years: a Europe in which its citizens feel that it is a Union of its citizens; a demos in the amplest and most profound sense of the word. A Europe whose peoples share a common identity and a common destiny, parallel to their distinctive national identities. What kind of Europe do we want in 50 years? A Europe of prosperous, socially secure, competitive, empowered and influential citizens. A Europe of cultural radiance and economic weight. A Europe of political consequence for the world of tomorrow. A Europe that inspires. Dora Bakoyannis is minister for foreign affairs of the Hellenic Republic. Greek Ministry of Foreign Affairs website: www.mfa.gr
Opening Pandora’s box On March 26, United Nations SecretaryGeneral Ban Ki-moon submitted the Comprehensive Proposal for the Kosovo Status Settlement, drawn up by Martti Ahtisaari, the UN’s special envoy on Kosovo’s future status, to the Security Council for approval. In his report on the issue, which comprises the preamble of the document, Ahtisaari openly refers to independence under international supervision as the only solution that could guarantee a viable and stable Kosovo. This is the first time that the special envoy has officially used the taboo word ‘independence,’ something that he carefully avoided during the negotiations with Serbia and the Kosovo Albanians. Ahtisaari’s proposal With the exception of his personal recommendations in the preamble, Ahtisaari does not explicitly mention the term ‘independence’ in the provisions of the proposed settlement. Nevertheless, the plan envisions for Kosovo many characteristics that practically establish a status much resembling full independence. The plan implies that Kosovo has the right to adopt symbols such as an anthem and a flag. Moreover, it provides for features such as Kosovo’s own security mechanism and the right to conclude international agreements and seek membership in international organizations. All the above unambiguously point in the direction of sovereignty. However, there are those who argue that the above characteristics do not necessarily equal statehood. This position presents
By Stavros Kourtalis & George Zoris
examples drawn from international practice, where in many federal systems there are territorial sub-units that have similar symbols and associated states that enjoy separate treaty-making power and the right to join international organizations. The proposed settlement on Kosovo’s final status signals a major change in the international community’s attitude toward the Kosovo issue. Until recently the international community had been declaring its intention not to promote any solution that would lead to any change of borders in the region. This is clearly manifested in Security Council Resolution 1244 (1999), according to which the international community guaranteed the sovereignty and territorial integrity of the Federal Republic of Yugoslavia. However, according to many analysts, the latest developments fly in the face of this commitment. The opinions expressed in the preamble of the proposed plan and a careful reading and interpretation of the plan’s provisions leave no doubt that they virtually pave the way for a future secession of Kosovo from Serbia, envisaging a de facto independent Kosovo under international supervision. The reactions Serbia is sticking to its position of rejecting any settlement that would virtually create an independent Kosovo. The recently amended new Serbian Constitution is crystal-clear when it refers to the status of
Kosovo: Kosovo is (and will remain) Serbian sovereign ground. On the other hand, both the United States and the European Union have responded positively to Ahtisaari’s proposals and have openly declared their full support for the plan. And this is something natural, if one keeps in mind some factors: The animosity between the two ethnicities, caused by Belgrade’s long oppression of the Albanian community and the 1999 war, plus the Kosovo Albanians’ post-conflict expectations, have created a highly complex and volatile situation which calls for urgent measures. At this point an immediate settlement would be most welcome. On the part of the international community, the complexity of the situation has sustained any possibility of a settlement as unrealistic, seeing as that would keep Kosovo under Serbian sovereignty, even if not admitting to doing so. Nevertheless, Ahtisaari’s Comprehensive Proposal is an effort that is in accordance with the spirit of conflict resolution. As far as Russia is concerned, the issue of Kosovo is a case of special interest. In the framework of its external policy, Russia maintains close ties with Belgrade and wishes to keep them intact. Furthermore, Moscow’s stance toward the Comprehensive Proposal must be seen in combination with the fact that Russia itself faces similar problems to those of Serbia within its own borders. Centrifugal powers have been developed within
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the Russian Federation, most notably in the region of the Caucasus. Keeping this in mind, it is obvious that a settlement which would lead to an independent Kosovo could establish a perilous precedent, thus giving the right to secessionist endeavors to (re)emerge and stake similar claims. This explains why Russia has warned that, as a member of the Security Council, it will veto any settlement that is not accepted by Serbia as well. But even if Serbia accepts a proposal that would grant Kosovo independence, Moscow has proclaimed that it will react by demanding similar solutions to be applied regarding Abkhazia and South Ossetia, two regions which are outside the Russian Federation but which maintain strong ties with the Russian population. Possibilities & risks It is evident that Kosovo stands at a crossroads. The options for the parties involved are either to go forward with the implementation of the proposed settlement or to reject it and embark on a new round of negotiations. There is the risk though that both could lead to hazardous results. If Ahtisaari’s plan is accepted, Serbia will have to pay a significant price. Due to the factors already mentioned, it is certain that such a contingency would cause a deep political crisis in Serbia, which would, in turn, generate instability in the country, and potentially affect the whole of the Balkan region. However, the implications of such a prospect could be alleviated to a considerable degree by political and economical benefits deriving from the European Union, an incentive that the EU has already offered in
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an attempt to take the edge off the Serbs’ objections to the Comprehensive Proposal. However, we must also bear in mind Moscow’s veto threats as well. Even though in his report to the UN secretary-general Ahtisaari himself specifically mentions that ‘Kosovo is a unique case that demands a unique solution. It does not create a precedent for other unresolved conflicts,’ there are no guarantees for that. However exacerbating it might be regarded, one should not omit the likelihood that recognition of Kosovo’s independence would generate similar aspirations for secessionists in the Russian Federation (and around the globe as well), a possibility which adds up to opening Pandora’s box in respect to peace and stability. On the other hand, a potential failure of the Security Council to approve the Comprehensive Proposal carries great risks as well. The international community is fully aware that time is running out as far as the possibility of settling the matter by diplomatic means is concerned. The resolution of the Kosovo issue is behind schedule due to the unfruitful and time-consuming negotiations between the involved parties and the recent Serbian elections (21/1/2007) that failed to produce a working majority in parliament. These delays have aggravated the situation in Kosovo, where unrest among the population is increasing dangerously. This is proven by the growing rate of violent incidents between the ethnic Albanian and Serb communities, and the events of February 10 this year when an Albanian demonstration turned into a riot, resulting in the forceful intervention of UNMIK
forces (two demonstrators were killed on that occasion). It is obvious that the rejection of Ahtisaari’s plan and the recommencement of negotiations would result in wasting even more precious time, most probably causing the situation in Kosovo to deteriorate. Domino effect Whether the proposed plan is approved or not, it is apparent that any future developments in either of these two directions will not be trouble-free. On the contrary, both paths will be full of pitfalls and risks. The only certainty will be the fact that the issue of Kosovo demands the full, intensive and continuous attention of the international community. In order to limit the risks, any action on the matter should first take into account the complex dynamics of the problem and the emergency character of the situation. Patience and careful planning are essential in order for any measures that might be taken to bear fruit. Most importantly, it should be clearly understood that the issue of Kosovo is, directly or indirectly, linked to significant security matters in the region of the Balkans and elsewhere. Therefore, any dangerous implications in the case of Kosovo could produce a domino effect of negative consequences in other such cases. This fact undeniably makes Kosovo a top priority of dire importance on the international community’s agenda. Stavros Kourtalis and George Zoris are political scientists and research fellows at the Hellenic Center for European Studies. Hellenic Center for European Studies website: www.ekem.gr
Dynamic reactivation of HiPERB
of our country for the European perspective of the Balkans, through the funding of infrastructure projects and the provision of know-how, aimed at the fastest possible adaptation of the societies and economies of the region to European standards. Entering a new phase The current leadership of the Foreign Ministry achieved the full reactivation and the extension of the program for the next five years (2007-2011), by decision of the Hellenic Parliament. This second phase of HiPERB is aiming at increasing the reciprocity of projects for Greece, the timely securing of credit, and the promotion of a comprehensive strategy for the objectives that must be served by this assistance. Within this framework, emphasis will be put on basic infrastructure projects, such as road projects (e.g. the Pan-European Corridor X) and modern and cutting-edge technology projects, such as the SEELight Project. At the same time, with the region’s economic integration remaining the strategic objective, the Monitoring Committee of HiPERB
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During the next five years, greater emphasis will be put on basic infrastructure projects in the Western Balkans and modern, cutting-edge technology projects. The possibility of increasing national participation of the co-contracting countries, as well as co-funding by Greek agencies, will be explored. Concurrently, the participation of Greek businesses in the project implementation process will be pursued, while investments from Greek businesses will be encouraged, through HiPERB, in countries with low absorption to date (mainly Serbia, Montenegro, Bosnia & Herzegovina and fYROM). More specifically, with regard to private productive investments, pursuant to Laws 2996/2002 and 2601/1998 on the support of private investments, covered by HiPERB subsidies are investment projects abroad in the manufacturing sector as well as modern agriculture, livestock and fishing facilities. The expenses covered include, among other things: the construction, expansion and modernization of building facilities; the purchase, installation and rental of machinery and equipment; the purchase and installation of automation and IT systems; and the purchase of means of transport for persons and materials.
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The implementation of the Hellenic Plan for the Economic Reconstruction of the Balkans (HiPERB) is moving ahead dynamically, following the approval by the Hellenic Parliament of the extension of the program for another five years, as well as its revitalization aiming at a more effective absorption of the available funds. The total budget of the program amounts to 550 million euros, which is earmarked for carrying out projects in Serbia (including Kosovo), Montenegro, the Former Yugoslav Republic of Macedonia (fYROM), Romania, Bulgaria, Albania and Bosnia&Herzegovina. The second phase of HiPERB was presented in a joint press conference at the Ministry of Foreign Affairs, on April 17, by Deputy Foreign Minister Evripidis Stylianidis and the Secretary-General for International Economic Relations and Development Cooperation, Theodore Skylakakis. ‘HiPERB is an important tool for our foreign policy,’ Mr. Stylianidis stressed. ‘It is the tangible presence of Greece in the wider region of the Balkans.’ HiPERB is an important tool for our foreign policy. It reflects the practical support
Theodore Skylakakis, Secretary General for International Economic Relations and Development Cooperation and Chairman of the HiPERB Monitoring Committee.
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HPERB support on subsidies
examines the prospects of increased national participation of the co-contracting countries, especially in projects of a social and welfare nature (hospitals and clinics, museums etc). The central objective of HiPERB is for our country to contribute to the economic integration of Southeast Europe, and in particular to support the creation of a single economic space in the Western Balkans, in order to facilitate the region’s European perspective. The law establishing HiPERB was passed in 2002 (Law 2996/2002) and initially provided for a five-year duration of the program (2002-2006). Half of the 550million-euro HiPERB budget concerns Serbia (232.5 mil euros) and Montenegro (17.5 million euros), with 75 million for fYROM, 74 million for Romania, 54.3 million for Bulgaria, 49.9 million for Albania, and 19.5 million for Bosnia&Herzegovina, while 3% of the budget covers administration and management costs. The bulk of HiPERB funding (79%) is earmarked for public investments (largescale projects), 20% for private productive investments (financed under the capital
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Amount of subsidies: 800.000 to 5.000.000 euros for manufacturing units, 300.000 to 1.500.000 euros for agricultural, livestock and fishing concerns. Total HiPERB support cannot exceed 30% of the investment, and the participation of the investor itself must be at least 40%. The investments must be completed and put into operation within three years of the lodging of the relevant application. Subsidized businesses are under obligation, among other things, not to interrupt operation and production activity, and to maintain the number of new jobs created for at least five years from the date on which production commences. Additionally, in reference to the HiPERB Small Projects Fund, it was noted that this absorbs 1% of the Plan’s total funds for projects of emergency nature (up to 50.000 euros) and projects with an immediate impact on local communities. Proposals are to be submitted to our local diplomatic missions, while final approval is given by the Foreign Ministry. Amount of subsidies Total sum available Absorption rate Number of approved (millions of euros) (approvals) (%) investments Serbia 46.5 9.6% 5 FYROM 15 19.5% 6 Romania 14.1 85.4% 19 Bulgaria 11 107.6% 14 Albania 10 92.7% 13 Bosnia-Herzegovina 4 0% Montenegro 3.5 0% Kosovo 3 0% TOTAL 107 37.8% 57
Development Law 2601/1998), while the remaining 1% is for the co-funding of small-scale projects, through the local Greek embassies. Within this framework, the Foreign Ministry renegotiated the terms and conditions of HiPERB with all the recipient countries and proceeded to detailed financial and technical evaluations of all the projects sub-
New jobs 78 442 950 1,581 462 3,513
mitted. Deputy Foreign Minister Stylianidis stated that the HiPERB Monitoring Committee was re-established on a new and more efficient basis and that it has convened 12 times, to date, to approve new projects and to monitor progress and disbursements of projects under way.
Today, our country’s total commitments come to 270.6 million euros or 52.1% of the HiPERB’s total budget (compared with 6.8% in 2004), of which 227 million euros is for public investments (or 55.4 % of the budget, as compared to just 1.4% in 2004). At the same time, our respective commitments for small-scale projects currently come to 2 million euros or 39.5% of the budget (as compared to 809.000 euros or 15.6% in 2004). Moreover, the total cost of the projects that have already been included in the HiPERB and are currently under way exceeds 720 million euros. Major public projects under HiPERB include: The Building of Friendship of Greece and Bosnia&Herzegovina in Sarajevo, with a budget of 16.8 million euros and Greek participation coming to 13.5 million. This project is expected to be completed by coming June. The Pan-European Corridor X (Serbia and fYROM): This concerns the upgrading of the existing road to motorway standards, connecting Thessaloniki with Skopje and Belgrade, extending from there to Salzburg/Austria via Zagreb and Ljubljana. The total length of the project, which will be co-funded by Greece through HiPERB, comes to approximately 108 km with a total budget
of 625 million euros and Greek participation coming to about 150 million. A tender process is under way for the Serbian part of the project, with the objective of construction beginning within 2007, whereas a feasibility study is being drafted for the fYROM part. The Sagiada-Konispol-Sarande Corridor in Albania: The construction of the road will serve Greek minority regions. The total length is 40.5km and the budget comes to 37.6 million euros, with Greek participation of approximately 30 million. A tender process is also under way for this project. The SEELight high-speed fiber-optic network program, linking university communities and research institutes: This project concerns the installation and operation of a high-speed electronic network linking several Greek universities and research centres with counterparts in Serbia, Romania, Bulgaria and fYROM. The total cost is estimated at 20 million euros, with Greek participation through HiPERB accounting for 80% of the budget. This project has been approved and the tender documents are being prepared.
Apart from the abovementioned projects, important healthcare projects -such as hospitals, provision of medical equipment and medical emergency centres- are receiving HiPERB funding in Bulgaria, Romania, Montenegro and Bosnia&Herzegovina. The renovation of the Museum of the 21st Century (mainly the Hellenistic exhibit wing) in Constanta, Romania, is also receiving HiPERB funds. With regard to the small scale projects fund, the sum of 2 million euros has been earmarked for small-scale infrastructure projects (roads in villages, sewage and water networks, small restoration projects, schools and laboratory equipment, mobile first aid units, ambulances, medical machinery, etc). With regard to private productive investments, to date Albania and Bulgaria have absorbed all of the funds allocated to them, followed by Romania with about 86% absorption, fYROM at 20%, and Serbia at 9.6%. Thus, the total of approved investments to date comes to 41.6 million euros as compared to 29.3 million in 2004, with 57 ongoing or completed investment plans in the region and more than 3,500 new jobs created.
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troversion: X The only way forward By Panos Leivadas
Recent years have witnessed the strategy of extroversion being adopted by an increasing number of states and other entities of the public and private sectors around the world. Greece, empowered by its recent accomplishments of global caliber and determined to seize the New Era, is following this path in an uncompromising manner. Extroversion refers to the economic interaction of countries with international markets, which has resulted from the changes taking place in world structures (i.e. unprecedented technological developments, compression of time and space, and the free movement of goods, capital, services and people). On another level, the term encompasses a broad political approach and overall mentality, such as taking notice as well as advantage of the opportunities that a specific region presents or adhering to an active and constructive foreign policy. Extroversion, therefore, presupposes a modern, forwardlooking understanding of politics. At the same time, it clearly signifies a break with the isolation or — more importantly — the fear of anything new that often characterize an introverted political approach. It becomes clear, therefore, that in our epoch extroversion applies to all countries. Greece, inspired to earn the place it deserves in the world, places great emphasis
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on the above strategy, both on an economic and a political level. The introverted approach of the past, partly favored by factors such as geography, had very specific limitations. For instance, a growth rate that was fueled, for the greatest part, by the European Support Framework packages or the high level of the state’s internal and external borrowing was not durable. Moreover, the structural problems of the state and the economy also undermined the country’s long-term development. Embrace extroversion now Historically speaking, there has never been a more appropriate time to embrace extroversion than now. And that is because of the fundamental changes that have taken place in our corner of the world, turning neighboring countries from cleavages that impeded our commercial, economic, touristic and other forms of access to our partners, into countries that share the same vision of democracy and freedom as us. Specifically, our neighbors aspire to the benefits of an open economy, therefore looking up to Greece as a success story. To the extent that they seek to accede to Euro-Atlantic organizations, they look to our support and assistance. All in all, our neighborhood has been redefined to our benefit. Practically speaking and in terms of the economy we now place increased emphasis
on our exports policy as well as on the attraction of foreign direct investment (FDI), both of which constitute an inseparable component of extroverted growth. To that end, the government has undertaken specific initiatives that not only aim at maximizing the competitiveness of Greek products and services — favoring exports and FDI alike — but which also facilitate our interaction with foreign markets. Incentives for business First, there has been a series of reforms rendering Greece’s business environment more attractive to foreign investors. For instance, the new Tax Reform Act has significantly reduced corporate tax rates while the Investment Incentives Act also offers strong incentives by providing maximum possible direct stipends. It is indicative that, by March 2007, investment projects worth 5.5 billion euros had already been approved. As for the Investment Incentives Act for the 20072013 period, the above provides the Greek periphery with the highest — historically speaking — direct stipends. From simplifying the complex bureaucratic procedures to modernizing the banking sector, the list of important initiatives taken toward the heightening of investors’
interest goes on. By the same token, the Privatizations Program for the 2004-2006 period (that has already yielded a total profit of 4.6 billion euros) or the high absorbency rates for the Third EU Support Framework Program (that reached 58 percent in 2006 compared to 23 percent in March 2004) are steps in the right direction. The statistics best highlight the fact that our efforts have begun to bear fruit: Total investments increased by almost 10 percent compared to 2005, while foreign direct investment was eight times higher in 2006 compared the previous year. With regard to the competitiveness of Greek products and services, it is telling that the total value of exports increased by 18 percent; the increase for the years 20042006 reached a remarkable 35 percent. Here, too, specific initiatives such as the European Operational Program of Competitiveness and the state’s increased focus on research and development or its tangible support of innovation have already brought significant results. At the same time, the upgrade of infrastructure through newly implemented reforms such as the Public-Private Partnership Act, under which 2.5 billion euros’ worth of projects have been approved by the Interministerial Committee, as well as a series of bold initiatives in the field of human resources development, maximize the com-
petitiveness of our comparative advantages, from the shipping sector, energy, tourism and the financial services to traditional Greek products such as saffron, mastic or virgin olive oil. Successful communications The contribution of communications toward that same goal should also be mentioned. Specifically, during events of international publicity, such as the Athens Olympic Games in 2004, Greece has methodically and successfully communicated to its peers some of its competitive advantages that previously were not widely known. In the process, our national image abroad has been enriched; positive perceptions about Greece now extend to all aspects of this contemporary and very attractive country. Its products and services are thus rendered more competitive. Furthermore, we have created or further extended our networks with other countries, a vital component of and prerequisite for extroversion. Generally speaking, we rely on the bridges of trust and cooperation that we have built over time and thanks to our constructive presence in foreign parts in order to establish extensive economic cooperation with countries around the globe. Specifically, in terms of our neighborhood, Greece’s foreign policy is also fully aligned with the goals of extroversion: We are now taking a constructive approach regarding issues that have troubled Greece for decades
so as to best capitalize on the opportunities that the new reality presents. Firmly backing the European perspective of the Western Balkans as well as Turkey, under the supposition, of course, that these countries fully comply with specific prerequisites put forward by the Union, we have established an extensive economic presence in the region. It is telling, for instance, that more than 3,600 Greek companies now operate in our regional neighborhood while Greek investments exceed a remarkable 12 billion euros. With the aim of extroverted growth, Greece puts special emphasis on its energy diplomacy. Specifically, recent developments such as the historic agreement between Greece, Russia and Bulgaria for the construction of the Burgas-Alexandroupolis oil pipeline have repositioned Greece on the world energy map. Extroversion should not be considered a panacea. Nevertheless, it is clearly a powerful tool for the accomplishment of any one state’s national goals of progress and prosperity within the competitive global environment. To that end, bold political initiatives and wide consent among stakeholders are required. The fact that today’s Greece has achieved both justifiably fills citizens with deep faith in who we are, where we are going and what we can become. Panos Leivadas is Greece’s secretary-general of information. Greek Secretariat General of Information website: www.gsis.gr/english/index.html
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The new Euro-Atlantic strategy By Dr Dimitris Keridis
Next Steps in Forging a Euro-Atlantic Strategy for the Wider Black Sea1 (German Marshall Fund, 2006) is a fascinating collection of essays by Dr Ronald D. Asmus, executive director of the Transatlantic Center of the GMF and a well-known and much respected analyst. Following the end of the Cold War, the retreat of Russia and the expansion of the Euro-Atlantic institutions eastward, the Black Sea region has acquired an enhanced meaning. The region in itself has wider political implications as it draws Southern Caucasus countries such as Armenia, Georgia and Azerbaijan closer to Europe. Such a coming together has been further helped by the color revolutions in Ukraine and Georgia and the acceleration of liberal and democratic reforms. Also, the increased international emphasis on the Middle East following September 11 and the American responses to the terrorist attacks have shifted attention from the Balkans to the wider Black Sea region as a stepping stone between Europe and the Middle East. Finally, its gradual transformation into an important global energy hub has promoted its conceptualization as a whole. 1. Dr Ronald D. Asmus (ed), Next Steps in Forging a Euro-Atlantic Strategy for the Wider Black Sea, GMF, 2006. The book can be downloaded from the GMF website at the following address: http://www.gmfus.org/publications/article.cfm?id=234.
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The key actors The book is a first-rate volume aiming to address a new Euro-Atlantic strategy for the region and on what the contents of such a strategy could and should be. It is both analytical and policy-oriented, dealing with the past to explain the present and help move toward a more stable and prosperous future. In the first part the editor of the book, Dr Asmus, provides an overview that lays out the parameters for a new wider Black Sea strategy. In the second part, the views of three key Western actors in the region — the United States, Germany and Turkey — are explored in essays by Matthew J. Bryza (deputy assistant secretary of state for European and Eurasian affairs), Jorg Himmelreich (senior transatlantic fellow at the GMF in Berlin) and Suat Kiniklioglu (director of the GMF’s Ankara office). The third part includes essays by Carl Hartzell (counselor at the Permanent Representation of Sweden to the EU), on the future evolution of EU policy toward the region, and Jeffrey Simon (senior research fellow at the National Defense University in the United States), on NATO’s role in contributing to regional security.
Russia The fourth part is devoted to Russia and alternative policy approaches for dealing with Moscow in the context of a new wider Black Sea strategy with the aim of better understanding how different perspectives on Russia translate into alternative Western policy options. It reflects the results of a Red vs Blue team exercise. The Red team is represented by Bruce P. Jackson (president of the Project on Transitional Democracies) and the Blue team by F. Stephen Larrabee (Corporate Chair for European Security, RAND). The fifth part looks at the growing role that energy security plays in the region and consists of essays by Vladimir Socor (senior fellow at the Jamestown Foundation) and Michael Thumann (foreign editor at Die Zeit). The sixth and final part of the book consists of essays taking into account two different sets of regional actors. The first reflects the national perspectives of Ukraine and the three countries of the Southern Caucasus, Armenia, Georgia and Azerbaijan. It also includes essays on the political potential of regional actors such as the Black Sea Economic Cooperation (BSEC) and on the potential role of civil society in resolving the region’s frozen conflicts. Dr Dimitris Keridis is the Constantine Karamanlis associate professor in Hellenic and Southeastern European Studies, Fletcher School, Tufts University. Tufts University website: www.fletcher.tufts.edu/
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On June 25, 2007, the Organization of the Black Sea Economic Cooperation will be celebrating its 15th anniversary with a summit in Istanbul, the city where it was founded in 1992. The BSEC finds itself at a crucial crossroads as the wider Black Sea area — the BSEC area, including Southeastern Europe, littoral states of the Black Sea and the Caucasus — is emerging as a focal point for Europe as the EU seeks to expand its space of security and stability and the process of regional cooperation takes a firmer hold. The cover story in this issue of The bridge seeks to address the processes at play in the region, the contribution by the BSEC and its member states, and the organization’s future prospects at a time when the interest of the European Union and other actors such as the United States in harnessing the region’s potential is growing. It is in this context that a number of policy practitioners and analysts were asked to reflect on the state of affairs of the region and the BSEC today by contributing to the problematique as to how to best serve the interests of the region’s stakeholders at a time when cooperation in the sectors of energy, transport, the environment and trade, among other areas, has become the priority of our times. The cover story was compiled in collaboration with the International Center for Black Sea Studies (ICBSS)
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This year we are celebrating the 15th anniversary of the Organization of the Black Sea Economic Cooperation (BSEC). The BSEC was established in June 1992, upon the initiative of the late Turgut Ozal, then president of Turkey, and became a fullfledged regional cooperation organization after the adoption of its charter in 1999. The main goal set by its 12 member states was, and still remains, the promotion of multilateral economic cooperation to enhance political dialogue and finally to bring the countries of the wider Black Sea region closer, thus reinforcing peace and stability. Since 1989 we have witnessed many changes in our region. In 1992, at a crucial turning point for the wider Black Sea region and the Balkans, Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, the Russian Federation, Turkey and Ukraine signed the agreement for the establishment of the BSEC, to which the former confederated union of Serbia and Montenegro acceded in 2004. Over those 15 years, the BSEC has become a forum for discussion and cooperation in areas ranging from energy to transport, trade and economic development, the environment, tourism, agriculture and combating organized crime. Furthermore, the BSEC has built a permanent and extensive institutional framework of cooperation that covers all levels of governance, intergovernmental, parliamentary, financial and academic. It has also elaborated binding agreements and common action plans on key issues of regional cooperation. The BSEC Agreement on Combating Organized Crime and its protocols, as well as the Agreements
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years By Evripidis Stylianidis
on Cooperation in Emergency Situations, both signed in 1998, are examples. Strengthening the BSEC Greece is actively participating in the activities of the organization. We have believed from the very beginning in its role and importance. During the second Greek Chairmanship of the BSEC, in the period November 2004 to April 2005, we made the strengthening of the organization’s internal structures a main priority. In this context, we have also worked to enhance and deepen multilateral cooperation in various sectors. The historical and traditionally good relations shared between Greece and the peoples of the Black Sea and the Balkans constitute another incentive for our commitment to the goals of the BSEC. During the Greek Chairmanship-in-office, seven ministerial meetings were held, on transport, energy, tourism, the fight
against organized crime, good governance, education, research and technology. Likewise, a business forum took place in Thessaloniki and an interparliamentary assembly in Athens. The meeting of ministers of foreign affairs compounded the Komotini Statement, which, following the approval of all ministerial decisions, set specific political and economic goals, thus adding vigor to the next steps of the BSEC. Enhancing relations With the precious support of all the member states, Greece did its utmost to enhance the relations between the BSEC and the EU — and finally succeeded. This venture has created a new dimension following the recent accession of Romania and Bulgaria, being at the same time compatible with the European Union’s New Neighborhood Policy for the countries of the Black Sea and the Caucasus, and we hope that it will create a new Black Sea regional dimension of the
of cooperation EU. The effectiveness of the Greek Chairmanship-in-office was appreciated by all member states and this recognition was confirmed by the unanimous decision to elect a Greek diplomat to the position of secretary-general of the BSEC in Istanbul. A dynamic space Today, the Black Sea area is being transformed into a new dynamic economic space, which, despite its problems, presents many opportunities and is of special interest. Most countries in the region are developing markets, given that they produce or transfer energy, thus justifying their steadily increasing geostrategic importance. Being a player in this regional game, Greece has made use of the BSEC capabilities and managed to transform itself from an energy-consuming country to a producer-transit country. This is proven by the steps we have taken toward the production, export and development of knowhow regarding alternative energy resources, as well as by the construction of a gas pipeline connecting Baku (Azerbaijan) and Tbilisi (Georgia), Karatsabey (Turkey), Komotini (Greece) and Otranto (Italy), and, finally, by the construction of the BurgasAlexandroupolis oil pipeline. Within this new economic and developmental context, the BSEC is called upon
to define its new role, exploiting the new opportunities and creating new policies. Moreover, I also wish to refer to two business issues regarding the BSEC. The development dimension The first is related to the development dimension of BSEC activities. In this framework, there is a need for better use of the financial tools of the organization, through the submission of regional and development projects under the Project Development Fund (PDF) which has been created to serve this purpose. Beyond the orientation of the organization toward fostering closer economic and business relations between its member states, the Black Sea region, in accordance with the Development Assistance Committee of the OECD, has been included in the list of the aid recipient countries. Greece, as a member of the DAC since 1999, has played an active role, contributing to the achievement of the Millennium Development Goals. Road of the Argonauts The second issue I would like to address is the need for the development of transportation links in the Black Sea area. Greece, in cooperation with the member states and the Permanent International Secretariat of the BSEC (PERMIS), promotes the idea of the creation of a ring road around the Black Sea,
exploiting and reinforcing the existing road links. It is our firm belief that this project will improve the communication of the countries of the region and facilitate the movement of goods and citizens, thus bringing the peoples of the region closer. We suggest that the abovementioned route be named the Argonauts Road, since the tale of the seafaring heroes is an historically connecting myth for the whole region. It is worth mentioning that, so far, there has been a positive response for this strategic project from all governments of the member states. A leading role In conclusion, I wish to stress that regional cooperation within the framework of the BSEC constitutes a unique opportunity to further develop our bilateral and multilateral relations. We therefore look forward to continuing our joint efforts in this field and to constantly strengthening them on all levels. The organization can and should be able to play a leading role in bringing the countries of the Black Sea and the Balkans closer to the European Union, as well as in consolidating economic development, peace, stability and prosperity in the wider Black Sea area and the Balkans.
Evripidis Stylianidis is deputy minister for foreign affairs of the Hellenic Republic. Greek Ministry of Foreign Affairs website: www.mfa.gr
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Cooperation The wider Black Sea area is slowly but steadily becoming the new El Dorado in terms of foreign policy and research interest — much as the last 15 years was a period of intense interest in developments in the Balkans with serious debate, discussion and research on how to best integrate the region with the rest of Europe. Now, willy-nilly, a plethora of conferences, workshops, seminars and publications are focused on the growing strategic significance of the Black Sea basin, its role in the energy security equation, and the need to ensure stability in the wider region. Two conflicting factors What does the growing interest in the wider Black Sea area imply? In principle, it is a combination of two conflicting factors. The first is a geopolitical/geostrategic approach to the region’s politics with ideological overtones where the points of reference are national and bloc interests. In other words, what counts here is the Euro-Atlantic perspective vis-a-vis the Russian outlook; whether Russia’s increasing assertiveness is a factor of stability or instability etc. The second factor is the advent of a culture of concrete cooperation at regional, sub-regional and/or transregional levels. This latter approach is best represented by the Organization of the Black Sea Economic Cooperation (BSEC) and its institutional framework, which, in its 15 years of existence, has produced substantive collaborative initiatives in an ever-growing number of policy areas. In other words, here the emphasis is on cooperation, mutual benefits, constructive diplomacy, economic de-
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By Dr Dimitrios Triantaphyllou
velopment and growth, and on working together with other like-minded entities. The very existence of the two aforementioned approaches — the geopolitical/ideological and the cooperative — suggests clashing or opposing visions as to how to best harness the region’s potential. While the first approach views the region through the prism of competing interests between the West and Russia, the second focuses on the obvious — that is to say, it seeks to put into practice the values of cooperation. While the first approach presumes that cooperation with Russia, if possible, can only take place if the West has a common strategy based on the common ideological, historical and cultural connections of its constituent countries, the second does not attempt to challenge Russian interests but takes them into account and accepts the assumption that Russia can have an open mind regarding Western concerns. Energy security & Turkey A key element in this debate is, undoubtedly, the question of energy security. Energy security in the European context is a particularly interesting case study, given the number of issues at play. It involves the security of supply, the security of demand, the reliability of contractual arrangements on energy, the physical security of critical installations and their personnel, the interplay between na-
tional and supranational energy policies, and the quality of overall relations with Russia. With regard to the wider Black Sea area, it has to take into account the recent developments (mostly positive) in that part of the world. In other words, it involves a number of variables and possible outcomes, including the linkage between EU foreign policy and energy policy. Thus, energy policy is not solely an economic concern but one which also involves political and security imperatives. Another important piece of the puzzle is the wider strategic debate, the global context where developments in Southwest Asia (the geographic and political space stretching from the Middle East to Afghanistan) have made the wider Black Sea area a key geographic transit point of reference whose relevance is magnified by the energy security question. Consequently, it is important to have a clearer understanding of the Black Sea region’s potential from the perspective of the regional and global actors. This is particularly true when assessing Turkey’s role. For the proponents of the geostrategic/ideological camp, it is important for Turkey to have a central role in the implementation of a EuroAtlantic strategy, while others would suggest
vs zero-sum politics that a Turkey committed to the collaborative approach makes more sense for the country itself and for the region as a whole. The third pole Another aspect of relevance is the emergence of a third pole — a European one with the European Union as its centerpiece — between the United States and Russia. The materialization of this additional element is due in part to the decline of the United States’ moral stature as the natural leader or spokesperson of the West. It is also due to a progressive convergence of views among the EU member states on how to deal with the Union’s neighborhood. In other words, with the accession of Romania and Bulgaria, two Black Sea littoral states, to the EU on January 1, 2007, the Union has become a Black Sea entity which is more than ever concerned with the prosperity, stability and security of its neighbors further afield. As a result, the EU is in the process of designing a new policy for the wider Black Sea area based on a regional approach which seeks to promote a shared regional identity. The aforementioned approach by the EU complements very well the collaborative methodology propounded by the BSEC, which seeks to promote cooperation in a wide range of policy areas, such as transport, energy, the environment, good governance,
trade and combating organized crime — all of which are, incidentally, EU priorities. Also, more importantly, the European Union has comprehensive relations with all BSEC member states as Greece, Romania and Bulgaria are also EU member states, Turkey has begun accession negotiations with the EU, Serbia and Albania have been granted the perspective of future membership, Russia has its own strategic partnership with the Union expressed via the Four Common Spaces policy, while Armenia, Azerbaijan, Georgia, Moldova and Ukraine all participate in the EU’s Neighborhood Policy. It should also be noted that ever since its foundation in 1992, the BSEC has constantly recognized the strategic importance of relations with the EU in its basic policy documents and the mutual overtures between the two organizations date back to 1997. European Neighborhood Policy Therefore, it should come as no surprise that much has occurred over the last few months in the wider Black Sea area, with the BSEC and the EU taking the lead in upgrading their relationship. The most telling examples of this enhanced interaction have been the adoption by the BSEC of a policy paper on ‘BSEC-EU Interaction: The BSEC Approach,’ the December 2006 Communication by the European Commission on ‘Strengthening the European Neighborhood Policy,’ the ongoing drafting of
a new communication on ‘A Black Sea Regional Approach,’ and the priority of the current German EU Presidency to further develop the European Neighborhood Policy and to expand the European area of security and stability in cooperation with the EU’s neighbors. What the bevy of activity between the BSEC and the EU suggests is a real possibility to minimize the dividing lines between the states in the wider region by moving away from zero-sum approaches in promoting national or bloc interests toward substantive cooperation in policy areas of equal importance to all stakeholders in the wider European space. This mobilization of efforts and resources requires streamlining the BSEC institutional framework to better cope with its increased tasks as well as a more serious effort by the organization’s member states to move beyond achieving the lowest common denominator and to pursue instead a more proactive approach toward enhancing the joint BSEC and EU role in regional affairs. In other words, the interplay between the BSEC and the EU provides for a new dynamic of regional cooperation in the wider Black Sea area and for overcoming the residual dilemmas posed by bloc politics. The challenge now is for all regional stakeholders to accept the merits of cooperation and adopt it in practice. Dr Dimitrios Triantaphyllou is directorgeneral at the International Center for Black Sea Studies (ICBSS), Athens, and assistant professor of international relations at the University of the Aegean. ICBSS website: www.icbss.gr University of the Aegean website: www.aegean.gr
cover story
Consolidate Sergei V. Lavrov interviewed by Vassiliki Nicoloulia
Sergei Viktorovich Lavrov, minister of foreign affairs of the Russian Federation since 2004, a career diplomat and former permanent representative of his country at the United Nations, with great experience in international economic relations, not only believes in the future of the Organization of the Black Sea Economic Cooperation (BSEC), but, due to its significant geostrategic importance, he considers the ‘Black Sea region as one of the most important European and Asian transport and energy hubs, an area of political transformation and intensive social processes as well as dynamic development.’ Furthermore, although he highly appreciates ‘Greece’s persistent endeavors since its chairmanship of the organization in 2005’ for the development of ‘BSECEU relations,’ he stresses that the BSEC-EU cooperation for the development of the BSEC region must not be exaggerated. Therefore, he proposes to set ‘realistic goals’ in order ‘to implement major regional projects jointly with the EU,’ mainly in the areas of transport and energy. Of utmost importance is his comment regarding the creation of ‘new and in particular superior structures over already available regional integration associations,’ since ‘this may lead to unjustified duplication, deviating from attaining real gains from the existing organizations.’ Such an effort has already been made by Romania, with the creation of the international organization Black Sea Forum on Dialogue and Partnership. It is also no coincidence that Greece and Turkey were strongly opposed to this parallel movement. Finally, the Russian minister does not hesitate to stress that ‘the best way to prosperity for the Black Sea region and its neighborhood lies in the concentration rather than scattering of efforts to intensify the already tested and proven mechanisms of the interstate cooperation. The BSEC is one of these basic mechanisms,’ an organization that must be further strengthened and consolidated.
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What are the main objectives of the Russian Federation with respect to the Organization of the Black Sea Economic Cooperation? What do you consider the main accomplishments of the Russian Chairmanship of the BSEC that ended on November 1, 2006? Let me remind that Russia is one of the founding BSEC member states. We have always believed that this organization makes a significant contribution to the strengthening of friendly and good-neighborly relations among its member states, facilitating the transformation of the Black Sea region into an area of peace, stability and dynamic economic growth. As for the accomplishments of the Russian Chairmanship, six months is a short period. Yet we are pleased to note that other BSEC member states highly appreciated our work. The Moscow Declaration adopted by the 15th Meeting of the BSEC Council of Ministers of Foreign Affairs states a significant intensification of the Black Sea regional cooperation. This cooperation has been taking on a more concrete shape and has led to a num-
BSEC’s identity ber of practical multilateral projects that will be the focus of the BSEC’s future activities. I hope that in a while the citizens of the Black Sea countries will be able to enjoy the benefits of the initiatives we have launched. I will mention just a few of them. Summarizing years of talks about a Black Sea transport corridor, Russian experts have initiated the drafting of a legal framework for coordinated development of the Black Sea Ring Highway. Common understanding has been reached in support of the possibility of resuming a regular passenger ferry line between Black Sea ports under the auspices of the BSEC. Furthermore, a Memorandum of Understanding on Multilateral Cooperation in the field of Postal Service has been signed and a draft Cooperation Agreement on Sanitary Protection of the territories of the BSEC member states has been prepared. Work on strengthening energy security of the region, creation of a common database and compatibility increase of the BSEC member states’ energy policies has begun. In our view, it is now essential to consolidate the emerging trend toward enhanced practical cooperation within the BSEC framework. This will depend to a large extent on the preparedness of our partners to take an active stance in respect to further specific steps on the Black Sea agenda.
In June the BSEC will celebrate its 15th anniversary. How do you envisage the role and the prospects of the organization in the future? It is common perception that making forecasts, especially in economics, is a thankless task. However, as regards the BSEC, I am absolutely positive that the relevance of this organization in the region will grow. The BSEC is the only structured and viable organization in the Black Sea region capable of providing coordinated intergovernmental support for multilateral economic cooperation. My contacts with colleagues during the Russian BSEC Chairmanship in 2006 have clearly shown that this view is shared by most BSEC member states. The German Presidency The German Presidency intends to establish a New European Neighborhood Policy for the Black Sea area. Do you consider enhanced relations between the BSEC and the EU as a crucial step at an international level and, if so, why? For all the importance of the BSEC-EU cooperation for the development of the BSEC region, I would not however exaggerate its role. What is really crucial for the BSEC is to embark upon the implementation within this organization of major multilateral cooperation programs and projects of great practical
importance for regional economies. We view the intensified BSEC-EU dialogue first of all as an opportunity to jointly and effectively implement large-scale projects. We highly appreciate Greece’s persistent endeavors since its chairmanship of the organization in 2005, with the mandate of all other participating countries, to develop BSEC-EU relations. It is essential to set realistic goals for such interaction. When working out instruments that would determine a basis for the BSEC-EU relationship, it would be expedient to reach a common vision of priority areas of economic cooperation within this system of relations. It will certainly be more efficient to implement major regional projects jointly with the EU. While taking into account the different levels of these associations, we should nevertheless acknowledge that it is precisely partnership cooperation that could both enhance the BSEC and increase the efficiency of the European Union’s policy in the Black Sea area.
How do you envisage this partnership cooperation could proceed? Development of bilateral relations between the EU and regional countries and intensification of effective cooperation with the BSEC represent two parallel processes. Meanwhile, we consider the latter as a mutually advantageous possibility for two equal partners to effectively tackle common tasks of ensuring the well-being of citizens, raising
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the standard of living and strengthening security and stability in the Black Sea region. We believe that there are good perspectives, for example, in such areas as transport and energy, since development of an appropriate infrastructure both in Western Europe and in the BSEC objectively requires close cooperation between both sides. The BSEC area has demonstrated its preparedness to cooperate on many occasions. We would really appreciate it if the European Union could make specific proposals in this regard, too. The projects Within this framework, which specific projects would you suggest for the broader Black Sea region? In my mind, the Black Sea Ring Highway feasibility study should become the first joint initiative in this respect. This job could be done within the Black Sea program for borderline cooperation of the European Neighborhood Partnership Instrument. To my knowledge, on the initiative of our Greek colleagues, this idea is being discussed within the above program and we support it. The BSEC supports the EU concept for the development of Motorways of the Sea. In the Black Sea it could be implemented through joint efforts. This certainly presupposes engagement in appropriate activities including participants’ resource provision, not only for the EU member countries that are also BSEC members, but also for other members of this regional organization. We see prospects for joint projects on establishing in the BSEC region efficient mechanisms for improvement of hydrocarbon
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transportation systems and interstate energy transportation systems as well as on the introduction of ‘clean energy’ technologies. Participation of the European Commission experts in meetings of BSEC specialized working groups, numbering today already 17, could contribute to identifying other areas of the BSEC-EU collaboration. On the whole, we proceed from the idea that in the process of equal and mutually advantageous cooperation with the European Union the BSEC should preserve and strengthen its own identity. Geopolitical importance What is the geopolitical importance of the region in your view? From the geopolitical angle, we regard the Black Sea region as one of the most important European and Asian transport and energy hubs, an area of political transformation and intensive social processes as well as dynamic development. I would like to underline that we don’t separate regional events from general processes and trends in global development. It is in our common interests to contribute to the Black Sea area being perceived in the world as a region of stability and development, a reliable and predictable partner on the way toward higher well-being and, simultaneously, in countering the threats and challenges of the 21st century. Incompleteness of the democratic changes, unsettled conflicts and leaning of the regional states toward different integration centers make it difficult to a certain degree to realize the full development potential of the Black Sea area. Objective economic interests, however, lead to the growing understanding of
prospective joint business initiatives, implementation of large-scale infrastructure, transport, environmental and other projects. Cooperation structures established in the region in the last few years — the BSEC, BLACKSEAFOR (Black Sea Naval Cooperation Task Group) — are designed to create favorable conditions for building up regional interaction in various areas.
What are the future prospects of the BSEC as an international economic organization? Russia is confident of the value of the BSEC as a fully independent, competent, regional organization with its own tasks, area of responsibility and a big potential to promote economic ties in the region. The time has come to take real steps to fully engage this potential. As for creating new and in particular superior structures over already available regional integration associations, we approach this idea very cautiously. This may lead to unjustified duplication, deviating from attaining real gain from the existing organizations. In our view, the best way to prosperity for the Black Sea region and its neighborhood lies in the concentration rather than scattering of efforts to intensify the already tested and proven mechanisms of the interstate cooperation. The BSEC is one of these basic mechanisms. We proceed from the assumption that both the BSEC member states and the BSEC observers need to continue their work to consolidate the BSEC. That is exactly the guideline Russia has been following and will follow. Ministry of Foreign Affairs of the Russian Federation website: www.mid.ru
AMC Albanian Mobile Communications (AMC) launched operations in 1996, making it the first mobile telephony company to operate in Albania. Today, its profitability ranks among the highest in Europe, while the company is the leading operator in the Albanian market in terms of market share. In February 2007, AMC’s subscribers exceeded 1 million, while in 2006 the company achieved one of the strongest subscriber additions (27%), mainly as a result of the company’s attractive commercial initiatives and the change of both its pre- and post-paid tariff policy to the benefit of the consumers. The company has been a subsidiary of COSMOTE since August 2000, when COSMO-HOLDING ALBANIA, COSMOTE’s 97% owned subsidiary, acquired 85% of AMC’s share capital. AMC has applied new attractive marketing initiatives, stimulating growth on all levels. COSMOTE’s Albanian subsidiary provides value-for-money telecommunications packages, which include flexible tariff packages, a full range of services for businesses and a wide range of added-value services. Today, the company’s telecommunications network offers 98% population and 85% geographical coverage. AMC continues to expand its coverage and network capacity, in order to meet the demands of its growing subscriber base. AMC, striving for continuous growth on all levels, meets the increasing demands of the local market, as well as international standards, and is constantly expanding and improving the range of its services, with new, competitive offerings. AMC’s advanced products and services are available through a wide commercial network throughout Albania.
In 2006, AMC:
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ñ Significantly increased its subscriber base, capturing some 64% of the market’s net new additions, thus maintaining its market leadership in Albania, as well as its profits. ñ Subscribers: 1,000,000 (as of February 2007) ñ Revenues: 151 million euros ñ EBITDA: 91 million euros ñ EBITDA margin: 60.3% ñ Net profit: 49.9 million euros ñ Net profit margin: 33%
The European approach In the immediate aftermath of the political changes that swept Eastern Europe post-1989, the countries of the region decided to establish the Organization of the Black Sea Economic Cooperation (BSEC) in June 1992. Well before any debate on regional ownership had started, the states of the wider Black Sea area took the task of cooperation into their own hands, acknowledging that in this new environment of challenges and opportunities the promotion of regional cooperation is a precondition for achieving prosperity and consolidating security. An important region There is no doubt that the wider Black Sea area, covering the region from the Balkan peninsula to the Caspian Sea, is of great geostrategic and economic importance for the European Union. In the past few years, its significance as a space of mutual economic and social interest has increased significantly. Its size as a market, the great development potential of the regional economies, and its role as an energy producer as well as an energy transit area underline its upgraded position on the international scene. The development of bilateral relations with all the countries of the region and the launching of the European Neighborhood Policy (ENP) have considerably strengthened the EU’s involvement in the area.
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By Yannis Valinakis
Moreover, with the accession of Bulgaria and Romania, the EU now reaches the shores of the Black Sea. We firmly believe that it is time for a more comprehensive and inclusive EU approach toward the Black Sea region. During the last years, Greece has been a firm promoter of the idea. In this context, the BSEC enjoys a number of advantages, such as its institutional strength and legal status. The Organization of the Black Sea Economic Cooperation is based on a binding agreement under international law and represents the most advanced form of regional cooperation in the area. It possesses a broad and comprehensive institutional basis. This is an institutional acquis worth preserving and taking advantage of. Greece’s role In its dual capacity as both a member of the EU and a founding member of the BSEC, Greece has worked intensively and in close cooperation with its partners to bring the two organizations closer. This was a principal goal of the BSEC’s Greek Chairmanship-in-office. As a result, in October 2005 in Komotini, northeastern Greece, the Council of Ministers of the BSEC adopted a resolution mandating Greece to proceed with explanatory consultations with the relevant EU institutions. In this framework, Greece has initiated contacts with all subsequent EU presidencies, aiming at achieving concrete results to the benefit of both the EU and the wider Black Sea area. Our goal is to set priorities for the whole region, making use of existing in-
stitutions in order to improve coordination between donors and other regional actors, and working toward maximum utilization of the resources at hand. Surging ahead Today we are glad to see that these efforts have already borne fruit. Both the European Commission and the current German Presidency are moving toward a greater and more comprehensive involvement of the EU in the region. The BSEC appears the most efficient channel for the promotion of this cooperation. Commitment We anticipate the formulation of a comprehensive EU regional policy toward the wider Black Sea area, including the enhancement of relations with the BSEC, based on a new forthcoming European Commission communication on cooperation in the Black Sea by spring 2007. Greece will spare no effort to cooperate with its partners for the realization of this aim, remaining firmly committed to the goal of enhancing cooperation and security in the region and anchoring it to the rest of the European continent. Yannis Valinakis is deputy minister for foreign affairs of the Hellenic Republic. Greek Ministry of Foreign Affairs website: www.mfa.gr
GLOBUL With a subscriber base of 3.3 million, a commercial network of over 760 shops countrywide — the biggest in Bulgaria — and a robust telecommunications network offering over 99.7% population and 96.8% geographical coverage, GLOBUL, COSMOTE’s Bulgarian subsidiary, keeps posting significant growth rates, despite the strong domestic competition. GLOBUL has been operating in the Bulgarian mobile market since September 2001, initially as a subsidiary of OTE. At the beginning of 2003, the management of the company was handed over to COSMOTE and by the end of the same year, the subscriber base of GLOBUL had reached 1 million. In April 2005, the company acquired a UMTS license to provide 3G services. In September of the same year, it acquired a license to offer fixed telephony services. In August 2005, COSMOTE acquired 100% of GLOBUL’s shares. After entering the COSMOTE Group, the company has made important investments in order to expand its commercial and upgrade its telecommunications network, enhance its products and services portfolio and fortify its brand name, investments that proved successful. Today GLOBUL is the leader in new subscriber additions, dynamically gaining momentum and market share. In September 2006, GLOBUL became the exclusive provider of the innovative i-mode services in the Bulgarian market, pioneering in the advanced services sector, while soon after the company introduced its first 3G services. COSMOTE’s subsidiary is consistently expanding the range of its i-mode services and continues to invest in the expansion of its 3G network. As in the other countries of joint presence, the COSMOTE-GERMANOS partnership is expected to play a decisive role in Bulgaria as well, for the successful implementation of GLOBUL’s marketing strategies, bringing the company closer to its customer base, attracting new subscribers and generating profit, thus improving its operating and financial performance.
In 2006, GLOBUL:
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ñ Continued its strong performance, delivering 25% revenue growth. Its subscriber base and market share increased significantly, despite the introduction of a third mobile player to the market. ñ During the fourth quarter, GLOBUL captured a record 389,379 net new additions, corresponding to over 50% of the total market net additions for the period. ñ Subscriber base: 3.3 million (enhanced by 36.6% vs 2005) ñ Market share c.40% ñ Revenues: 342.3 million euros ñ EBITDA: 126.3 million euros ñ EBITDA margin: 36.9% ñ Net profit: 32.4 million euros ñ Net profit margin: 9.5%
Time for a fresh start The 15th anniversary of the Black Sea Economic Cooperation (BSEC) Organization coincides with a growing awareness of the importance of the Black Sea region within the European Union. Following the accession of Bulgaria and Romania earlier this year, the EU now reaches the shores of the Black Sea and thus has an even greater interest in the stable and prosperous development of the region. The EU Commission has therefore pointed out in its recent communication on strengthening the European Neighborhood Policy (ENP) that an enhanced EU policy for the Black Sea region would offer new opportunities — both for the region and for the EU. The Black Sea region constitutes an important energy and transport corridor connecting Europe and Asia. As such, the region offers significant and as yet unexhausted potential for economic cooperation and growth. However, it also harbors considerable problems which likewise affect the EU: organized crime (trafficking in human beings and drugs), illegal migration, environmental problems, and the so-called frozen conflicts. The German Presidency Against this backdrop, the German EU Presidency has initiated a debate within the bloc on its future policy, goals and instruments for the region with the aim of developing a regional dimension within the ENP. This debate is still under way. But today it can already be said that an enhanced EU policy for
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By Dr Hans-Dieter Lucas
the Black Sea region aims to boost regional cooperation as well as relations between the EU and this area, encompassing the Black Sea littoral states as well as the eastern ENP countries of Armenia, Azerbaijan and Moldova. It is a positive sign that all these countries are displaying a heightened interest in deepening cooperation with the EU. Stronger EU engagement is an incentive for all Black Sea countries to participate more actively in regional affairs. More regional cooperation could create synergies and increase the efficiency of resources used, in particular in the sectors of transport, the environment, the fight against organized crime and illegal migration, border security and economic cooperation. Developing stronger regional ties at all levels will also help build confidence and reduce tensions. Thus, we also hope to create a positive environment for the solution of the frozen conflicts. The EU will continue its efforts to bring about such a solution. Consequently, stronger EU engagement with and in the region will contribute to regional stability and prosperity. The institutional structures An enhanced EU policy in the Black Sea region does not necessarily require new, heavy, institutional structures. The EU could
build on or further strengthen the existing programs and activities of its Black Sea neighbors. Targeted, practical cooperation and encouraging the countries to exercise ownership should remain key criteria for the development of the region. This implies an inclusive approach, giving all countries of the wider Black Sea region the opportunity to cooperate. In that respect, the BSEC could also play an important role. Germany, having had observer status in the BSEC since 1999, appreciates the organization’s intention to intensify cooperation within the Black Sea region as well as with the EU. However, regional cooperation should not be limited to the intergovernmental level. It should also involve sub-state players such as regional and local administrations, as well as civil society and the private sector. In developing its policy toward the Black Sea region, the EU could build on positive experiences in the context of the Northern Dimension and Baltic Sea regional cooperation. The time has come for a fresh start in the relationship between the EU and the Black Sea region. Both the EU and the countries of the region should grasp this opportunity with courage and determination. Dr Hans-Dieter Lucas is special envoy for Eastern Europe, Central Asia and the Caucasus of the Federal Foreign Office, Federal Republic of Germany. Federal Foreign Office website: www.auswaertiges-amt.de
COSMOTE ROMANIA
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A pioneering and fast-growing company in the Romanian market, COSMOTE Romania launched operations in December 2005, following COSMOTE’s acquisition of a 70% stake in the company’s share capital. Embracing the vision, know-how and corporate values of its mother company, COSMOTE Romania’s strategic aim was to make mobile telephony accessible to all Romanians and, by focusing on its products portfolio, its distribution and telecommunications network, as well as its competitive tariffs, to attract a significant market share. To this end, the company adopted an aggressive marketing policy toward all market segments. Today, COSMOTE Romania has a large commercial network, comprising more than 650 stores, and offers some of the most competitive packages in the Romanian market, with attractive tariffs and unique packages for voicemail and SMS services. Furthermore, responding to the consumers’ need for value-for-money communication, the company has introduced a flat and clear-cut tariff policy, which focuses on the basic voice services and provides common tariffs for call-to-all networks, together with its competitive tariffs for on-net communication. COSMOTE Romania focuses on the constant upgrade of its telecommunications network, currently offering wide and effective coverage that reaches 95% of the population. As of April 2007, COSMOTE has reached 2,000,000 customers in Romania, attracting 1 million new subscribers in a four-month period, demonstrating the effectiveness of the company’s strategy and indicating Romanians’ growing preference for and trust in the COSMOTE brand. In December 2006, COSMOTE Romania introduced special packages for businesses, a segment the company will be focusing on increasingly in the future. The company’s immediate plans in 2007 include the introduction of i-mode for both individual and business customers, continuously improving the quality of its coverage and services. In 2007, the company plans to continue its investment in building its brand, offering innovative and competitive services, and attracting an increasing number of users. The company will capitalize on the acquisition of GERMANOS, which will further enhance its subscriber reach and accelerate its targets to gain market momentum and share.
Forging a common Three factors have come together to create this new interest in and recognition of the importance of the wider Black Sea region. The original impetus for such a strategy came from those who argued that a recipe of democratic integration and collective security, offered through closer relations and eventual integration with NATO and the EU, could help transform and bring peace and stability to this region just like they did to Western Europe in the early post-World War II period and to Central and Eastern Europe after the end of the Cold War. In short, the so-called ‘Big Bang’ wave of enlargement in 2002 and the Rose and Orange revolutions combined to catalyze a new debate within the Western strategic community. Next, the issue was raised as to whether the West should not strive for a possible third wave of Euro-Atlantic enlargement extending from Kiev to Tbilisi, a bold move that would again redraw the map of Europe by anchoring Western values deep into Eurasia as well as the wider Black Sea region. While the recent setback to political and economic reform in Ukraine has tempered it, that vision and question remain on the strategic agenda. Post-9/11 A second factor enhancing Western awareness of the importance of this region is developments in the wider Middle East. Following the events of September 11, 2001, the strategic attention of the West has shifted in a profound and, in all likelihood, en-
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By Dr Ronald D. Asmus
during way. The combination of locking instability in Europe plus the growing awareness that a locus of new threats was emanating from the wider Middle East led us to see the region through a new prism. What once seemed to be marginal or on the periphery of Europe now seems much closer and central. In a sense, the wider Black Sea region is the linchpin between core Europe and the wider Middle East. This highlighted the desirability or need to anchor this region to the West and ensure its stability as part of a broader strategy of shoring up the southern rim of the Euro-Atlantic community. Energy security The third factor that has helped put the wider Black Sea issue on the agenda is, of course, energy security. The wider Black Sea region is a key transit route for energy in general, and gas in particular, from the Caspian to European markets. It is especially
key to ensuring a diversity of future energy suppliers. This region will only grow in importance as a transit route in the years and decades to come as Europe seeks to diversify suppliers and mitigate the consequences of Russia’s monopolistic energy power. Russia will, of course, continue to be Europe’s main supplier of energy, but if the EU is to avoid an unhealthy degree of dependence and if European consumers are to be protected from the consequences of monopolistic practices, then the countries of the EU will have to turn to the wider Black Sea region for alternative pipelines and energy corridors. Regional weaknesses If these three factors are pushing the United States and Europe to recognize the growing importance of the wider Black Sea region and the need for a more coherent and comprehensive strategy, then there are also three main hurdles that have thus far prevented such a strategy from coming together in a meaningful way. The first hurdle lies in the region itself and its weakness. Simply put, these countries are weaker and less well known than their counterparts in Central and Eastern Europe were when they opted to go West in the early 1990s. They have not developed a sense of common re-
Euro-Atlantic strategy gional purpose and cooperation. They suffer from a set of frozen conflicts that inhibit reform at home, absorb energy and resources and make Western leaders and policymakers think twice about embracing them lest they, too, be drawn into these conflicts. Even the most avid supporters of anchoring these countries to the West must admit that the path is steeper and stonier than it was for Central and Eastern Europe. EU enlargement fatigue The second hurdle lies in the current weakness of the West and our reluctance to embrace these countries. Politically and economically, both sides of the Atlantic are looking inward at the moment. The sense of EU enlargement fatigue is becoming a real political force in many member states. If the enlargement argument was difficult in the 1990s with Central and Eastern Europe, it is qualitatively harder today after the failed constitutional referenda in France and the Netherlands and the re-emergence of the debate on the EU’s ‘absorptive capacity.’ Instead of a sense of solidarity with these countries, there are growing calls for the European Union to close the door on enlargement by defining once and for all the borders of the EU. While Europe is clearly di-
vided on this issue, there is a growing and powerful sense that the enlargement of the 1990s has overextended and overtaxed existing institutional arrangements in the EU, that a pause is needed to consolidate and digest new members, and that further enlargement must be halted pending a strengthening and sorting out of the EU’s internal constitution. Historical and cultural connections to Kiev or Tbilisi, let alone Baku, are also simply more distant to Americans and Europeans. Historically, some of these countries are in some ways part of the cradle of what we today think of as European civilization. But in many ways they disappeared from our mental map of Europe when they were absorbed into imperial Russia and then disappeared behind the Iron Curtain. If during the 1990s our understanding of ‘Europe’ was de facto stretched from Western Europe to again include Europe’s Eastern half and former communist world, is it possible for it to expand one more time deeper into the post-Soviet space and to embrace these ancient cultures, civilizations and past periods of our own history?
Treading carefully with Moscow The third hurdle is Russia: Moscow’s drift back to authoritarianism coupled with its growing energy clout. There is widespread recognition in the West that our policies of the past decade vis-a-vis Moscow have failed to achieve our own Western objectives and thus need to be rethought. However, the debate on how to do so has not yet taken place and there is little consensus on how to do so. This confusion and lack of consensus on what to do about Russia sets the backdrop for the reticence and lack of clarity on how to deal with Moscow on issues in the wider Black Sea region. There are fears that a strategy to anchor countries in the wider Black Sea region to the West could provoke an unwanted confrontation with Moscow. Given this backdrop, is it realistic to think that the US and Europe could come up with a common Euro-Atlantic strategy for the wider Black Sea region? What could be considered the key building blocks for such a strategy? In terms of rationale, such a strategy would make the case for why this region matters and needs to be anchored to the West, while fudging the issue of whether the long-term goal is simply a much closer relationship or actual membership in institutions like the EU and NATO. Such a compromise should satisfy
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both proponents and opponents of enlargement in the West. The former will argue that this is a first step in the direction of eventual membership. Opponents, on the other hand, will insist that no commitments on enlargement have been made. EU members would agree to disagree and try to keep the door open, even if only in an ambiguous sense, until a future time when the stars for further enlargement may come into better alignment through a combination of successful internal EU reform, economic growth and political self-confidence. This makes it all the more critical that the door for NATO membership stays open and that the alliance reaches out and engages the countries of the region. The strategic rationale In addition to developing the strategic rationale and finding a compromise on what it means to anchor these countries to the West, there is a need to build the political coalition across the Atlantic that will make the creation of such an outreach strategy in the EU and NATO a top priority. In the 1990s there was a US-German understanding on what needed to be done. Today, Germany is again a key European actor in designing a future strategy toward the wider Black Sea region. German support for such a strategy is necessary, but not sufficient. That core group of forward-leaning countries would ideally
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include the United Kingdom as well and, eventually, France. Many Central and Eastern European countries are likely to be open to such a strategy, especially countries like Bulgaria and Romania, which border on the Black Sea. One could also expect Poland with its own Black Sea tradition to be supportive. Equally important, it would have to include Turkey at its core. Turkey has a key role in the region and would inevitably have to have a central role in such a strategy. Thus far, Turkish policymakers have expressed considerable ambivalence about such a strategy. Turkey has gone from being a cheerleader for expanded Western engagement in the region to its current position as a skeptic. A common way forward with Ankara should be possible if it is built around several key elements. Ankara’s Western allies would also have to commit to further expand regional full cooperation, taking full advantage of the underutilized potential of the Black Sea Economic Cooperation and other existing regional initiatives. Washington, Brussels and Ankara would need to work together to diversify energy supplies, developing a strategy that takes advantage of Turkey’s geographical position. And, last but not least, Ankara, Washington and Brussels would need to
agree on a strategy on Moscow. That agreement would make clear that a Euro-Atlantic strategy toward the region would be flanked by a desire to work together with Moscow where possible, but that we will not allow Russia to have a veto over Western policy initiatives or actions. NATO’s role… NATO clearly must be a key element in any wider Euro-Atlantic Black Sea strategy. There are very real security issues and conflicts in the region that need to be addressed and whose resolution would help support democratic transformation and reform. In many ways, this region is a textbook case for the classic theory of NATO enlargement and the premise that extending a security umbrella over the region and the filling in of a security vacuum can help consolidate positive democratic change. If this was true for Central and Eastern Europe in the 1990s, it is potentially even more valid for these countries today. In some ways NATO today is much better equipped to reach out to this region than it was a decade ago. It has many more modern and flexible partnership tools that can be applied and used to do much more in the region. The missing ingredient today is political will, not NATO tools or know-how.
…And that of the EU There is a tremendous appetite in the region for a greater EU role. Enlargement fatigue notwithstanding, there are very real pressures likely to push the EU over time toward increased engagement in the region. Energy security issues are moving to the fore. The Middle East is becoming more important. The need to try to resolve the region’s frozen conflicts before they heat up again is slowly being recognized. At the end of the day, the region is simply too close to the EU’s own borders, is too important in terms of energy security and has too many problems as well as European aspirations for the EU to ignore. The accession of Bulgaria and Romania will be an important step in making the EU a Black Sea power. And, as the EU’s dialogue with Turkey deepens, it will increasingly become more engaged in and committed to the region as well. For the near future, the emphasis therefore has to be on stepping up practical EU assistance and support while steering clear of the larger debates that are only likely to paralyze the EU. It will be necessary to concentrate, below the highest political levels, on ways to beef up EU engagement and support without triggering the political anxieties that lie below the surface in some member states. Ideally it would be best to take and further develop or tailor existing EU
tools and mechanisms. This is exactly the direction that many forward-looking EU thinkers are pursuing. In practical terms, this means working toward a policy that de facto helps to anchor these countries to European structures, while leaving the EU membership question open for the future. Convincing Russia The final building block has to be a strategy to deal with Russia. The key to a future Western strategy is to continue to remind ourselves that the goals of this strategy are to build security and stability in the region through democratic integration and collective security and closer ties with the EU and NATO. This strategy is not anti-Russian and is designed to build the kind of stability in the region from which Moscow, too, will eventually benefit. This is true even if Moscow today does not necessarily view it in these terms. EU and NATO enlargement in Central and Eastern Europe have arguably
created the greatest amount of stability and security on Russia’s western border since the days of Napoleon. But that did not prevent Moscow from opposing this policy or viewing it as hostile. The core problem we face is that Russia today still defines positive democratic transformation in the wider Black Sea region as anti-Russian and inimical to its national interest. Such a stance is shortsighted, but it is a reality. Western policy must stick to its integrationist principles and logic and not succumb to the kind of zero-sum geopolitical thinking that so often permeates Russian thinking. As in the 1990s, it will therefore be necessary for the West to decide for itself which Russian interests in the region it considers to be legitimate and which are not and therefore will not be taken into account. And we have to work hard to pull Moscow over to our way of thinking. It will also be necessary to establish much greater Western cohesion and unity in order to acquire a stronger negotiating position and leverage vis-a-vis Russia. One has to assume that Moscow will seek to deter and divide the West on these
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issues if it can. It will do so by threatening both the region and us with various ‘consequences’ if we move forward with such a strategy, as it did in the early and mid1990s in Central and Eastern Europe. If there is one lesson that can be drawn from that experience, it is that Moscow will seek to prevent the West from moving forward by playing divide and conquer as long as it thinks we have not made up our mind. And Moscow will only come to the table and enter a real dialogue on managing the consequences of greater Western engagement in the region if it concludes that we are prepared to move forward in spite of its views. Frozen conflicts A strategy to resolve the region’s frozen conflicts must be at the heart of a new EuroAtlantic strategy for the region. There is a growing sense of frustration in the region, often mixed with pessimism, that current diplomatic formats and efforts are not producing progress and that a rethink of current approaches may be necessary. Part of that rethink centers on the role of Russia. Another centers on whether regional leaders have the political legitimacy and will to
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build public support for the difficult decisions required to resolve these conflicts. More generally, we are witnessing a new policy debate over whether democracy is part of the problem or the solution in these conflicts. For all too long, Western diplomacy implicitly assumed that our goal should be to get the authoritarian leaders of the region to reach a diplomatic settlement, have the outside world affirm such a deal and, if needed, help impose a solution. The risks and shortcomings of such an approach are becoming steadily clear as leaders with uncertain legitimacy shy away from those decisions. Instead, there are new attempts to come up with alternative strategies that seek to use democracy, demilitarization and decriminalization to transform these conflicts and make them more amenable to resolution. Time to commit The strategy called for here would require a decade of sustained political and diplomatic effort to consolidate, and in some cases to initiate democratic reform in the region; to
resolve the existing frozen conflicts in a peaceful fashion; and to place the countries of the region on a positive historical trajectory by more firmly anchoring them to the Euro-Atlantic community. For this strategy to succeed, the United States and Europe would also be required to make such a sustained effort at a time when there are also other pressing international priorities in the Middle East and Asia, as well as in the global war against terrorism. Is it worth it? This author’s answer is yes. The stakes for the West in the region are high and the costs of renewed instability potentially too great for us not to try. If we do not act now and lock in stability, while we can and while we can do so with modest effort, one wonders if we are not running the risk that this area will become destabilized in the years ahead and we will have to intervene later and in a more costly and less effective fashion.
Dr Ronald D. Asmus is executive director of the Transatlantic Center of the German Marshall Fund (GMF) of the United States. He has also served as deputy assistant secretary of state for European affairs in the Clinton administration (1997-2000). The author of many books, he is also the editor of, among others, Next Steps in Forging a Euroatlantic Strategy for the Wider Black Sea (GMF, 2006), which can be downloaded from the GMF website at www.gmfus.org/publications/article.cfm?id=234). GMF website: www.gmfus.org
( At odds with the United States over Iraq, estranged from the European Union, and just about to hold critical presidential and parliamentary elections, Turkey has legitimate reservations about the Euro-Atlantic strategy toward the Black Sea region. While Turkey is preparing to give a new boost to the Organization of the Black Sea Economic Cooperation (BSEC) during its presidency, echoes of Cold War rhetoric are resounding around the Black Sea Basin. Between May 1 and October 31, 2007, Turkey will take over the BSEC Presidency. The tenure marks the 15th anniversary of the organization and coincides with contentious debates and power struggles over the future of the region. After the demise of the Soviet Union, the 1990s were years of Euro-Atlantic neglect toward the Black Sea region. The area was far from being a priority on the EuroAtlantic agenda. While the ‘Russia First’ policy, aiming to tame Russia, had been at the top of the US foreign policy agenda, the Europeans were overwhelmingly preoccupied with their new ex-communist neighbors and the Balkan wars. Ozal’s vision Following the disintegration of the Soviet Union, Turgut Ozal, then president of Turkey, envisaged creating an economic cooperation zone in the Black Sea region. Ozal intended Turkey to be a role model for the former Soviet states and newly independ-
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( ( ( Echoes of By Professor Mustafa Aydin
ent republics of the time in order to strengthen its status as a regional leader. His ardent efforts were embodied in the BSEC, set up with the Bosporus Declaration in 1992 and transformed into a treatybased regional economic organization after the adoption of its charter in 1998. With its heterogeneous composition of member states, the BSEC has been a rather unique case as a regional organization for various reasons. First, the BSEC was one of the earliest initiatives intended to establish cooperation between NATO members (Greece and Turkey) and former members of the Warsaw Pact. Secondly, there were still ongoing border disputes (for example between Armenia and Azerbaijan) and historic grievances between the members (such as between Turkey and Greece, Greece and Albania, Moldova and Russia, Armenia and Azerbaijan) during the establishment of the BSEC.
Dark shadows After an enthusiastic start, the BSEC lacked the political will needed to create a spirit of genuine regional cooperation in the Black Sea; Ozal’s vision was never fully realized. From the late 1990s onward, instead of regional economic cooperation, armed conflicts marked the Black Sea region. The TransDniester problem in Moldova, the NagornoKarabakh conflict between Armenia and Azerbaijan, the Chechen issue in Russia, and the Abkhaz and South Ossetian problems in Georgia have overshadowed any regional economic cooperation prospect in the Black Sea region. Since the BSEC was, and still is, not entrusted with a political role, let alone a peacemaking and/or peacekeeping mission, it lacks the necessary institutions for proactive diplomacy and cannot enter the picture as a capable regional actor in such an overly securitized Black Sea region. Out of the ashes The area regained strategic significance when the Euro-Atlantic threat perception dramatically shifted after 9/11 (New York, Washington) and 3/11 (Madrid) terrorist attacks. The region began to be perceived, especially by the US, as the back door to the so-called Greater Middle East. The USA’s heightened attention to the region increased after Romania and Bulgaria
Ozal’s vision became NATO members in April 2004 and its position was disseminated through a number of US-sponsored projects and proposals by semi-academic local and international institutions. According to these proposals, which were locally promoted by Romania and supported unquestioningly by Bulgaria, Georgia and, to a lesser extent, Ukraine, the US seemed determined to extend its influence to the shores of the Black Sea. Various former Soviet states along the northern and eastern shores of the Black Sea (Moldova, Ukraine, Georgia, Armenia and Azerbaijan) became strategically important to the US for securing the EuroAsian (or East-West) Energy Corridor linking the energy-hungry Euro-Atlantic system with the producers of the Caspian Basin. Thus, the new security perceptions and energy politics of the US led the EuroAtlantic community to support the ‘colored revolutions’ around Russia. Opposition & squabbles Turkey’s reservations about the USA’s longterm objectives in the Black Sea region became apparent when controversies erupted over suggestions to expand NATO’s Operation Active Endeavor (OAE) activities to the
Black Sea in the first months of 2006. Turkey and Russia jointly opposed the expansion of the OAE, though they differed in motives and reasoning. Russia’s opposition to Active Endeavor’s entry into the Black Sea was clear-cut: Moscow was loath to see any expansion of US influence in its neighborhood. Turkey’s opposition, on the other hand, has been driven by its concern to preserve the current legal regime of the Turkish Straits established under the Montreux Convention of 1936 and political and military balances that have emerged in the region since the end of the Cold War, which, for the first time in history, allowed the emergence of multilayered, multidimensional and multilateral cooperation schemes in the region. The BSEC was inevitably affected by the widening rift between the Euro-Atlantic policy and Russia’s position toward the region. Although later granted, the BSEC, under Russian opposition, delayed the consideration of the US application for observer status in March 2006. While former Warsaw Pact members of the BSEC issued a statement declaring their regret about the US exclusion, NATO members Greece and Turkey kept silent. Although much controversy and dissent within the transatlantic community
over the Black Sea was mollified over the course of 2006 through greater emphasis on the EU’s role in the region and the USA’s eventual encouragement of regional partners to join the Turkish-proposed Operation Black Sea Harmony, the equivalent of OAE in the Black Sea, the squabbles of the last few years have left a bad aftertaste. Caution & balance Against this politically tense background, Turkey is now preparing the agenda for its BSEC Presidency, aiming to reinvigorate the organization. Although Turkey’s main aspiration for the region seems to be to develop a more inclusive and comprehensive EU approach toward the Black Sea, it will probably end up pursuing a policy of caution and balance in order to avoid a direct confrontation with either the US or Russia, as well as some of the regional countries that do not wish to see an expansion of responsibilities of the BSEC to political and/or security domains. Professor Mustafa Aydin is director of the International Policy Research Institute. He is also chairman of the International Relations Department at the University of Economics and Technology (TOBB-ETU), Ankara. TOBB-ETU International Relations Department website: www.uib.etu.edu.tr
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Kiev’s primary interests The Black Sea region is without a doubt one of the richest areas in the world, with a wealth of vital natural, recreational and infrastructure resources. Transportation and communications routes are of the greatest importance for Ukraine, and with access to the straits of the Bosporus and the Dardanelles, as well as a large number of ports and other key cities, the Black Sea is an important transportation artery which links Ukraine with the world’s major sources of raw materials and international markets. The geopolitical and geostrategic significance of this region lies in its location on the crossroads of the vertical axis of transportation and communications routes between the countries of Northern Europe and the Mediterranean and the Middle East, as well as on the crossroads of the horizontal axis, which joins two geopolitical centers of the world, where East meets West, Europe and Asia. Development & diversification The Organization of the Black Sea Economic Cooperation (BSEC) can serve as an alternative means to solve problems which Ukraine is facing in the post-Soviet area. Kiev’s primary interests in this area include: — Diversification of supply sources for energy resources; — Development of Ukraine’s transit potential in the supply of energy carriers to Europe; — Diversification of outlets for Ukrainian
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By Professor Grigoriy Perepelytsia
agricultural products; — Development of transport corridors in the directions north-south, EuropeRussia, Europe-Asia; — Attracting investments from countries of the Black Sea region for the modernization of the Ukrainian economy; — Development of recreational centers and the tourism industry. Ukraine looks to the BSEC for assistance in the realization of all the abovementioned interests. It must also be stressed that Ukraine has supported the creation of the BSEC from the very beginning and is one of the organization’s founder countries. Therefore, Ukraine sees its own participation in the BSEC, an economic cooperation organization, through these six groups of primary economic interest for Kiev. Accordingly, it will also support the economic projects of the BSEC.
The Black Sea & the world economy The BSEC’s creation was aimed at the integration of the Black Sea region into the world economy on a democratic basis and taking into account market principles. During its years of existence the BSEC has displayed positive dynamics of development. The organization has already gained international legal status, so its decisions have an obligatory character, and its executive branch with its different components can now be considered well developed. The BSEC today is an organization that potentially possesses all the tools and resources necessary to substantially influence those processes which are taking place in the Black Sea region. In spite of its economic focus in the last few years, the BSEC has also created new channels of activities, in particular projects concerning the fight against ‘soft threats’ like prevention of terrorism and the battle against illegal migration and trafficking in drugs and people. In this way we have expanded the BSEC’s mandate regarding a wide spectrum of humanitarian issues and as a consequence
the organization has attained a certain degree of influence. Among the positive factors of economic cooperation within the framework of the organization it is also useful to take into account the specializations of the participating countries and the tendency of their economies toward import substitution, which pulls them in separate directions. Conflicting priorities However, it is clear that the potential possibilities are not exploited in full for different reasons. The BSEC not only has positive dynamics of development, but it also faces objective difficulties. The main problem is the large variety of the BSEC member countries’ sometimes conflicting priorities, a fact that complicates the coordination of BSEC members’ efforts to realize common projects. The achievements of participating countries’ cooperation in the spheres of creating a regional market and establishing cooperation in investment activity provide hope for the future. However, we are still not in the position to say that the regional market is functioning as well as we wish it would. Trade between the regional states has not yet developed to an optimal level. The Ukrainian project concerning a multilateral agreement on the offshore trade regime, including a customs policy
of gradually removing obstacles to trade, was not supported. This example illustrates that the states of the region are trying to maintain their positions in already existing customs unions and are in no hurry to develop complex trade and economic ties in the region. The investment cooperation of the BSEC countries is also in an embryonic stage at present. Energy systems Strategically important transport projects, which foresee the unification of regional countries’ energy systems into one ring and the establishment of a system of power carriers’ traffic, are already being developed within the BSEC framework. These projects will assist in the development of cooperation between the new economic groups of the states of Europe and Asia (EU, Central European Initiative, Organization for Security and Cooperation in Europe, OEU).
The BSEC & the EU At the end of 2006 a memorandum of understanding was signed between the BSEC and the Eurasian Economic Community (EurAsEU). Similar memoranda were signed with the World Bank and specialized UN institutions. Important developments are also in sight thanks to European Union plans for the Black Sea region that are expected to be similar to the already existent strategies for the Baltic or the Mediterranean. Regional security Finally, the OSCE should become the main organization for the BSEC where regional security is concerned. The BSEC countries should concentrate their efforts in the sphere of regional security in areas such as: economic security; humanitarian contacts; the fight against organized crime, the illegal trade in drugs, weapons and radioactive materials; illegal migration; the fight against marine piracy and smuggling; the provision of security for economic activity in the Black Sea and security of transport communications; and the distribution of democratic values.
Professor Grigoriy Perepelytsia is director of the Institute for Foreign Policy (Ministry of Foreign Affairs and Diplomatic Academy), Ukraine. Ukrainian Ministry of Foreign Affairs website: www.kmu.gov.ua
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The Russian factor: Cooperation vs competition The Black Sea region is one of the most strategically important areas in Europe, providing a trade link and transit routes for Caspian energy supplies. It forms the core of the vast area that extends from Europe to Central Asia and the Middle East and it is closely related to unstable Balkan, Caucasus and Caspian regions characterized by common risks and challenges, first and foremost frozen conflicts and international terrorism. It wouldn’t be an exaggeration to say that the Black Sea region remains one of the most problematic parts of Europe due to its cultural and political heterogeneity, the bipolar legacy, and the differing interests of the regional and non-regional actors embodied in a multiplicity of external policies. The region is represented in different international institutions and security arrangements — the Organization for Security and Cooperation in Europe, the European Union, NATO and the Commonwealth of Independent States (CIS). The Black Sea countries have rarely experienced security, democracy and prosperity. They still face numerous problems including state reconstruction and/or consolidation, conflict resolution, democratization, economic underdevelopment and energy security.1 The end of bipolarity and the removal of ideological differences between the East and the West opened new windows of opportunity for the Newly Independent States and the region at large. 1. Iris Kempe, Kurt Klotzle, The Balkans and the Black Sea Region: Problems, Potentials and Policy Options, CAP, Policy Analysis No 2, April 2006, p 6.
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By Dr Nadia Alexandrova-Arbatova
Globalization & integration The Black Sea Economic Cooperation (BSEC) can be viewed as one of these windows of opportunity for the countries of the region. Established in 1992 to promote trade and economic cooperation among the Black Sea states, it later expanded its interests and activities to security in the region. It is a product of globalization and integration at the regional level aimed at making the Black Sea region an area of peace, cooperation and prosperity. This aim, however, is not an easy one, taking into account the lack of homogeneity, implementation mechanisms, resources, international visibility, and a clear vision of priorities2. Half of the BSEC countries came out of the USSR and have troubled relations with Russia or between one another (Armenia and Azerbaijan, for instance). 2. Yannis Valinakis, The Black Sea Region: Challenges and Opportunities for Europe, ISS Chaillot Papers, 36, July, 1999, p ix.
Russia’s national interests The Black Sea region constitutes a most crucial area in Russian foreign policy due to its geopolitical and geo-economic importance and specific Russian interests during the period of systemic transformation after the collapse of the USSR. It is marked by a string of destabilizing factors such as ‘Chechenization’ of the North Caucasus, frozen conflicts in the Transcaucasus, strained relations between Russia and the countries of Georgia, Ukraine, Azerbaijan and Moldova, and rivalry over transit routes for Caspian oil. Thus, from a Russian viewpoint, the Black Sea is the focus of many vital concerns that will affect not only regional but international stability if not handled properly. Russia’s interests in the region can be defined as follows: First, to retain Russia’s positions in the region as one of the main actors, given the emergence of new strong regional (Turkey) and external (the USA) actors. After the collapse of the USSR, both Turkish and US policies have been heavily dominated by the goals to undercut Russia’s positions in the region, the CIS space included. In addition, Turkey has been supported
by the US as a balancing factor in the Caspian-Black Sea region against the influence of Russia and Iran. Second, to counter and suppress extremism, separatism and terrorism. Evolving problems in the North Caucasus between the autonomous Russian republics (not only Chechnya, but also Karachay-Cherkessia, Kabardino-Balkaria, North Ossetia, Ingushetia etc) and growing religious pressures (from the Wahhabis, among other groups) make this area as or perhaps more important to Russia than the CIS in terms of interests and stability. Given regional interdependence, Russia is interested in security and stability in the wider Black Sea region. Third, to ensure uninterrupted and secure energy, trade, civil and military communications within and throughout the Black Sea and the straits to the Aegean. Ankara’s threats to reduce the volume of Russia’s oil tanker traffic through the Black Sea straits as well the competition for
pipeline routes out of the oil-rich Caspian Sea Basin have been seen by Moscow as a challenge to its interests in the region. The signing in Athens of a long-delayed Balkan oil pipeline agreement will ensure the flow of cheaper Russian crude to the Mediterranean. The pipeline between the Bulgarian Black Sea port of Burgas and the Greek Aegean Sea port of Alexandroupolis, estimated to cost about US$1 billion, will speed up oil transportation by bypassing the congested Bosporus, where tanker delays are costing oil companies nearly $1 billion a year. Fourth, to prevent new dividing lines from appearing in the region and the expansion of military coalitions which do not include Russia as a full member. The absence of strategic goals in Russia’s relations with NATO and EU, given their policy of eastward enlargement, has inevitably strengthened and continues to strengthen the ‘great power’ sentiments of the Russian political elite, as well as its fears of the Western strategy of squeezing Moscow out of the zone of its vital interests — the CIS. The enlargement of the EU, initially perceived as an objective process in the development of a post-bipolar Europe,
is increasingly seen by many in Russia as a source of new challenges in connection with rivalries in the post-Soviet space. Furthermore, the enlargements of the EU and NATO to the east have traditionally been presented by Brussels as mutually complementary processes. And although NATO membership as an obligatory condition of EU membership is not written into the Copenhagen Criteria, the latest enlargement of the European Union to the postcommunist countries of Central Europe attests that it has become a de facto obligatory condition. First, these countries become part of the Western security system and only afterward can they count on EU membership. When applied to the CIS, this practice creates serious problems in relations with Russia and is sure to increase confrontational trends in Europe. In other words, the proclaimed principle of mutual complementarity of the enlargements of
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the EU and NATO is obviously and dangerously at odds with Russia’s interests in the post-Soviet space. Russia in the BSEC The BSEC was established at a time when Russia was trying to find its place in postbipolar international relations and to reinstate its positions in the CIS. Looking back, one cannot but recognize that Russia has not found its proper place in the Euro-Atlantic space and has failed to formulate a viable strategy in the CIS. Undoubtedly, the BSEC structure cannot resolve all disagreements between Russia, the NIS and external actors, but it does present a favorable environment for transforming competition into cooperation by developing concrete regional projects. Russia has taken an active part in the activities of the Black Sea Economic Cooperation Organization, consistently pursuing the goal of increasing the effectiveness and practical dividends of its work in line with the fundamental documents adopted by the BSEC, including the BSEC Economic Agenda for the Future (2001), the Baku Declaration on Energy Cooperation in the BSEC Region (2003), the Alexandroupolis Declaration on Energy Cooperation in the BSEC Region (2005) and others. Over the
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BSEC’s 15 years of functioning, Russia has become more active in the efforts of the organization’s working groups on information technology and communications, transport, trade and economic cooperation, emergencies, the power industry and financial matters. During Russia’s BSEC Presidency in 2001 and 2006, the country supported projects directed at promoting sustainable transport systems, including multimodal transport systems in the BSEC member states to help reduce regional disparities and to connect the BSEC region’s transport infrastructure to the European and Asia transport infrastructure networks (possibility of international use of the Volga-Don Navigation Channel as an element of connection of transport networks of the Caspian and BSEC regions; organization of 7,000-kilometer ring road around the Black Sea and another to coordinate a network of links and cooperation between ports on the Black Sea, the Caspian and the Mediterranean). Russia & the EU The BSEC can be seen as a potential positive influence in regional cooperation. However, to play a serious role, the BSEC must be adapted to the new regional and global realities and dynamics — first and foremost the growing role of the EU in the region. Given the importance of the EU for the countries of the region, Brussels should
provide a well-thought-out strategy vis-avis the BSEC. The EU countries, many of which are also members of NATO, should not depart in their relations with Russia from their fundamental principles applied with regard to other countries, notably Turkey. The principle is that the integration of new members in the processes of building Europe is a necessary condition for democratization and the spread of European norms and values to these countries. The regional cooperation won’t flourish if the EU doesn’t define a clear strategy vis-a-vis its neighbors. The European Neighborhood Policy can be assessed as a temporary solution. Sooner or later the EU will have to decide on its external borders. With regard to Russia, the fundamental question is the post-Partnership and Cooperation Agreements with the EU, which could provide EU-Russia relations with new strategic goals and promote partnership on all levels, the Black Sea region included. Dr Nadia Alexandrova-Arbatova is head of the Department of European Politics, Institute of World Economy and International Relations, Russian Academy of Sciences. Institute of World Economy and International Relations website: www.nira.go.jp/ice/nwdtt/ 2005/DAT/1271.html Russian Academy of Sciences website: www.ras.ru/
An emerging economic regional power In 2007, the Organization of the Black Sea Economic Cooperation (BSEC) is marking its 15th anniversary in a project-oriented year following 15 years of maturation. The Moscow Meeting of the Council of Ministers of Foreign Affairs of the BSEC (Nov 1, 2006) made history by approving memoranda of understanding for the coordinated development of the Black Sea Ring Road and on the development of the Motorways of the Sea in the BSEC region. It is the first time in the history of the BSEC that projects of such magnitude have been adopted. Both projects will change the lives of the BSEC’s citizens, thus making our organization relevant to them. The first project will bring economic development to the region by facilitating the overland transport of goods within the BSEC, from Europe to Asia and vice versa, and by promoting tourism. The second project will make the Black Sea smaller by creating the necessary infrastructure to better connect the Black Sea ports and the Black Sea with the Mediterranean and the Caspian seas. Furthermore, they could provide an incentive for solving frozen conflicts. These two projects also promote the BSEC on the international scene, since they demonstrate that at last we are doing something; finally the BSEC is executing projects of interest to Europe and Asia. These two memoranda are expected to be signed at the Ministerial Council that will be held in Belgrade in spring 2007. The process of reforming our organization has been concluded in principle. In
By Ambassador Leonidas Chrysanthopoulos
Moscow, we reached agreement on two points that were included in the Bucharest Statement: the monitoring of the implementation of the resolutions adopted by the council and improving the contribution of the observer states to BSEC activities. We recently achieved consensus on the remaining point concerning reforming and restructuring the BSEC to increase its effectiveness, which will be finalized at the aforementioned Ministerial Council of Belgrade. Bakoyannis’s initiative At this moment, the final priority for our organization and for the Serbian Chairmanship is the enhancement of BSEC-EU relations, which is proceeding in a very positive way, particularly after the discussion on September 14, at the General Affairs Council, upon the initiative of the Greek minister of foreign affairs, Dora Bakoyannis. As a result of the BSEC’s collective efforts, the European Commission in its communication to the council of December 4, on strengthening the European Neighborhood Policy, included a paragraph on the BSEC and the Black Sea re-
gion that also anticipates establishing a regular dialogue with the BSEC at foreign minister level. The Commission is also updating its 1997 Communication and in April or May will deliver its new communication that will address the question of an enhanced Black Sea dialogue. Positive results were attained at the General Affairs Council of the EU in January when the issue was discussed, as well as in the working group of the council on January 24. On March 23, the BSEC member states met with the troika of the EU in Istanbul and paved the way for enhanced BSEC-EU interaction. Landmark summit On June 25, the future chairman-inoffice, Turkey, is hosting the BSEC Summit to celebrate the 15th anniversary of our organization. It will be a landmark summit that will endorse the reform package, the enhancement of BSEC-EU relations and the project-oriented approach of our organization. It will finally provide the necessary impetus that will allow the BSEC to flourish and play an important role in the region and — why not? — in global affairs.
Ambassador Leonidas Chrysanthopoulos is secretary-general of the Organization of the Black Sea Economic Cooperation (BSEC). BSEC website: www.bsec-organization.org
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Hayrettin Kaplan interviewed by Maria Vasileiou
‘There is great potential for the bank to expand operations in the small and medium-sized enterprises sector, the financial sector and infrastructure in particular.’ In his interview with The bridge Hayrettin Kaplan, president of the Black Sea Trade and Development Bank, outlines the increasingly important role the BSTDB is playing in the economic development of the region and offers a picture of its future plans: ‘During the 2007-10 period the bank shall seek to engage more substantially in such activities by sector diversification, including the commercial private sector, financial sector, real estate, municipal infrastructure and sovereign-backed projects, by increased lending to small shareholder countries, by increased number of operations with cross-border participation and benefits, and by increased emphasis on medium-sized companies.’ Kaplan was appointed to the post of bank president on February 16, 2006, for a period of four years. Born in Turkey, he has a master’s degree in economics from Boston’s Northeastern University and a PhD in banking from the University of Marmara. Kaplan started his professional career in 1987 at the Undersecretariat of Treasury and Foreign Trade of the Republic of Turkey and occupied progressively responsible positions, becoming a chief sworn bank auditor at the Undersecretariat in 1990. Having served on the Board of Sworn Bank Auditors for 10 years, he joined the Family Participation Bank in 2000 as a deputy general manager in charge of treasury, fund and risk management, financial analysis and international banking, among other areas. The bank belongs to the Ulker Group, a leading food and beverages company in Turkey with a strong presence in the Balkans, the Middle East, and Central Asia. Kaplan is the author of several publications in the field of banking and finance.
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At the beginning of this year two members of the Black Sea Trade and Development Bank, Romania and Bulgaria, became full members of the EU. In your opinion, what are the economic and political implications for the rest of the Black Sea region? On the whole, this represents a very positive development. The accession of Bulgaria and Romania will have a positive impact both politically and economically on the rest of the Black Sea region. They now have a proven record as democracies which have undergone a difficult but successful process of political and economic transition to pluralistic democracies with a market-based economic system. They thus represent pillars of stability in the region, as well as examples worthy of emulation for other countries. They both possess fast-growing, open economies which attracted record levels of foreign investment in 2005 and again in 2006. This has positive spillover effects for neighboring countries and is particularly observable in the rapidly growing trade and investment of Bulgaria and Romania with Greece and Turkey. If there is one caveat to this favorable picture, it is that the process of EU accession has put a premium on orienting toward Brussels and the standards and rules imposed by Brussels, even though some of these have negative effects regarding non-EU candidate neighboring countries. This is an unintended but perverse consequence of the accession process, and one which created some difficulties between Romania and Moldova, for example. However, it was
A lever for development and regional cooperation also the impetus for the EU’s European Neighborhood Policy, which represents the biggest opening and most constructive initiative of the EU thus far toward those Black Sea countries which were not — and still are not — candidates for EU membership: Moldova, Ukraine, Armenia, Azerbaijan, Georgia. An additional benefit of the accession of Bulgaria and Romania will be that there will now be three voices, along with Greece, inside the EU pushing for a greater and more constructive role in the Black Sea region. Already we have seen the first evidence of such a push in Commission communications prepared in the latter half of 2006, and everyone expects that in the spring of 2007 the Commission will present a more specific strategic plan which will focus more attention on the region and support regional cooperation efforts.
How is this development influencing the bank’s business? In the short term, it is having a positive impact on BSTDB business because the strong economic growth is creating many new business opportunities, and we are observing a far greater interest in investing in the Black Sea region. However, it is the contrarian nature of development banking that the more successful a country becomes, the less necessary the presence of development banks becomes. A country’s success raises numerous challenges for an institution such
as the BSTDB and we are anticipating the need to adapt so as to meet the changing circumstances yet continue to provide value added to interested firms and banks. The smaller countries There are great concerns about the economic enhancement of the majority of the bank’s member countries, especially the small ones. How does the BSTDB confront those challenges? As a whole, the Black Sea region, defined as being the 11 members of our bank, is the fastest-growing part of Europe, and the third globally. Since 2000, Black Sea region growth has averaged 5.9 percent a year, a figure which rises to 10.6 percent per annum for the so-called ‘smaller’ countries of Albania, Armenia, Azerbaijan, Georgia and Moldova. Even if you factor out Azerbaijan’s exceptional growth in 2005 and 2006 by 26 percent and 34 percent respectively, the other smaller countries have enjoyed strong growth, with the exception of Moldova, which experienced a slowdown to 4 percent in 2005 and 2006. However, Armenia has observed double-digit growth since 2002, Georgia has been at or above 10 percent, and Albania has averaged a solid 7 percent per year going back to 1998. Thus, the region is growing at a healthy rate,
and the smaller countries at an exceptional rate, a fact that is also observed in improving social indicators, declining poverty rates, and rising consumer and business confidence. The BSTDB is not an institution focused on balance of payments support, poverty alleviation, or the conduct of policy dialogue for macroeconomic stability and development. Our bank seeks to promote development and regional cooperation as a project-based entity. Thus, through our participation in projects based in the region, we contribute to greater prosperity, development and, hopefully, regional cooperation. Economic progress & cooperation The BSTDB has already built a large portfolio of projects which have been directly or indirectly financed. Do you think that these projects have been enhancing economic progress and cooperation in the region? If you could measure their contribution, how would you rate them? I believe that we are having an impact at the micro level for the firms and banks with which we work. We are meeting demand in previously underserved areas such as trade and corporate finance, and that is demonstrated by the structure of our portfolio, which has many of these types of projects. They have helped firms to expand their operations, as well as to invest in neighboring countries, even as they build a track record working with an international financial in-
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stitution and develop their range of contacts and markets further. Nevertheless, there is room for further progress both in the development impact of our operations and even more so in achieving regional cooperation impact. Our work with private firms has clear developmental benefits, and to the extent that they facilitate cross-border trade and investment there are regional cooperation benefits as well. But the impact of regional cooperation can be tricky, especially for high-profile initiatives where more than one actor from more than one country is involved. Without getting into some sort of arbitrary scale, there is no question that we could be doing more in this respect, despite the greater risks, frustrations and upfront costs involved. Oil & gas pipelines Energy-wise, Southeast Europe and especially the Black Sea countries will be of enormous interest in the future. The region has considerable energy sources. Is the BSTDB planning to increase its financing toward energy projects in the region? The bank’s first operation, back in 1999, was arguably the one with the greatest regional cooperation impact. It was participation in the Trans-Balkan gas pipeline, and it had measurable direct and indirect benefits for six member countries. The BSTDB has supported other energy projects subsequently, for extraction, generation, transport and storage of energy resources, and we plan to continue to support projects in this key strategic area. The bank is looking into participation in a number of possible projects in
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the broadly defined energy sector, not just for oil and gas, but also for electricity. Indeed, our biggest current investment in the energy sector is financing provided to the Maritza power-generating plant in Bulgaria. It will remain a priority sector for our institution, and we are confident that, with current infrastructure needs and growing demand, there will be many opportunities for us to expand our energy portfolio further. As for our overall portfolio, at the end of December 2006 our active portfolio consisted of approved operations, planned commitments of US$875 million, signed operations, commitments of US$693 million, and outstanding or disbursed operations amounting to US$448 million. Relative to 2005, our increase in the overall level of planned commitments was 30 percent, the increase in commitments was 22 percent and the increase in amounts outstanding was 14 percent. There is a lag between the periods of approving, signing and disbursement, and it grew in 2006 due to the nature of some of the operations. The economic sectors Apart from energy, which economic sectors are of great importance for the economic enhancement for the Black Sea region? Which are the most important projects you have financed and what are your future plans? Some of the most important projects the bank has financed to date include: First, the Maritza East III Power Plant, which is a Bulgarian project with cross-border benefits. The project leads to the improvement
of the efficiency of the energy sector with strong developmental effects for the country in which it is based and its neighbors. Second, KCM, which is the loan-financed environmental improvements at Bulgaria’s largest zinc and lead smelter. Without the proposed environmental program, it could have become necessary to restrict operations or even close the facility. Third, Petrom, which was a Romanian operation for a vertically integrated oil and gas company, with core operations in Romania and increasing international involvement in Kazakhstan, Hungary, India and Moldova. Last, but not least, the Trans-Balkan Gas Pipeline Project, Phase I and Phase II. This Ukrainian project with cross-border benefits is a program aimed at the expansion of the Trans-Balkan gas pipeline system. There is great potential for the bank to expand operations in the small and mediumsized enterprises sector, the financial sector and infrastructure in particular. Cooperation with other international financial institutions will continue to play a significant role, in particular for large operations. During the 2007-10 period covered by the mediumterm strategy and business plan, the bank shall seek to engage more substantially in such activities by sector diversification, including the commercial private sector, financial sector, real estate, municipal infrastructure and sovereign-backed projects, by increased lending to small shareholder countries, by increased number of operations with cross-border participation/benefits and by increased emphasis on mediumsized companies.
Protection of the environment Environmental issues and environment-friendly policies are high on the political agenda these days. Is the BSTDB planning to increase its financing for projects related to the environment? All bank operations have environmental components, to a greater or lesser extent, and in this respect the BSTDB as a development bank makes sure that its financing has at least a neutral impact on the environment and human well-being, and works jointly with borrowers to increase an operation’s positive impact while reducing/minimizing BSEC All
any negative effects. In terms of increasing the portfolio of environmental projects, indeed, the bank is seeking actively on the market to identify operations which aim primarily at improving environmental conditions, but at the same time which are bankable from the economic and financial point of view. In this respect, the most attractive prospects are operations which deal with modernization of municipal wastewater treatment plants, as well as municipal drinking water supply, but also operations which support environmental expenditures of such polluting industries as steel manufacturing and the chemical industry; for example, supporting environmental expenditure programs of Severstal in Russia, Kremikovtzi and KCM in Bulgaria, and Stirol in Ukraine. Operations in the renewable energy sector, such as the installation of wind turbines, use of biomass to produce biofuels, and so on, as well as operations in the organic agribusiness sector, given that many of our member states have large agricultural sectors, look promising and also have a high potential rate of return. BSEC Small
‘Small’ Countries: Albania, Armenia, Azerbaaijan, Georgia, Moldova 20.0% 18.0%
GDP Growth Rates
16.0% 14.0% 12.0% 10.0% 8.0% 6.0%
Strategic goals What are the bank’s strategic goals for the future? How do you see it developing in the future? For the medium term the emphasis will be put on manageable growth. That is growth which allows for the control of risks and maintenance of good asset quality while expanding and diversifying the operational portfolio. With the experience of seven years of operation, and given the changing conditions and needs in the region, the bank will need to consider certain areas where it would be willing to lay greater stress on cooperation and development aspects. It will focus on new types of activities and target clients. While the bank will continue to lay stress on development impact and country-specific operations, increased attention shall be given to operations whose benefits are accrued more directly by more than one country, in particular through increased trade and intraregional investment flows, but also through genuine cross-border operations. The bank employs its capital structure, relations with member countries’ governments and knowledge of the region of operation to foster development by focusing on financing projects, programs and commercial activities, on information sharing, promotion of the region, development of networks, and other knowledge dissemination activities and on promoting institutional development and capacity building.
4.0% 2.0% 0.0% 1995-99 Avg
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2007 Proj.
BSTDB website: www.bstdb.org
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The bank, the companies and the markets By Maria Vasileiou
The Black Sea Trade and Development Bank (BSTDB) is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine. The BSTDB headquarters are in Thessaloniki, Greece. With an authorized capital of SDR (Special Drawing Rights) (approx US$1.45 billion), the bank supports economic development and regional cooperation by providing financing, guarantees and equity for projects in the public and private sectors in its member countries. The BSTDB is rated long term Baa1 and short term P2 by Moody’s. Since the beginning of operations in 1999, the BSTDB’s board of directors has approved the financing of a number of projects. At the end of December 2006 finance operations totaled US$875 million. This amount consisted of approved operations, while signed operations amounted to US$693 million, and outstanding or disbursed operations had reached US$448 million. In this issue, The bridge presents four companies that have been financed by the BSTDB over its seven years of operation and one bank which is one of the BSTDB’s financial intermediaries. These organizations are considered to be leading companies in their sectors. They are based in five different countries — members of the bank — but their activities extend to a number of other regions, including the Black Sea area. Importantly, they reveal how the BSTDB is making an effort to stimulate economic development in the area.
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1 Alumil SA (www.alumil.com) is the largest aluminium extrusion company in Greece. In October 2003 the BSTDB agreed to provide the company with a long-term corporate loan of 20 million euros aimed at supporting its substantial investment plan. At the time, the capital expenditure program of Alumil SA involved investments in new equipment and industrial sites in Greece, Albania, the Former Yugoslav Republic of Macedonia (FYROM), Serbia, Romania and Bulgaria, with the purpose of resulting in the significant improvement of Alumil’s competitive position in the Balkan and Black Sea markets. Alumil SA is listed among the top European aluminium extrusion and profiles production groups creating production sites, large sales networks and warehouses for products targeting architectural and industrial uses, shipping industries and transportation. With 25 subsidiaries, 19 of which are spread throughout Europe, Africa and the Middle East, and production sites in four industrial areas in Greece, as well as Romania, Bulgaria, Serbia, Albania and Bosnia, Alumil has successfully infiltrated 45 markets in Europe, the Balkans, the Middle East and the USA. A significant competitive advantage for Alumil remains its widespread sales network in every client country as well as in Greece. Included three times in Growth Plus Europe’s 500, Alumil’s group sales reached 172.8 million euros in the first nine months of 2006, compared to 138.2 million euros during the same period in 2005. The 25 percent increase was mainly driven by the expansion strategy in the Balkan markets, Egypt, the Gulf area and the markets of Western Europe. The operational earnings margin (as percentage over sales) almost kept the nine-month 2005 levels (18.2 percent compared to 18.6 percent), whereas the operational expenses mar-
4 success stories gin improved to 16.6 percent, compared to 18.5 percent of ninemonth results. The company was established in 1988 by its present major shareholders (the Milonas family) following their withdrawal from Industry of Aluminium of Northern Greece SA, which produced aluminium profiles. The company immediately embarked on the construction of its industrial installations in the industrial area of Stavrohori in Kilkis, northern Greece. Five years later the company established its subsidiary, Alousys SA, which was based in Athens and aimed at selling accessories and aluminium profiles throughout southern Greece in addition to providing technical support to customers. At the same time a new horizontal powder-coating unit was created in Stavrohori, along with a thermal break profiles production unit and a profile surface protection unit, using special selfadhesive polypropylene films. These investments, completed in 1994, boosted Alumil’s expansion into new, specialized-use products, creating higher added value for international markets. In 1998, new subsidiary establishments followed in Hungary (Alumil Hungary), Greece (Alukom SA, Industrial Area of Komotini) and Albania (the subsidiary Alumil Albania SHPK), while the company also purchased land and building installations in the industrial area of Kilkis to create warehouses, a department for profiles processing, a new sublimation painting unit and a die-cast components production unit. That same year the company was listed on the Athens Stock Exchange (ATHEX). One year later new subsidiaries were founded: Alumil Bulgaria (Sofia, Bulgaria), Alumil Polska (Torun, Poland) and Alumil Extrusion (Bucharest, Romania). New investments were
made in Kilkis, while the establishment of a subsidiary in Ukraine supported the expansion of the company’s commercial network. In 2000 Alumil completed a 29.6-million-euro capital increase at the ATHEX, capitalizing reserves and adding new capital by the issuance of new stocks, paid in cash. The firm’s public registration in 1998 and the share capital increase in May 2000 proved to be important sources of financing for Alumil. The drawn capital was channeled toward the expansion of its commercial and productive base in Greece and abroad. The same year a fifth, 8,000-ton-per-annum profiles production unit in Kilkis was added and a series of new subsidiaries were established: Alumil Misr for Aluminium and Misr for Accessories (Cairo, Egypt) for accessories production, trading and profiles processing and trading in the Arab markets. Alumil Industry, Alumil Deutschland, Alumilskopje and Alumil Milonas Cyprus were established to increase sales in the niche markets of Moldova, Germany, FYROM and Cyprus respectively. Frankfurt became Alumil’s Central European logistics center. In Serres, northern Greece, the Metron subsidiary was established to produce and install automatic doors and automations. Further developments followed and in 2002 group strategy involved penetration into new production fields such as polycarbonate sheets, composite panels and brand-new anodizing units. Every single year new investments have led the group to expand even further. Today the group plays a leading role throughout Southeastern Europe, constantly increasing volumes and adding new, high valueadded products to its portfolio.
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2 In February 2007, the BSTDB made 18 million euros available to Kremikovtzi AD (www.kremikovtzi.com), the largest steel producer in Bulgaria, for the implementation of the company’s post-privatization capital investment program with a total cost of over 400 million euros. The BSTDB loan with maturity of seven years is expected to enable Kremikovtzi to upgrade and revamp its manufacturing facilities so as to increase the production of higher value-added products. ‘As a development bank, the BSTDB is happy to contribute to the modernization of the Bulgarian industry leader and major employer and to support its plans to become a competitive modern manufacturer with a strong regional and international presence,’ said Vice President of Banking Mikhail Jernov when signing the project. ‘This loan from the BSTDB would help Kremikovtzi AD to achieve its plan of making the products of international standards,’ said Vilas Jamnis, the company’s CEO. Kremikovtzi AD was privatized in 1999. Today it is owned by Global Steel Holding Ltd (71 percent) and the Bulgarian government (25 percent). The company manufactures and sells a variety of flat products, coke and ferroalloys to clients in Bulgaria, the EU and the Balkan region. Employing more than 7,000 people, Kremikovtzi AD generates around 2 percent of the Bulgarian GDP and over 10 percent of Bulgarian exports to the European Union. The foundations of Kremikovtzi Corp were laid in 1960. That was a result of the Bulgarian government’s policy to change the country’s agrarian development tendency to an industrial one. The idea was to utilize the 30-37 percent iron ore deposit near the village of Kremikovtzi. The first production capacities went into operation in 1963: the ore preparation plant, the sintering plant, the first coke battery, the first blast furnace, the power station and the repair-and-mechanical plant. During the next 10-15 years the main production plants began to operate one after the other along the process flow: the steel-making plant — electric arc furnaces and converters, the blooming and slabbing mill, the hot rolling mill-1700, the wire rod mill-250, the pipe production plant, the cold rolling mill, the tinning line, the galvanizing line, the pre-painting line and the ferroalloy plant. At the same time,
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the gas production plant, the water supply plant and the water treatment plant also went into operation. The company was privatized in 1999; 71 percent of it was acquired by a Bulgarian-owned company, Daru Metals (later to change its name to Finmetals Holdings). In 2005 Valentin Zahariev and Kiril Zahariev sold 100 percent of Finmetals Holdings for US$110 million to Global Steel Holdings Ltd (GSHL). The new management brought in by Global Steel Holdings Ltd has embarked on an investment program aiming to improve the product quality, reduce the production costs and widen the product range. The key focus of this was the purchase of a new continuous caster and a new converter; both of these came on stream in November 2006. Most of Kremikovtzi AD’s production is exported to the European Union, Turkey, some countries of the former Yugoslavia, the USA and China. The profit was 120 million leva in 2003 and 80 million leva in 2004. In January 2005 Kremikovtzi AD acquired 70 percent of the LEMIND-FPL polyester-covered sheet iron factory in Leskovac, Serbia, doubling its total output of sheet iron to 72,000 tons per year. The company also made another acquisition in April 2005, purchasing the Lamkos galvanized sheet iron factory in Kosovo. In November 2006, the debt obligations of the company were subject to price volatility as speculation mounted about the level of commitment to the business by GSHL. Pramod Mittal issued a statement to reassure investors of his ongoing interest in Kremikovtzi’s success, but this was not sufficient to dampen the ongoing volatility of the price. At the beginning of December 2006, GSHL issued another statement, this time committing to inject cash into the business on an ongoing, quarterly basis. At the end of February, Global Steel Holdings Limited announced that it had strengthened the management board of Kremikovtzi AD by appointing five new members, taking the total number of the board up to eight. Among the new appointments was Vilas V. Jamnis, who was appointed CEO. At the same time, Global Steel reiterated its commitment to invest 300 million euros as part of an expenditure program, including modernization, upgrading and putting in place environment protection systems to meet EU norms at Kremikovtzi. According to GSHL, the investments will be made in compliance with the plan and understanding between Global Steel and the Bulgarian government.
4 success stories 3 In May 2005 the Black Sea Trade and Development Bank extended a six-year US$20 million corporate loan to OJSC Concern Kalina (www.kalina.org), one of the largest producers of personal and household hygiene products in Russia. The bank aimed at supporting the company’s investment program, which included modernization of production facilities, research and development, as well as the promotion of new brands, acquisition of enterprises and expansion of inventories. OJSC Concern Kalina is one of the leading Russian perfumery and cosmetics producers. The leading brands of the company are Black Pearl, Clean Line and MIA among the skin-care products, 32 and Forest Balsam on the mouth-care market, and Angelica Varum among the perfumes. Its products are produced in conformity with international standards. The company consists of the parent enterprise in Ekaterinburg, the Omskiy detergents factory, the subsidiary Pallada Ukraine in Ukraine, Novoplast, Kalina Overseas Holding BV in the Netherlands and Kalina International SA in Switzerland. The concern owns a controlling stake of the German cosmetics and perfumery manufacturer Dr Scheller Cosmetics AG. Apart from its own brands, the company also promotes to the markets of Russia and the Commonwealth of Independent States brands of the German manufacturer of cosmetics and perfumery Dr Scheller Cosmetics AG — Manhattan, Manhattan Clearface and Apotheker Scheller. The company’s suppliers are leading companies producing raw materials for perfumery and cosmetic products. OJSC Concern Kalina has production facilities in Russia and Ukraine. The regional trading network of the company consists of 188 dealers, mainly in Russia. The company was founded in 1942 on the premises of the Novaya Zarya factory that was evacuated from Moscow. Serious building reconstruction and equipment modernization were undertaken in the 1970s. The first production lot of Troynoy eau de cologne was manufactured in 1974 in a new perfume workshop. A new skin-care production line was installed in 1975 for creams in tubes and manufacturing. Kalina installed new lines for toothpaste production, a plastic
packaging line, soap manufacturing and packaging lines and laminated tube lines in the 1990s. In 1999 the company obtained the ISO9001 International Quality Certificate. According to the company, its products meet the rigid European requirements. After privatization in 1992, Timur Goryaev consolidated a controlling stake of company shares. In 2000 the European Bank for Reconstruction and Development (EBRD) acquired a new issue of shares and became a 19.24 percent shareholder (together with its two venture capital funds). In 1999, the open joint stock company Uralskie Samotsvety changed its name to OJSC Concern Kalina. In 2004 the company placed an additional issue of ordinary shares within the framework of the initial public offering on the Moscow Interbank Currency Exchange (MICEX), which resulted in an increase of its free float approximately up to 33 percent. In spring 2005 the company acquired a controlling stake of the German cosmetics manufacturer Dr Scheller Cosmetics AG. In the same year it completed a technical production modernization in order to create productive capacity reserves as well as to correspond with the development program of OJSC Concern Kalina, raising automation and production quality. At present OJSC Concern Kalina is one of the leaders on the Russian cosmetic and perfumery market with consolidated sales of US$182.6 million, according to 2004 results. In the first half of 2006, sales and gross profit reached 3,619.5 million rubles and 1,735.9 million rubles respectively. As compared to the first half of 2006 the company’s sales and gross profit increased by 17.3 percent and 14.3 percent respectively.
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4 success stories 4 In June 2004, the BSTDB decided to provide a US$10 million corporate loan to Pinar Sut AS (www.pinar.com.tr), a leading Turkish dairy products company. The proceeds of the loan were aimed at financing the ongoing capital expenditure and working capital needs of Pinar Sut for its new plant in Eskisehir in Turkey. On the day the loan was granted, Hasan Denizkurdu, CEO of Pinar Sut’s mother company Yasar Holding (www.yasar.com.tr), stated that the ‘financing will allow us to further increase our productivity and the variety of our product range. We also expect to increase our exports to countries of the Black Sea region.’ Situated in Izmir, Pinar Sut AS is the flagship company of the Yasar Group (food division). Since its foundation, the company has evolved from a family business into a major market player in Turkey, the Middle East and the Black Sea region. The Yasar Group has a multinational orientation with exports to 26 countries, including Russia, Romania, Bulgaria, Georgia and Azerbaijan. Founded in 1975 as the biggest production facility in the Middle East, Pinar Sut (dairy products) sustains its leadership with the operations carried out at its factories in Izmir and Eskisehir. Employing cutting-edge technology in the production of milk and dairy products and making up indispensable components of healthy nutrition and in their delivery to consumers, Pinar Sut optimizes the hard work put in by more than 35,000 producers. By supporting them, the company contributes to the increase of milk production in Turkey. Its fields of production include milk (plain, light, functional, organic, flavored), butter, yoghurt (plain, light, functional, fruit, drinks), cheese (spreadable, traditional, practical, special), fruit juice, sauces and powdered products. As far as its brands are concerned, Pinar is the umbrella brand with sub-brands for specific segments, such as Pinar Denge for functional products, Pinar Kido for 6- to 12-year-olds, Pinar Ilk Adim for children between 6 months and 6 years, and Pinar Beyaz for spreadable cheese. With a view to having access to good-quality raw milk, Pinar Sut collaborates with around 250 farms based on the contracted farming model, and efforts are spent on establishing the total quality concept of Pinar Sut at these farms. Pinar Sut collects the best-quality milk, a
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feature owed to its system of collecting milk twice daily under the supervision of 140 contracted veterinarians. The company’s aim is to respond to the increasing demand for safe, functional and organic food. Ranking 100th among the 500 major industrial enterprises in Turkey, Pinar Sut attained total net earnings of 325.1 million new Turkish lira (IFRS) in 2005. Maintaining its brand leadership in milk products and aiming to be among the top three brands in all product categories in which it is involved, Pinar Sut’s objectives are in line with its goal to grow in functional, organic, enriched and flavored milk markets, to expand its cheese portfolio through new product launches and to sustain its leadership in the spreadable cheese market. Based on 2005 AC Nielsen market research reports, Pinar Sut is a leader in the long-life milk market with 27 percent. With a total market share of 48 percent in the spreadable cheese category, Pinar is a leading brand with labne (labaneh), beyaz (fresh spreadable cheese) and krem (spreadable cheese). In keeping with the strategy of expanding the cheese portfolio, the Ezine type of white cheese in solid and spreadable form was launched in 2005. Closely monitoring global trends, Pinar Sut introduced products targeting the functional and organic market in 2005. Pinar Sut was the first company to present ‘organic milk’ to Turkish consumers. The company further expanded its product range with Pinar Denge Prebiotic Milk and Pinar Denge Probiotic Light Yoghurt introduced in 2005. Pinar Sut holds TS-EN-ISO 14001 environmental management system, TS-13001 HACCP food safety management and TS-EN-ISO 9001:2000 quality assurance system certifications. The company is accountable for 60 percent of milk and dairy exports from Turkey. Primary export destinations of Pinar Sut include Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Qatar. The major export product to these countries is Pinar Labaneh, which makes Pinar the leading brand with a 45 percent market share. The line of export products is further expanded with the addition of white cheese, light white cheese, white cheese in brine and breakfast cream manufactured specially for the overseas markets. Pinar’s Labaneh and spreadable cheeses market is growing across the whole world in general and in Arab countries in particular. Pinar Sut’s total exports in 2005 were worth US$21 million.
A financial intermediary of the BSTDB in Romania Banca Transilvania started operating at Cluj-Napoca, in the heart of Transylvania, 13 years ago as the initiative of a group of businessmen in Cluj. The main idea was to create a local bank, a Cluj brand. The founders’ entrepreneurial spirit left its mark on the bank’s growth strategy and business approach, building up a strong presence, initially in Cluj and afterward regionally. Back in 1994, the bank targeted small and medium-sized enterprises, but, considering the market opportunities, is now focused on retail as well. In 1997 Banca Transilvania became the first Romanian bank to be listed on the Bucharest Stock Exchange, enhancing its market value and adding transparency to its corporate principles. Five years later, 2002 represented a turnaround year for Banca Transilvania, with a new management approach, benefiting from international know-how, which imprinted a different management style on the bank. Under the management of Dutchman Robert C. Rekkers, Banca Transilvania embarked on an ambitious expansion in retail, small and medium-sized enterprises (SMEs) and corporate banking. A year later, in 2003, Banca Transilvania decided to change its corporate identity, starting a rebranding process and implementing a new, standard concept throughout its whole branch network. In September 2004 the BSTDB selected Banca Transilvania as a financial intermediary in Romania for its small and medium-sized enterprises finance facility. The BSTDB extended a 5-million-euro SME loan facility to Banca Transilvania with the aim of financing regional small and medium-sized enterprises. Acknowledging the importance of building up a financial services group, Banca Transilvania became the key driver of Banca Transilvania Financial Group, offering integrated financial services including banking, insurance, leasing, brokerage, asset management, consumer financing and factoring through its subsidiaries: BT Asigurari, BT Leasing, BT Securities, BT Asset Management SAI SA, BT Direct, BT Finop Leasing IFN SA, Compania de Factoring. In time, Banca Transilvania benefited from the full support of its shareholders, including the European Bank for Reconstruction and Development (EBRD) with a stake of 15 percent. Apart from being a significant shareholder, the EBRD has also proved to be an important business partner. The bank’s three main business lines, retail, SMEs and corporate, rely on dedicated people (more than 4,500) both at branch and head-
quarter level, offering specialized products and services to over 750,000 customers, of which about 100,000 are companies. Banca Transilvania’s strategy is to achieve nationwide representation, having currently more than 340 branches and agencies. The network growth strategy has maintained a dynamic pace over the last two to three years. At the beginning of 2003 Banca Transilvania had 46 units and reached 341 at end-2006. In 2006 the bank opened 126 locations, launching also in Timisoara the first banking cafe in Romania, BT Cafe, and its Italian Desk, an office designed for Italian businesspeople. All these new operational units meant new workplaces — almost 189 employees were hired every month. Banca Transilvania is today one of the most important financial institutions in Romania, ranked among the top 10 banks and a blue chip on the Bucharest Stock Exchange. The bank aims at a continuous improvement of its products and services, paying special attention to the professionalism of its employees. With a market share of 4.7 percent in terms of assets, Banca Transilvania is placed among the first five banking institutions in Romania and is recognized as an important player on the Romanian banking market. At the end of 2006 the bank’s total assets reached 8.085 billion RON, increasing by 64 percent compared with a year earlier. The bank’s gross profit amounted to 132.5 million RON and the net profit grew to 120.2 million RON, increasing by 21 percent despite investments of 93 million RON made during 2006. In 2007 the bank aims to proceed with an investment of 30 million euros, concentrating on quality improvements, modernization of IT and cards systems, training programs and also the opening of another 80 units. The bank’s goal is to increase the number of clients to a million. In 2007 the bank also aims to establish a joint venture company, created with AEGON, one of the world’s largest life insurance and pension companies, in anticipation of the mandatory pension system which is expected to be operational in Romania by early 2008. AEGON and Banca Transilvania have signed a memorandum of understanding to jointly develop and operate a mandatory pension company in Romania. Due to its outstanding results, Banca Transilvania has received several awards from reputable financial publications: Best Bank for SMEs, awarded by Bucharest Business Week, and Bank of the Year 2006, awarded by Oskar Capital. Banca Transilvania website: www.bancatransilvania.ro
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A chill wind On January 15, 2007, a new political group called Identity, Tradition, Sovereignty (ITS) was formed in the European Parliament. Composed of 20 members of the European Parliament, ITS represents not only 23 million Europeans, but also populism and ultra-nationalism as expressed by the extreme right in Europe. Five of its members are from Romania and one is from Bulgaria. The group’s founding charter has been described as ‘broadly anti-immigration, anti-Semitic, anti-EU constitution and anti-Turkish EU membership.’ Professor Alina Mungiu-Pippidi, Romania’s most prominent civil society activist and founder of the Romanian Academic Society, and Dr Daniel Smilov, program director at the Center for Liberal Strategies, Sofia, analyze here the phenomenon of populism and the extreme right in Europe in depth. Mungiu-Pippidi describes not only the roots of populism and the extreme right in Europe, but also the threat it may represent for democracy and the European Union, as well as the theoretical background of the populist electoral syndrome in Europe, where nationalism and authoritarianism are closely interlinked. Furthermore, as Smilov underlines, ‘there is a certain paradox in the situation, because both Bulgaria and Romania are among the most Europhile countries in the EU.’ However, today, EU skepticism is being imported into Bulgaria from the outside, now that its radical populist party has become a member of ITS and it is slowly starting to learn ‘Euroskeptic-speak.’ As a result, ‘the populist parties around Europe start to present a systemic problem.’ Maybe, as Mungiu-Pippidi points out, ‘the best electoral defense from radical populism remains… moderate populism. There is no shortage of leaders and parties to bet on it, in both halves of Europe,’ both ‘old’ and ‘new.’
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Roots of radical populism By Professor Alina Mungiu-Pippidi
The emergence of a new political club in the European Parliament raises legitimate questions about the nature of European radical populism. What, if anything, do Jean-Marie Le Pen’s voters have in common with Vadim Tudor’s? Is populism in ‘old’ Europe the same animal as populism in ‘new’ Europe, at least enough to generate a common European platform? And how far can it still go? Prior to EU accession it would have been quite inconceivable to have such parties in government in the new member countries. Presently, not only do we find them as government associates in Slovakia and Poland, but elements of their discourse feature more and more frequently in those of mainstream parties. The Slovakian case shows that whenever you have a populist electoral syndrome, not even the most skillful electoral manipulation can prevent such parties from eventually reaching power. Are there still other such examples in the making? The populist electoral syndrome The populist electoral syndrome consists of a configuration of public opinion characterized by a strong dislike of politicians and a preference for technocratic government. Traditionally, populism was associated with a ‘development crisis,’ causing social and psychological disruption following aggressive modernization and leading to an idealization of the pre-change period. This context was common to all historical populist movements, both European and American.1 Besides this context, there are always two essential features which surface in any populist movement. Edward Shils defined them when discussing American populism as a) identifying the will 1. See Ghita Ionescu and Ernest Gellner (eds), Populism: Its Meanings and National Characteristics (London, Weidenfeld & Nicolson, 1969).
blows in Europe of the ‘people’ with justice and morality, and b) the desirability of a ‘direct’ relationship between people and leadership, unmediated by institutions. 2 Old & new Europe There are some similarities between the generation of populism in the present context and the historical one. In old Europe, globalization and an elite-led EU project has estranged many voters. In new Europe, the major upheaval caused by the transition from command to market economies compares well to the early 20th century contexts when populism developed. In both instances traditional ways had to be abandoned swiftly under a threat to survival, social norms changed radically overnight, and the collective self-esteem of various social and ethnic groups came under pressure. Present surveys show that citizens’ discontent with their lives compares to communist times and the perception that the ‘same people’ have been successful before and after 1989 is feeding populism in new Europe. 2. See Edward Shils, The Torment of Secrecy: The Background and Consequences of American Security Policies (London, Heinemann, 1956).
The classical definition The populist syndrome nowadays is not far from the classical definition of populism as a ‘frame of mind that follows abrupt societal transformation, defined by fear of and resistance to change, nostalgia for a golden period and a sort of persecution syndrome.’ Ethnic minorities, people perceived as faring comparatively better and politicians are blamed quite indiscriminately. Politicians are perceived as the new privileged, a super-status group viciously connected with those who profited from the transition.3 3. See A. Mungiu-Pippidi and D. Mandruta, ‘Was Huntington Right? Testing the Border of Civilizations’ in International Politics (London, Kluwer, summer 2002).
Nationalism & authoritarianism More in-depth research shows that the origins of these perceptions differ in the two halves of Europe. In the West, the underclass and the right-wing voters usually get blamed for supporting such parties. In the East, in Romania and Hungary, for instance, the sympathizers of Vadim Tudor and Istvan Csurka are more likely to be inactive, usually the unemployed for the former and pensioners for the latter. Such social determinants do little, however, to explain the vote for these leaders. Nationalism and authoritarianism explain more. Dislike for multiparty politics explains a great part of the vote for radical populists in Central Europe. Territorial nationalism, fed by the feelings (shared by majorities) that borders in Eastern Europe are ‘wrong,’ completes the picture. However, nationalism explains the electoral support for some mainstream parties as well. If the radical parties are not stronger, this is due to competition from mainstream parties on nationalism. The difference between the voter for radical populism and the voter for a more moderate nationalist party lies in democratic attitudes. The average Viktor Orban voter is a democrat, although very likely a nationalist, while the Istvan Csurka voter is both nationalist and authoritarian. There is also a communist link. Across all the countries of new Europe, the connections of radical populists are more frequent-
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A chill wind Imported Imported
Euroskepticism ly with communist-era secret services than genuine right-wing movements. The connection with tradition is also more superficial in the East than the West. Moderate populism In conclusion, support for radical populism is related to agendas peculiar to the two halves of the continent. Unfinished national revolutions and disputed borders and constitutions feed the radical brand of populism in the East, while fear of immigration or outof-control European integration concerns West European voters. But such differences might become less and less noticeable as these parties socialize together and borrow elements of rhetoric and style from each other. EU skepticism was originally so low in new Europe that it can only increase, creating a new source of such votes. The best electoral defense from radical populism remains, realistically speaking and for the time being, moderate populism. There is no shortage of leaders and parties to bet on it, in both halves of Europe.
Professor Alina Mungiu-Pippidi is director of the Romanian Academic Society, a think tank in Bucharest, and a consultant for Freedom House and the United Nations Development Program in the Balkans. She is also a professor of political science at the Romanian National School of Government and editor of the Romanian Journal of Political Science. Romanian Academic Society website: www.sar.org.ro
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By Dr Daniel Smilov
What difference has the accession of new members Bulgaria and Romania made to EU political life? The skeptic will ironically focus on the fact that far-right nationalists achieved the quota to form their own faction in the European Parliament. And indeed, Bulgaria’s humble contribution of one MEP to the newly formed group Identity, Tradition, Sovereignty helped it to reach the magic number, 20, necessary for formal registration. The formation of this parliamentary group came at a bad time for the EU: Enthusiasm for enlargement is already exhausted, and the phrase ‘ever closer union’ rings increasingly hollow. However, there is a certain paradox in the situation, because both Bulgaria and Romania are among the most Europhile countries in the EU: Probably these are the two places, apart from the city of Brussels, where the continent’s federalist project is still alive and well. Ataka Consider for instance Ataka, the radical populist Bulgarian party which did very well in the 2005 domestic parliamentary elections by capturing some 9 percent of the vote, which consequently entitled them to one seat in the EU Parliament. In domestic politics Ataka was not set up as an anti-European party. On the contrary, it supported Bulgaria’s accession to the EU. The irony here is that EU skepticism is in fact being imported into the country from the outside: When Ataka became a member of the Identity, Tradition, Sovereignty group it slowly started to learn Euroskeptic-speak. It has not fully learned it yet, and, indeed, this manner of speaking is not something which could command many voters at home. However, there are sufficient common attributes between Ataka and most of the far-right parliamentary group’s other members: It is a party which is nationalistic, populist in its economic policies, and vocal against ethnic minorities. In a Bulgarian context, it is a
blows in Europe party which challenges the consensus among the mainstream political players formed during the transition period. This consensus focused on market reforms, integration of the ethnic minorities, especially the Turkish minority in the political system, and extensive protection of liberal constitutional rights. Ataka is against all of these points. Reminiscent of the Nazis Firstly, Ataka campaigns for the revision of all major privatization deals: It argues that privatization was carried out in a corrupt fashion, constituting a ‘robbery’ of the people. Secondly, it is militantly against minority rights and the representation of such groups in politics. It calls the Turkish ethnic minority party — the Movement for Rights and Freedoms — ‘unconstitutional’ and argues for its dissolution. Also, its members use abusive language against the Roma, which ranges from a mere lack of political correctness to out-andout racism. Finally, the outlook of some Ataka supporters, as well as the style of their leader, is intentionally reminiscent of the Nazis: black leather jackets, boots, a slightly demented look in the eyes, and distasteful political aesthetics in general. Dimitar Stoyanov, Ataka’s MEP, has already managed to introduce his European colleagues to the party’s political style: He sent a racist e-mail message to all of them, apparently trying to pull a joke. There is something in Ataka which cannot be easily dismissed, however. That is its radical populism. Ataka is not interested in individual rights and liberal principles: It claims to speak with the voice of the people. It is true that it commands a small percentage of the voters, but it promises to stand for whatever they want, even if this is against conventional wisdom, constitutional restrictions or economic rationality. This feature of Ataka points to an important aspect of contemporary politics: Voters are getting increasingly tired of mainstream
political players and going for extravagant and even dangerous alternatives, because actually it is only these alternatives which promise ‘substantive changes.’ And, indeed, as many have noticed, the dividing line between the left and the right is no longer with us: The value of ideology in politics has radically decreased. In fact, only parties such as Ataka claim that they offer a different ideology — radical populism — no matter how disgusting it could actually be in its concrete interpretations. A systemic problem In conclusion, Ataka could have hardly strengthened Euroskepticism in Europe, because its own Euroskepticism is still half-baked. Its European debut has demonstrated, however, that the populist parties around Europe are starting to present a systemic problem. It is no longer just the Austrian nationalists, Le Pen and Mussolini’s granddaughter, but a parliamentary faction which now formally holds the same standing as the other ‘mainstream’ parties. Is this a sign of a crisis for the party systems across Europe? In any event, it will be a serious mistake to dismiss it as just a part of the exoticism which the latest two entrants have brought to EU politics. Dr Daniel Smilov (DPhil, Oxon) is program director at the Center for Liberal Strategies, Sofia. He is also assistant professor of political theory at the Political Science Department of Sofia University, and recurrent visiting professor at the Central European University, Budapest. Center for Liberal Strategies website: www.cls-sofia.org
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Turkey’s Sinan Ulgen, chairman of the Center for Economics and Foreign Policy Studies (EDAM) in Istanbul, one of the most significant think tanks of Turkey, a former career diplomat and a well-known and much respected analyst for EU affairs, does not hesitate to stress in his interview with The bridge the imperative need for ‘a speedy settlement’ to the Cyprus issue. Since, ‘the question of the division of Cyprus is’ not only ‘a fundamental problem, which is likely to continue to negatively impact Turkey’s accession process’ to the EU, but it may also lead to ‘a serious crisis on Cyprus, with possible ramifications for the Greek-Turkish relationship.’ In his recent essay ‘Turkish Business and EU Accession,’ published by the Center for European Reform (CER), Sinan Ulgen describes the long road that led to the accession negotiations of Turkey and the positive role of Turkish businesses, which have stood out as steadfast supporters of their country’s EU aspirations. Furthermore, the support of Turkish business for EU accession is likely to remain strong, since the accession process provides a sorely needed external anchor for the modernization and governance of the Turkish economy. However, according to Sinan Ulgen, now that business support is needed more than ever for the Europeanization of the country, there is a risk that it might be waning. Therefore, it must not be taken for granted, since the growing openness and competition caused by EU-led reforms will invariably create losers as well as winners among Turkish companies.
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In your recent essay* published by the Center for European Reform, you stress the fact that Turkey’s political elite and its people are disillusioned with the EU as regards the country’s accession prospects. What should be the next steps from both sides, Brussels and Ankara, in order to give new impetus to the negotiation process? One of the most detrimental dynamics to the full membership process is the sustained rhetoric of a number of European political leaders challenging Turkey’s European credentials. Despite the start of negotiations targeting full membership, these politicians contend that the EU cannot allow Turkey to accede and therefore propose an ill-defined and ill-suited alternative in the form of a privileged partnership. This approach, which stands in stark contrast with the experience of previous enlargements, where the public debate was focused after the start of the negotiations on
Sinan Ulgen interviewed by Vassiliki Nicoloulia
the ‘when’ and not anymore on the ‘if,’ undermines public confidence and support for EU convergence in Turkey. Therefore, European institutions as well as national governments should take more responsibility in communicating with their public opinion about enlargement with a view to build a more solid foundation for what can be considered as the EU’s most successful policy. The EU should also find a way to overcome the economic isolation of Turkish Cypriots and fulfill its promise to Turkey. On the Turkish side, Ankara should strive to find a solution to the ports question, which has led to the partial suspension of the talks. It should also invest much more heavily in a communications campaign, both domestically as well as at the international level, explaining why Turkish accession would be a good thing for both Turkey and Europe.
EU accession The privileged partnership What is your opinion on the proposed privileged partnership between the EU and Turkey instead of full membership? Could such a partnership lead Turkey to Europeanization? The privileged partnership option, as things stand, is a non-starter. The reason is that current proposals foresee the association of Turkey in the EU’s policy areas, be it foreign and security policy, justice and home affairs or economic policies, without granting it the right to influence these policies. In essence, it envisages the EU as the policymaker and Turkey as the policytaker. This is neither an acceptable nor politically sustainable model for a big country like Turkey. It cannot therefore provide an anchor for the Europeanization of Turkey. For the privileged partnership debate to have any meaning for the Turkish side, the thorny question of decision making should be addressed. In other words, the partner should be given a seat at the table where policies are discussed and adopted. The EU, however, seems unable to make a leap of faith in this direction.
The Cyprus issue After the parliamentary and general elections in Turkey, do you think that it will be easier for Ankara to promote the necessary measures requested by Brussels in order to overcome the current suspension of eight chapters of the negotiations? The question of the division of Cyprus is a fundamental problem which is likely to continue to negatively impact Turkey’s accession process. It is now clear to many observers that the EU made a strategic blunder by accepting Cyprus as a full member without a settlement. Equally,
Turkey made a strategic mistake by creating the conditions for the EU to lift the conditionality of the political settlement. Now questions related to Cyprus have acquired the potential to derail the whole process of Turkey’s accession. With Cyprus’s EU membership, these difficulties have extended into other EU policies such as foreign and security policy, as illustrated by the severe problems encountered in the EU-NATO relationship. Now both sides, Turkey and the EU,
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‘Will Turkish business remain enthusiastic about EU membership despite the disillusionment of political leaders and voters? Several factors suggest that business support is likely to remain strong, at least for now. First, Turkish businesses have invested a lot in their pro-EU policies, for example in the form of new representative offices in Brussels and numerous EU-related events and seminars. Second, economic and business links between the EU and Turkey continue to multiply. Since the creation of the customs union, Turkey’s economy has become considerably more open. Exports now account for 32 percent of GDP, a ratio that is higher than those of EU members Spain and Portugal. Over half of Turkey’s exports go to the EU (53 percent of the total), and the EU is the single biggest supplier of imports (43 percent of the total). EU countries are also by far the largest foreign investors in the Turkish economy, accounting for 58 percent of total foreign direct investment (FDI) inflows in 2005. This proportion rose to 91 percent in the first half of 2006. ‘There has been a string of multi-billion dollar acquisitions over the last couple of years, as outside investors have sought to establish a foothold in Turkey’s fast-growing market and take advantage of the business opportunities created by pre-accession reforms. For example, Citigroup bought a 20 percent stake in Akbank, Fortis (a DutchBelgian bank) took over Disbank, the UK’s Vodafone bought mobile operator Telsim, and Oger, a Saudi business group, acquired Turkish Telecom. The sale of Finansbank (a midsized Turkish bank) to the National Bank of Greece is particularly notable. Even a few years ago, a major Greek-Turkish merger would have been inconceivable, given the level of mistrust that used to prevail between Greece and Turkey. Growing trade and investment links have created a new dynamic that will persuade most Turkish businesses that EU accession is central to their interests and needs to continue.’ Sinan Ulgen, ‘Turkish Business and EU Accession,’ published by the Center for European Reform (CER)
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are called upon to manage the process of accession under more volatile conditions. This set of circumstances further compounds an already difficult accession process. The formula to overcome these difficulties is nonetheless very clear. The two sides on the island should be induced to negotiate in good faith and reach a political settlement under the auspices of the UN and based on the Annan plan. In this respect, there is still a lot that Greece can accomplish, in particular by convincing the Papadopoulos government of the benefits for the whole of the wider region of a speedy settlement. The adoption of policies by Ankara designed to overcome the conditions that led to the partial suspension of the negotiations will depend a great deal on the pace of progress achieved as regards the political settlement on Cyprus. This is a structural equation and will not be affected by the outcome of the elections in Turkey.
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Greece has proved that it is a strong supporter of Turkey’s full membership in the EU. However, the rising nationalistic sentiments in Turkey, combined with the secular state and anti-EU forces, may lead to an escalation in tensions between the two countries. Do you think that ultimately this could also lead to a serious crisis in the Aegean or on Cyprus? With the onset of examples like Montenegro and Kosovo, the ill fate of the Annan plan, as well as the lack of progress regarding the question of settlement since the 2004 referendum, the Turkish government is likely to come under increased pressure domestically to switch strategies and start to support a two-state solution on Cyprus. This type of pressure would gain strength especially if Turkey’s path toward EU membership is blocked. Therefore a serious crisis on Cyprus, with possible ramifications for the Greek-Turkish relationship, cannot be definitely ruled out. This danger underscores once more the need to address the problem of the division of the island.
Kurds & the PKK To what extent and how will the possible establishment of a separate state of Kurdistan in northern Iraq influence Ankara’s relations with the EU and the West in general ? The establishment of a separate and independent Kurdish entity in northern Iraq is a cause of concern for Iraq’s neighbors, including Turkey. For Ankara, the issue is also the unwillingness of the political leaders in northern Iraq to deal with the problem of PKK terrorism. This situation may deteriorate with a possible increase in regional tension and violence if the independence option is pursued at all costs by Kurdish leaders. Given the current threat perception of Turkey, Ankara would then give priority to dealing with the adverse consequence of this development. Relations with Europe may then stall, depending on the exact nature of the regional scenario that may unfold and the EU’s policy response.
Center for Economics and Foreign Policy Studies (EDAM) website: www.edam.org.tr
Moderate political Islam, the Although the number of democratic states has risen considerably in recent years, democracy has by no means dominated the sphere of world politics. This point is particularly valid in the Middle East. This region has remained the least affected by the waves of democratization which have reshaped world politics since the end of the Second World War. The Middle East has become a bulwark of authoritarianism, conflict and instability and a breeding ground for terrorism. The recent US military adventure in Iraq, which was touted as the harbinger of democratization in the region, only made things worse. Under these adverse circumstances, the question of how to promote democratic reform in the region remains imperative. The reform agenda The European Union is among the global actors engaged in the promotion of democratization in the Middle East. Under the umbrella of the European Neighborhood Policy (ENP), democratization has become one of the primary strategic objectives of the Union. Yet despite all good intentions, what is missing is robust engagement with domestic political actors
for democratization? By Dr Ioannis N. Grigoriadis
willing to support the reform process. A recent volume edited by Muriel Asseburg — Moderate Islamisten als Reformakteure: Rahmenbedingungen und Programmatischer Wandel (Berlin: Stiftung Wissenschaft und Politik, 2007) — addresses the role of a potential key reform actor in the region. Moderate Islamic political parties have emerged powerful in several Middle Eastern states and attracted global attention due to their reformist political agenda. Asseburg’s edited volume focuses on the cases of Iran, Turkey, Iraq, Algeria, Bahrain, Egypt and the Palestinian Territories. It examines the priorities of moderate Islamic parties and the formation of their reform agenda and explores how these parties are transformed when they gain stakes in the political process, either through parliamentary participation or through government rule. It also scrutinizes the question of whether the integration of Islamists contributes to the stabilization of authoritarianism or paves the way for a more pluralistic, democratic political system. In the volume, it is argued that while moderate Islamic parties usually adopt conservative positions on social issues, they generally support the reform of the political system in the direction of democ-
ratization. Battling corruption, improving political participation, establishing or consolidating the rule of law and protecting fundamental human rights are some of the issues which have formed the core political agenda of several moderate Islamic parties. The increasing influence of liberal democratic political values on the political programs of these parties has been an encouraging domestic political signal regarding the prospects of democratization. The AKP & the EU The case of Turkey is characteristic in that respect. The Justice and Development Party (AKP), a moderate Islamic party which came to power in November 2002, has linked its name with the most profound democratization reform program since the introduction of multiparty politics in 1946. This added to the legitimacy of Turkish political Islam and stabilized the rule of the AKP government. The fact that a party from the periphery of Turkish society with Islamic political origins turned out — in view of Turkey’s prospective EU membership — to contribute to Turkey’s democratization more than the Kemalist guardian elites of Turkey’s Western orien-
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tation is both an historical irony and evidence of the transformative ability of European political institutions. The process of transition The motives of these parties are often doubted by some political analysts. They argue that the commitment of these parties to liberal democratic principles may be thin and of a purely instrumentalist nature. In other words, they may use the rules of the democratic game to ascend to power, but there is no guarantee that they will continue to play by them when they are established. The fear that the hidden Islamist agenda of moderate Islamic parties may emerge as soon as they gain control of their respective states haunts many European political actors and local secular liberal groups. Although these fears may not be completely unrealistic, the experience of recent years has shown that Islamic political parties that have entered the democratic political game by participating in the parliament or the government have tended to moderate their political agenda and adopt more circumspect positions on relations between Islam and the state rather than attempt to precipitate an Islamist takeover. In any case, a process of transition from authoritarianism to democracy cannot be risk-free; many threats may be lurking along the way, and
Islamism is just one among them. Adopting such views precludes the possibility that these parties may be influenced by liberal democratic values and form a synthesis similar to the Christian democratic synthesis, which has become an enduring theme of numerous Western European political systems. The EU & the Middle East The volume comes up with a set of recommendations for the improvement of EU democratization promotion policies in the Middle East. The European Union should aim at the improvement of legal and political institutions that set the framework for the participation of Islamic and non-Islamic actors in the political process. The lifting of states of emergency and the improvement of legislation pertaining to fundamental human rights and political rights are essential for the promotion of domestic political pluralism. Assisting in the organization of free and fair elections and cooperating with democratically elected governments is also of major significance. Finally, European institutions are called upon to establish links with the civil society of Middle Eastern states. Even though the majority of civil society organizations may be of Is-
lamist political orientation, this should not deter European engagement. The aim of this would be the establishment of a dialogue between domestic Islamist and secular actors and European political institutions. Such initiatives could contribute to the elimination of stereotypes and to the better understanding and cooperation of all parties. It is impossible to achieve political liberalization and democratic consolidation without engaging the political forces which have the biggest popular support and often comprise the only alternative form of political organization to authoritarian regimes. The example of Turkey’s AKP can serve as a useful guideline in engaging other Islamic political movements. European institutions need to devise the appropriate sticks and carrots for each state, which will facilitate a reconceptualization of Islamic political identity along liberal democratic lines and the transformation of democratization from an elite issue to a cause that the masses can endorse. Imbuing political Islam with liberal democratic norms is a difficult but not chimerical target for European political institutions. Asseburg’s edited volume provides useful advice in that direction.
Dr Ioannis N. Grigoriadis is assistant professor of political science at the Department of International Relations, Isik University, Istanbul, Turkey. Dr Ioannis N. Grigoriadis’s webpage: www.isikun.edu.tr/~ioannis
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Moscow Moc KBa triangle The Athens AıËÓ· Ankara Ankara There is no doubt that Russia and Turkey are closer right now than they have been since the break-up of the USSR. Economic cooperation has been the vehicle for ongoing improvement in their relations since 2001. Turkish Prime Minister Recep Tayyip Erdogan seems to have his finger on the pulse of the Russian president and his inclination toward improving his country’s economic positions. This explains the well-known trade mission — blitzkrieg might be a more accurate term — of the 600-strong delegation of Turkish business representatives who accompanied Erdogan on his visit to Moscow in 2004. I don’t want to go into figures and data, but we are certainly looking at two large and, to a certain extent, emerging economies; markets that have great potential and need investment and know-how to become more competitive. So there are sectors in which economic cooperation is mutually beneficial, while tourism and suitcase trade play a very significant role in their commercial transactions. The strengthening of economic ties between the two countries has created the need to upgrade — and where needed normalize — their political relations. If the interstate economic relations between these two actors in the international system are upgraded within a long-range perspective — as is the case with the draw-
By Dr Constantinos Filis
ing up of major energy plans — a corresponding balance in the political sector must be struck in order to guarantee the viability of these huge investments. Prospects & obstacles in the energy field The fact that Turkey has become an EastWest energy transit hub — coupled with its control of the Bosporus — has not escaped Russian notice. Nevertheless, the messages sent by Moscow are sometimes ambiguous: — On the one hand, energy giants like Lukoil and Gazprom — along with the political leadership — seem to favor the further deepening of Russian-Turkish energy cooperation, with additional plans for the transport of oil and natural gas through Turkish territory (for example, the proposal for the creation of the Blue Stream 2 gas pipeline), ensuring an enhanced energy and geostrategic role for Ankara in the future. — On the other hand, there is Ankara’s ‘energy pressure’ policy, which controls the
flow of Russian and other tanker traffic through the Bosporus. So Russia, not wanting to find itself at the mercy of the energy and strategic demands of a Turkey that is already the principle southern route for Caspian energy, is seeking alternative transport channels — channels that it presents as supplementary rather than competitive so as not to jeopardize the status of its Bosporus tanker traffic. The prospect of Russian participation in the infrastructure project for the conveyance of energy and water from Turkey to Israel — apart from further consolidating Moscow-Ankara energy cooperation — will undoubtedly have serious political implications. The bottom line still is that, in spite of the intensification in Russian-Turkish energy cooperation, there are clear limits to this development for both sides: Moscow, on the one hand, obviously doesn’t want to see Ankara’s regional role upgraded — based on its growing stake in the energy sector — to the point where this development might grant Turkey even greater independence as an energy player, while Ankara — clearly aware of the fact that Europe’s pursuit of diversification of energy suppliers and its own role as a
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transit hub are comparative advantages that might be utilized vis-a-vis Brussels — certainly will not want to get involved in a lot more projects with Russian participation. Russia-Turkey & the West On another front, the disappointment and concern of both sides at certain recent moves by the West — and the weakening of Western moral universalism, which has undermined the capacity of the West, and the US in particular, to exercise its hegemony — have brought Moscow and Ankara politically and geopolitically closer together. Besides, with the notable exception of the Cyprus issue, the two countries have converging views on certain regional and international issues vital to both of them. Furthermore, Moscow’s seeking to normalize relations with the Muslim world may well be facilitated through Turkey. Moscow and Ankara share a common concern that unilateral US initiatives might compromise their roles and positions, particularly given that at this time Washington’s interests and views on major issues are divergent from those of Moscow and Ankara. At the same time, the fact that the US appears to be bogged down as a result of its own decisions — the salient example, of course, being the situation in Iraq
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— suggests to Moscow and Ankara that Washington may be forced to seek collaboration with them on new terms. This scenario involves US recognition that Russia and Turkey are in a position to help the Americans out of their present impasse — and the closer the Russian-Turkish relationship becomes, the more useful each will appear to Washington. A more-or-less jilted Turkey has realized that it is not welcome in the European Union — at least with the status of full membership — as its size, its Muslim population, and its swagger give rise to considerable concern. With the Turkish Cypriots still isolated, Erdogan seems to have begun to see that the prospect of full membership is dwindling, while the Eastern option is looking more and more attractive. What’s more, the climate in Turkish society and in the two main camps — Islamists and Kemalists, who are otherwise at each other’s throats — seems not to favor a determined opening to the West. The insult that has been added to this injury is that the Iraqi Kurds fit in with the White House’s plans in the Middle East, and are thus considered by the US to be its most vital ally in the region. Apart from creating general concern in the Turkish establishment, this is dampening Ankara’s
aspirations of a more active role in developments in the greater Middle East. Russia, meanwhile, finds itself at odds with the EU, given that: Countries such as Poland and the Baltic states are throwing up an impenetrable psychological wall; Brussels is not acknowledging the overall importance of Russia to European security; and Differences between the two sides on the issues of energy and democracy seem, for the time being, irreconcilable. And the situation is hardly better with regard to the US, not least because Washington refuses to acknowledge Russian sensitivities and does not consult Moscow when engaged in the post-Soviet space. Consequently, in the minds of Russian Eurasianists, China is the key to containing the US in Central Asia, while Turkey and Iran can play a correspondingly important role in the Middle East and Black Sea regions respectively. This scheme seems premature, not least for the fact that Beijing, Ankara, and Tehran are also potential competitors for Russia. Moreover, the idea of Eurasianism in the minds of the Turkish political and military elite is quite new — it lacks a historically grounded basis as is the case with Russia — and at the same time does not have, at present, a lot of supporters. It is difficult, however, to estimate whether this idea might gradually become more attractive for Ankara, especially if Turkey contin-
ues finding itself at odds with the West. In the final analysis, both Ankara and Moscow want their Western partners to perceive them, on the one hand, as independent players with their own interests to defend if need be, and, on the other, as being useful to the West in the handling of critical international issues. This is also accentuated by the their feeling of being hemmed in — or at least of the likelihood of their role gradually being marginalized — as a result of the choices made by the West: For Turkey the key is Romania, Bulgaria, Ukraine — in the future — and the status of the Kurds in northern Iraq, while for Russia it is the recent color revolutions that have taken place in the post-Soviet space. Constraints on the Russian-Turkish relationship Still, both Turkey and Russia need Washington — and perhaps Brussels — more than they need each other, and since to an extent it is their common disappointment by the West to blame for their recent rapprochement, this puts some constraints on their political dialogue. Other inhibiting factors include: A persisting, historically grounded suspiciousness in sectors of the political and military establishment; Turkey’s stance on pro-US regimes within the post-Soviet space — such as that of Mikheil Saakashvili in Georgia or Ilham Aliyev in Azerbaijan — given that a show of support to such govern-
ments would not be taken well by Moscow. It should be noted, however, that Ankara has kept a safe distance from the so-called color revolutions; Potential disagreements over Ankara’s policy on tankers passing through the Bosporus; The prospect of becoming competitors in the energy market — bear in mind that the only pipeline bypassing Russia runs through Turkey and that the latter has a crucial role to play in Europe’s quest for energy diversification — particularly if Iran emerges from its international isolation; The rise of nationalism and the existence of a marked anti-Islamic trend in Russia, although this seems not to affect Turkish business; The Chechen issue, though the recent, if somewhat stagy, normalization of the situation reduces the likelihood of this playing any role; And, last but not least, the Cyprus issue and Moscow’s consistent stance — with the exception of two slips of Putin’s tongue — in favor of Greek and Greek-Cypriot positions.
The principles & the values Ironically, it appears that factors limiting Greece’s cooperation with Russia create potential for Turkish-Russian cooperation, and vice versa. Discouraging the possibility of closer cooperation with Russia is a deepseated feeling among the political elite in Athens that the institutions and mechanisms — the principles and values — of the West are one and the same with our country’s course. In contrast, Turkey’s psychological trauma regarding the West seems to be leading in the direction of a possible revision of two of the basic pillars of Ankara’s foreign policy, the longest-standing of which is its strategic relationship with the US, and the most recent one being its accession to the European family. Given these deep-seated feelings in Athens, any departure from the doctrine of ‘We belong to the West’ would require a fundamental revision of many of the givens in Greek policy. And, of course, at this time there is no good reason for such a revision. But this leaves us little room for maneuver. Our Western partners take us for granted to a considerable degree, which renders any prospect of our proceeding to a significant opening toward Russia more intimidating because we would risk incurring our Western partners’ ire at a time when our voice on the international stage is fad-
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ing deeper into the chorus. And we should bear in mind here that some of Russia’s recent moves have given rise to increased concern in Western circles; Western circles that have a tendency even in the most innocuous of circumstances to be wary of Moscow’s intentions. However, the upgrading of political and economic dialogue with Russia is in the interest of Greece, which, as a full member of the European Union, can exploit the fact that the EU has no comprehensive, clear and unified policy on Russia. In this way, Athens might prove to be one of Moscow’s most constructive partners — along the lines of Italy — within the Euro-Atlantic structures. Athens could also show greater interest in and sensitivity toward Russian issues (such as the handling of the Russian minority in Latvia), proving useful by listening to Russian concerns and, more importantly, voicing them in the EU and NATO, and in return receiving Russian support on issues of interest to Greece — mainly the Cyprus issue. That is, Greece could build a more stable and substantial relationship with Russia, rather than petitioning Moscow only in times of need. I suggest that Athens should pursue a relationship with Moscow that is not filtered through Greek-Turkish competition or conflict — not a zero-sum game but a win-win situation instead — a relationship in which Moscow sees Athens on its own merits; that
is, its extensive and highly developed Balkan economic and trade network, which can facilitate Russian-Greek joint ventures throughout the region, particularly given that Greece is a welcome partner where Russia might be met with less than open arms. Turkey & the Muslim world Turkey, for its part — though a NATO member and a strategic ally of the US for a number of years — currently seems to have more latitude for maneuvering: 1. due to its position in the Muslim world, which gives it a say and a role within the framework of the interfaith conflict and the global war on terrorism; 2. it is aware that it has a role to play in the Middle East and particularly in the West’s energy security; and 3. because its leadership, having garnered the necessary domestic support, plays tough with the US administration. That said, Athens-Moscow relations — despite having undergone no significant change for a long period of time; no positive development — are discernable for their trusting nature, evidenced by the defense cooperation between the two sides; cooperation that has given rise to Russian expectations that Greece is not necessarily in a position to meet. Therefore, if the ongoing Russian-Turkish military cooperation takes the shape of a serious project, this will be a major
psychological blow for Greece, especially if this has an effect on the military balance in the Aegean (not very possible, at least in the short term). Finally, we need to bear in mind that developing closer ties between Moscow and Ankara is mainly a result of the goal to proliferate economic cooperation (trade turnover from $8 billion in 2004 is estimated to reach $30 billion in 2010); furthermore, the recent rapprochement has become reality due to both states’ common disappointment and concern over Western actions, as well as the need to remind their Western partners of their strategic importance, which, in their assessment, increases the closer the RussianTurkish relationship becomes. Whether the emerging atmosphere will endure depends on several factors and not necessarily on the two states’ good will to preserve the recent dynamic in their contacts. In any case, Greece has to be vigilant and try to become more practical in its dealings with the pragmatic Russian administration. Doing business with the sober Putin presupposes a lesser reliance on what used to unite our countries in the distant past, such as traditional religious bonds, and a greater emphasis on developing our relationship into something palpable, putting economic considerations at the top of our bilateral agenda. Dr Constantinos Filis is head of the Russia and Eurasia Center, Institute of International Relations, Panteion University, Athens. Russia and Eurasia Center website: www.cere.gr
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Complementary bilateral relations This article will first give an overview of the evolving trade relationship between Turkey and Greece and study the factors behind Turkey’s exports being in surplus. The Greek potential for investing in Turkey will also be examined, in the context of the reforms that have taken place in Greece in the last decade. What deeper causes might lie behind what is seen as Greece and Turkey’s complementary bilateral relationship? This writer believes that they are profoundly political, while some have their origin in the two countries’ — one hopes — past adversarial relationship. The article will conclude with an assessment of how the economic relationship of the two countries is likely to evolve in the future in the context of Turkey’s ongoing European Union accession process. Trade The volume of bilateral trade between the two neighbors has been on an upward trajectory since the 2001 economic crisis in Turkey. Greek exports of goods to Turkey have recorded an impressive average annual growth rate of around 18 percent over the past five years, reaching 5.4 percent of total Greek exports. In turn, Turkey’s exports to Greece have posted a robust average annual growth rate of 14 percent during the past four years, reaching 1 billion euros, though
still comprising only a small share of total Turkish exports. This positive trend is set to continue in the coming years. Turkish exports have enjoyed a notably consistent surplus in value ranging from 30 to 40 percent over Greek exports during this period. Indicatively, in value terms, Greek exports in 2005 to Turkey stood at 67 percent of Turkish exports to Greece. There are structural reasons for Turkey exporting more to Greece and these will continue to be felt in the years ahead. As seen in the table 1, the contribution of manufacturing to GDP is significantly higher in the case of Turkey than in the case of Greece, and The structure of GDP in Greece and Turkey Structure of output Agriculture Industry Services Total
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1
Greece 1980 1997
Turkey 1980 1997
14 25 61 100
26 23 51 100
11 18 71 100
15 28 57 100
Turkey’s GDP is larger than Greece’s. A more detailed analysis of the top 12 export categories of the two countries in their bilateral trade in 2005 also demonstrates this point. Generally speaking, Greek exports consist of commodities with a low value-added component. By contrast, Turkish exports are much more diversified manufactured goods with a higher value-added component. Cars, for instance, were the third top Turkish export category in 2005
By Antonis Kamaras
— indicatively they account for 15 percent of total Turkish exports. Greece has no car manufacturing industry. Investments Should a structural Turkish surplus in bilateral trade be a source of concern from a Greek viewpoint? Probably not. Our economies are deeply complementary, but we have to adopt a longer-term perspective — let’s say five or 10 years from now — to allow this complementarity to demonstrate itself. As seen in Table 1, Greece’s economy is highly service-oriented. Crucially, the Greek market reforms of the 1990s, together with the country’s entry to the European Monetary Union (EMU), for the sake of which they were largely undertaken, have modernized the service economy and helped it grow. Graph 1, which shows falling and stable interest rates in Greece, in comparison to the much greater volatility of interest rates elsewhere in the region, is highly illustrative. In banking, for instance — the service sector activity par excellence — macroeconomic stability in Greece has enabled the country’s financial institutions to grow and acquire know-how in activities such as mortgage finance and asset management — something that would not have been possible in a highinterest-rate, high-inflation environment. Additionally, Greece’s reforms and macroeconomic stabilization have com-
economy & market
Greek exports to Turkey Jan-Nov 2005 12 most valuable export categories
pelled Greek companies to achieve, from a global point of view, adequate levels of corporate governance. More specifically, the process of entering the EMU has (i) strengthened the credibility and efficacy of Greek regulatory institutions, such as the central bank, whose job is to supervise and police corporate behavior, and (ii) it has stabilized Greece’s economy and helped it to grow. Both these factors have attracted institutional investors from abroad to Greece’s major companies. Foreign institutional investors, in a virtuous cycle, have provided a strong motive for Greek companies to improve their corporate governance structures. This can be seen in Graph 2, according to which Greece has the best corporate governance in Southeastern Europe. Greece’s superior corporate governance is also reflected in the status of the Athens Stock Exchange (ATHEX), which today is the only stock exchange in the region that belongs to the developed markets category as opposed to that of emerging markets. The ATHEX’s developed market status means Greek companies have the essentially enhanced capacity to source funds from international investors to finance their operations, whether in Greece or in the broader region. Indeed, if we look at the companies included in the FTSE/ATHEX 20 Index — basically the top 20 Greek companies — we see in their ranks the major beneficiaries of the twin processes of macroeconomic stabilization and microeconomic reform. Some of these top 20 Greek firms have benefited from the government’s privatization effort, which
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Description Total Fuels/Oil Plastics Heating appliances, machinery Cotton Clay products Paper products Leather products Steel & iron products Wood products Textiles Tobacco Paints Total of 12 categories Other products Total
TABLE
2
Value in euros 483,553,681 276,824,818 91,835,983 22,299,244 18,085,289 15,632,112 11,482,564 10,524,038 8,462,730 8,854,968 7,426,582 6,397,313 5,728,060 483,553,681 89,346,319 572,900,000
% of total 84.38 48.30 16.02 3.89 3.15 2.72 2.00 1.83 1.47 1.54 1.29 1.11 0.99 84.38 15.61 100.00
Turkish exports to Greece Jan-Nov 2005 12 most valuable export categories Description Total Steel & iron Machinery, heating & other appliances Cars TVs & other appliances Metal machinery Textiles Plastics Clothing Furniture items Fruit & vegetables Other clothing Total of 12 categories Other products Total
has emancipated them from state control. All of them have benefited from low inflation, which has made investment in capital markets more attractive by (i) boosting eco-
TABLE
3
Value in euros 557,455,108 101,141,353 68,473,399 65,895,966 61,706,810 59,511,584 48,637,146 33,047,696 27,096,043 31,622,188 26,086,050 23,125,984 557,455,108 293,994,892 851,450,000
% of total 65.45 11.87 7.73 7.73 7.24 6.98 5.71 3.66 3.18 3.71 3.06 2.71 65.45 34.52 100.00
nomic growth, and thus improving the prospects of listed companies, and (ii) correspondingly diminishing the attraction of investing in government bonds, the yields of which fall in tandem with inflation. It is no coincidence that these companies have employed their funding capacity in their regional expansion, in this way making Greece the
GRAPH
1
leading foreign direct investor in the Balkans. It is this lead in macroeconomic stabilization and reform, in a regional context, that created the conditions for Greece’s EFG Eurobank-Ergasias to acquire Bulgaria’s Post Bank, and not vice versa, or, in the Turkish context, that people are talking about Greek lottery and gaming firm OPAP as a potential investor in the Turkish state lottery, Milli Piyango, and not the other way round.
Looking back to decipher the future I would like now to speculate briefly on the complementarities of Greece and Turkey. Understanding how these two economies have evolved differently is revealing from an analytical point of view. It is also useful in a practical sense, as it can help one to grasp how the differences that have accumulated in their respective political economies in the past will shape their economic relationship in the future. These remarks are speculative, provisional and only indicative in nature. However, even if they are wide off the mark, I believe it is in that direction that research
must be channeled in the years ahead: which is to say in the direction of understanding how past choices will shape future interaction in the economic relationship between Turkey and Greece. In manufacturing one can see in Turkey the enduring determination, at the national, collective level, for the country to acquire an industrial capacity which would be indigenously owned and worthy of a modern nation. It was no coincidence that when Sakip Sabanci, the patriarch of one of Turkey’s largest industrial conglomerates, died he received a state funeral. He was accorded that honor because he was widely perceived as having fulfilled the aspiration that Turkey can stand on its own two feet and compete with the best of them. In that respect, he and people like him can be considered cobuilders of the Turkish Republic. Having said that, this status of indigenous entrepreneurship in Turkey has legitimized a level of state support and a bias in favor of ownership and management, as opposed to labor, which in Greece, at least post1975, have never been acceptable. In fact, Greece’s entry into the European Community, and the accelerated competition that this entailed with the lifting of import tariffs, was accompanied in the 1980s by the introduction of one of the most restrictive labor law regimes in Europe. So when we look at these GDP composition trends or the trade statistics, we are not just looking at cars and refrig-
economy & market
erators, cotton and lubricants, we are also looking at two distinct political traditions. On the other hand, Turkey’s determination to maintain an arms-length relationship with foreign capital, assisted by the benefits of its geopolitical position, particularly in its relationship with the United States and the International Monetary Fund, has often delayed wider reform and made the country at times a less-than-determined EU candidate. This has resulted in macroeconomic volatility and a lower rate of economic growth than the country is capable of achieving. By contrast, the Greek political leadership has had greater strategic foresight with regard to the EU. This has coincided with some of the less fortunate events which have characterized the relationship between the two countries. Cyprus in 1974 and the more recent crisis, in 1996, over a now very well-known little Aegean island, Imia, demonstrated to Greece’s leaders that the country must compensate for its smaller size and less important geopolitical role by anchoring itself to Europe. The huge side benefit to this has been that, at critical junctures, Greece has consolidated its modernization in a way that Turkey has not. Indeed, it would be difficult to account for Greece’s early and determined pursuit of EU entry, a country on the periphery of Europe, without taking into account the country’s adversarial relationship with Turkey in the postwar era. Greek political leaders have been able to overcome protectionist and parochial senti-
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GRAPH
2
ments, which are no less prevalent in Greece than in Turkey, at least partly because of Greece’s crisis-prone relationship with Turkey — the first time this contributed to our entry into the EU proper and the second it gave a powerful boost to our EMU entry. This has led to the consolidation of democratic life, the modernization of regulatory
institutions and, lately, to the stabilization of the economy in Greece. Again, as with Turkish manufacturing, when we observe assertive Greek banks expanding their presence in the Balkans, we must go beyond corporate strategy. We must take into account how Greek policymakers have used the EU anchor to strengthen Greek institutions and these institutions in
Companies in the FTSE/ATHEX 20 Index which have become significant investors in Central Eastern Europe
TABLE
4
Alpha Bank EFG Eurobank-Ergasias Emporiki Bank* Pireaus Bank* National Bank of Greece* Germanos* Hellenic Duty Free* OTE Cosmote Intracom Coca-Cola HBC Titan Cement Hellenic Petroleum* Viohalco *those companies have been subject to the government’s disposal effort
Companies in the FTSE/ATHEX 20 Index which have accessed the capital markets in the context of the government’s privatization program Emporiki Bank National Bank of Greece ATEbank Hellenic Duty Free OTE Cosmote Public Power Corporation OPAP Hellenic Petroleum
turn have, by and large, protected the integrity of Greece’s financial markets. Regulatory performance has also been strengthened by democratization. The Bank of Crete scandal in Greece contributed to the fall of an elected government and strengthened regulatory oversight by the central bank. The Bank of Greece itself became independ-
ent in the 90s, in conformity with EU requirements and the country’s pursuit of EMU entry. Entry into the EMU has also enabled Greece to attain a much more productive relationship with its expatriate element. In particular, EMU-driven reforms in telecoms and in banking have put in place the necessary infrastructure for Greek-owned shipping, the largest fleet in the world, to repatriate itself in Piraeus and in Athens. This has boosted the critical services component of our economy in shipping itself as well as through investments of the surplus cash of Greek shipping in banking and real estate in Greece and, increasingly, in the wider region. In that respect the deeply political choice of EU membership has over time helped reassert deep, centuries-long undercurrents in Greek economic life. So what lies ahead? My prediction is that if Turkey sustains its EU accession process, that will polarize the two countries’ complementarities — that is to say, Turkey will be exporting to Greece an ever rising amount of goods and Greece will be exporting to Turkey, as an investor, an ever rising amount of capital. A durable EU accession process would probably entrench low inflation in Turkey. That would give Turkish manufacturing a much more stable planning outlook and the cheaper funding it needs for its capital expenditures. The country’s already solid manufacturing base will be upgraded as a result and its exporting capabilities greatly
strengthened. This same scenario — of a durable EU accession process — would also mean a more effective privatization program due to the enhanced legitimacy of the Turkish government and the greater attraction of Turkey to foreign direct investors. Turkish conglomerates in a low-inflation environment would also be compelled to rationalize and dispose of non-core activities, which would also present investment opportunities to investors from abroad. Greek investors, in turn, are well prepared, due to their solid capitalization, their decade-long experience of internationalization in the Balkans and the country’s inherently superior affinity to the Turkish environment, compared to that of other foreign entities, to take advantage of the opportunities that will be made available. More specifically, Greek companies in services have the capital that is currently unavailable in Turkey and the know-how that Greece’s higher per capita income and more stable economy have brought into being. I believe that for the more extrovert Greek companies, Turkey, in the context of its EU accession, will be seen as one of their major strategic opportunities, if not the main one.
Antonis Kamaras worked in Istanbul in the financial sector from 2003 to 2006. He is currently pursuing a PhD degree at the London School of Economics on the impact of Greece’s and Turkey’s corporate elites on the foreign policies of the two countries. Antonis Kamaras’s e-mail: A.Kamaras@lse.ac.uk
economy & market
ãDolce` Yorgos Ioannidis
On February 1, 2007, Yorgos Ioannidis assumed the position of chief executive officer of Romtelecom, OTE’s 54.01 percent-owned incumbent telecom operator in Romania. After the announcement of the positive financial results of 2006, Ioannidis stated that Romtelecom will continue the investments (200 million euros in 2006 alone) and will focus on much higher ADSL and digital TV sales in 2007, aiming at replacing revenues lost following the decrease in the number of fixed telephony clients.
Western companies have already shown a strong interest in the region of Southeast Europe since Romania’s and Bulgaria’s entry into the European Union and some have already made a start with mergers and takeovers. Will Romtelecom take on this challenge, or does it intend to follow a different strategy? In Romania, the face of the telecom market completely changed after its liberalization in January 2003. Beginning that year, Romtelecom lost its monopoly over fixed telephony and started to come up against a powerful wave of competition. That was the turning point for Romtelecom in becoming the real brand that it is today: The
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liberalization meant the first real challenge in Romtelecom’s history, forcing the company to reinvent itself. Today, Romtelecom is a top telecom company in Romania and many of those who never thought this company could make it in this new era now admit that Romtelecom has succeeded in proving itself a model for ambition, perseverance and intuition of new market trends. But the battle for the future of Romtelecom is only just starting, as fixed telephony is no longer a prime interest for clients. The company has to position itself in new markets, such as broadband internet and digital television. Clients are expecting much more from their telephone line: broadband internet, interactive and multimedia content and new services. Therefore, Romtelecom is once again reinventing itself and transforming into a multiservices and multi-technologies provider. It’s a process that has already started producing results, with 30,000 people opting for the new digital television Dolce every month and a ten-fold increase, year-onyear, in the number of broadband internet users. Romtelecom is also expanding in the content area with innovative projects. The latest service launched on the Romanian market is MTV On Demand, the first personalized music television not only in Romania, but also in the whole of Eastern Europe.
interviewed by Dimitris Pappas
Lately, Romtelecom has been investing in new products and has developed its infrastructure, for example with fiber-optic systems. Could you give us some figures and let us in on the company's future plans? The launch of new services such as highspeed internet through ADSL and digital television was only possible following extensive investments in the network and business processes. In the last three years the company invested almost half a billion euros, of which 200 million euros was invested in 2006 alone. The investments will continue in the years to come, as the solid infrastructure has to be conserved as one of the main comparative advantages of Romtelecom. In 2007, investments in the network will continue in order to allow the best provision of broadband services. Romtelecom’s network will be entirely digitalized this year, and a high-capacity system will be deployed all over the country, establishing thus the digital highways of Romania. We expect to see data traffic increase by over 40 percent, compared to 25 percent in 2006, which is in line with the company’s strategy to extensively develop alternative services to fixed telephony services. During the next year the company intends to launch IPTV as a complementary service to its digital satellite TV service Dolce. IPTV
digital Romania has been very well received by clients, who get to have better control over the content they watch. We expect Romanians to adopt the interactivity provided by this service.
The new total digital television Dolce seems to be a great success, according to the figures so far — more than 60,000 subscribers — wouldn’t you agree? Romtelecom entered the digital television market at the end of November 2006, under the new Dolce brand and just two months after its launch the new service had over 60,000 clients. By April, it had reached 150,000 active customers. We convinced the clients by offering them the best price-quality rapport on the market and a digital alternative to the existing cable TV services. The latest digital technologies available were deployed for this new service, with an investment of 15 million euros for the launch of Dolce.
At the end of 2006, ADSL subscribers amounted to 100,000, compared to only 12,000 at the beginning of the same year. Is there a product that could be described as the pillar of the company? Internet and data services indeed constitute a pillar of the company, one that will allow for the more aggressive development of content products in the future.
The number of ADSL subscribers increased almost ten-fold from the end of 2005 to the end of 2006, and reached 150,000 in April 2007. This increase is also seen in the growth of revenues generated by internet services — for example, an increase of 145 percent in the fourth quarter of 2006 in comparison with the same period of 2005. All the new products launched or soon to be launched (we also own Cyber Host, the safest and technologically most advanced data center in Romania) can be considered pillars for the future of the company. Also fixed telephony, Romtelecom’s traditional service, is being taken care of, with new offers and benefits for customers.
What qualities define the leader in the telecommunications field? What characteristics should a company have? What investments should it make and how competitive should it be in order to maintain its status in the field? Clients matter the most. It’s the customer’s experience that defines the leader of a market. Clients and their interests, clients and their perceptions, clients and their preferences. I truly believe that the needs of customers should lead companies’ strategic plans. However, we have to proceed swiftly and with concrete plans which will change the look and feel of the company as quickly as possible. People today are increasingly seeking out services that are simple, user-friendly and that they are comfortable with — so you have to give them the best payment meth-
ods, the fastest answers to their questions and orders, and sincere, quick and friendly customer support. It is the soft side of the most technologies-intensive companies that in the end makes the difference between providers. Because from the technological point of view it is clear: All providers invest in broadband and content.
How is the company ensuring its future in the field? What are your hopes and expectations for Romtelecom’s future? During the last years, Romtelecom has recruited a significant number of young people, who are full of energy, new ideas and ambition for success. It is them and those who join us in the years to come who will ensure the future of the company and who will bring into the company the fresh air of customer orientation. ‘Customer First’ is the code name of the most important project that we have launched recently within the company. They are the ones who will exploit the unparalleled features of Romtelecom’s infrastructure and digital networks and amalgamate these with our customer-centric approach. Romtelecom is changing together with Romania; Romtelecom is improving together with Romania and I am sure the company will soon be the best-quality multimedia services provider in the country, serving the consumer and the business sector.
Romtelecom website: www.romtelecom.ro/
market
Compiled by Dimitris Pappas
market view
Joining trading forces The Hellenic Exchanges (HELEX) group has already expressed its interest in buying 44 percent of Bulgarian Stock Exchange (BSE) shares. Earlier this year the president of the Athens Stock Exchange (ATHEX) and chief executive of Hellenic Exchanges, Spyros Kapralos, presented to the BSE in Sofia the common trading platform between the ATHEX and the Cypriot Stock Exchange, along with the results of their recent cooperation. Kapralos noted that ‘the BSE should cooperate with the Cypriot and Athens exchanges and others in the region to create a regional hub for Southeast Europe.’ Bulgarian Stock Exchange He added that the Bulgarian state had expressed its intention to privatize the Bulgarian Stock Exchange and ‘we would like to express our interest in offering a fair price to buy shares from all shareholders willing to sell.’ But Kapralos stressed that an ‘equity participation of Hellenic Exchanges and
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possibly the Cyprus Stock Exchange in the BSE is not a prerequisite for our cooperation.’ He pointed out that the BSE will continue to serve its listed companies, its members and its investors. ‘In order to compete effectively in this global environment, we look toward establishing a regional emerging market in Southeastern Europe highly visible to the international investment community and thereby attracting liquidity. This, however, can only be attained by joining forces between our exchanges. We hope that Bulgaria will also join its forces for our mutual benefit.’ In the case of the collaboration of both stock exchanges, the members of the BSE will benefit from the lower cost and the better quality of communications, but mainly from the interest which will be expressed by big investment companies from all over the world, which, as Kapralos indicated, are already active in Greece through the ATHEX. A realistic proposal Comparing the other proposals which have been made, Kapralos characterizes the Greek one as the most realistic. The president of the ATHEX is optimistic that the Bulgarians will be convinced to join forces with the Greeks in a decision which will be profitable and will allow them to
maintain their independence. He added that other favorable points include the fact that numerous Greek enterprises currently operate in Bulgaria as well as that the cooperation between Athens and Sofia following the accession of Greece’s northern neighbor to the EU strengthens economic ties between the two nations. The founder and chairman of the BSE, Viktor Papazov, noted the ‘rapid developments which change the international capital market in a dramatic way,’ giving as examples the recent repurchase of Euronext, which includes a certain number of European stock exchanges and the intense interest that the NASDAQ is expressing for the acquisition of the London Stock Exchange. BICA Recently, the Bulgarian Industrial Commercial Association (BICA) said that a potential buyer of the Bulgarian Stock Exchange should have a market capitaliza-
market view The West returns to Egypt tion and annual turnover of at least 500 billion euros. BICA suggests the government should not sell the BSE just for any price. Despite the impressive results seen in the past few years, the Bulgarian capital market remains small and is not that attractive to major investors, as mentioned in BICA’s statement. Meanwhile, Ludwik Sobolewski, president of the management board of the Warsaw Stock Exchange (WSE), said that they were ready to buy all or part of the state-owned 44 percent stake in the BSE. Another option being considered by the WSE, he added, was setting up a regional stock exchange along with the BSE. The BSE’s market capitalization rose by 103.7 percent year-on-year to US$26 billion in 2006. The market capitalization of the WSE grew by 58.9 percent to US$119 billion in the same period. HELEX and WSE have joined a list of candidates expected to bid for the BSE that includes Scandinavia’s OMX, Germany’s Deutsche Boerse and Italy’s Borsa Italiana.
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Over the last couple of years more and more Westerners have been choosing Egypt as a holiday destination. The land of the Pyramids succeeded in attracting 9,082,000 visitors in 2006, a 5.5 percent increase over the 8.7 million who traveled there the previous year. The most remarkable aspect is the return of the Americans, whose numbers soared to 228,165 in 2006, a 16 percent increase over the 195,800 visitors from the US in 2005. British tourists held first place (1,033,000 visitors), while Russia remained in second place for the second year in a row, with 998,000 visitors. In third place, Germany’s 966,000 visitors showed a slight 1.4 percent decrease from 2005, when they held the top spot. Italy ranked fourth, the same as the previous year, with 786,000 visitors. The rest of the top 10 countries include France, with 372,000 visitors, and the US, in sixth place. In 2006, one in 10 UK holidaymakers opted to stay at one resort, the Red Sea’s premier leisure destination El Gouna. Sharm El Sheikh and Hurghada were most popular with Russian tourists. ‘We were very pleased by the 16 percent increase in American travelers in 2006,’ said Ayden Nour, consul-director of USA & Latin America for the Egyptian Tourist Authority. ‘In 2007, we anticipate beating the 2000 record of 235,000 visitors.’
The revenues He noted that the average stay lengthened slightly to 8.3 nights from 8.2 nights in 2005. Revenues from tourism, meanwhile, amounted to US$7.6 billion for the year, an increase of 11.8 percent over 2005. Chairman of the Egyptian Tourism Authority Ahmed El Khadem stated: ‘I am pleased to see that world travelers continue to recognize the many diverse and beautiful treasures that can be found in Egypt. People are coming not only for firsttime visits, to see our world-renowned sights, but also for repeat stays to enjoy another helping of our year-round sunshine and our wonderful beaches and resorts.’ Despite the deadly bombings in the Sinai Peninsula last year, Egypt’s tourism industry made a quick recovery. The country had a total of almost 220,000 hotel rooms in 2006 and expects to have a million new visitors this year, which will lead to the creation of 200,000 new jobs.
Sources: www.etf.org.eg / www.prweb.com
market view The Silk Road redux In the next two decades Turkey is expected to show an important increase in its merchandising activity. The construction of an ambitious project, the Kars-Akhalkalaki-Tbilisi-Baku railway, will strengthen Turkey’s strategic position in the world and will turn the country into a rail corridor between Europe and Asia. On February 7, Turkish Prime Minister Recep Tayyip Erdogan, President of Azerbaijan Ilham Aliyev and Georgian President Mikhail Saakashvili signed a package of agreements for the project, which will link Turkey, Azerbaijan and Georgia via a 258-kilometer railway. The project is a big step toward the improvement of the transport infrastructure that will lead to the restoration of the historical Silk Road. Furthermore, it will boost trade between Europe, the Caucasus and Asia. Some observers have remarked that upon completion it could become a competitor to the Trans-Siberian Railway.
The timetable Construction will start in June 2007 and is scheduled to finish at the end of 2008. Estimates set the cost of constructing the missing 102-kilometer section of the Kars-Akhalkalaki-Tbilisi-Baku railway at approximately 322 million euros and indicate it will raise the trade turnover by rail to 15-20 million tons per year. In Georgia the project will involve construction of a new 29-kilometer stretch of railway and the repair of an 183-kilometer section. In Turkey a 76-kilometer stretch will be built from scratch. The three sides agreed that Azerbaijan will loan Georgia 200 million dollars for the construction of the railway. The United States, an influ-
ential backer of similar projects such as the Baku-Ceyhan oil pipeline and the South Caucasus gas pipeline, does not support the project, since it excludes Armenia. The European Union has also announced that it will not provide any financing for the rail link. In order for Armenia to be a part of this project, it would need to meet two conditions — the opening of the borders with Turkey, which were closed in 1993, and its withdrawal from the region of Nagorno-Karabakh. London-China non-stop The project will be connected to the Marmaray Project, the undersea railway link in the Bosporus which is due for completion by 2008. At the end of construction, trains departing from London will be able to reach China via Turkey non-stop. Turkey first proposed the project in 1993 as it looked for ways to increase its influence in the South Caucasus after the collapse of the Soviet Union. However, the protocol on the project wasn’t signed between Turkey, Georgia and Azerbaijan until 2004. Feasibility studies began the same year. In May 2005, the presidents of the three countries reaffirmed their support for the railway with a formal declaration in Baku. Georgian President Mikheil Saakashvili described the Kars-Akhalkalaki-Tbilisi-Baku railroad project as a ‘momentous geopolitical breakthrough’ after negotiating with visiting Turkish and Azerbaijani leaders in February. He underlined that this new regional railway link between Asia and Europe will become ‘a modern version of the new Silk Road.’ A geopolitical revolution Speaking at a joint news conference, Saakashvili said, ‘This is a project that will lead to a geopolitical revolution in our region because this will be a new line that will connect not only our three countries, but will also interlink the Asian and European regions with each other.’ The project, which he said would cost ‘several hundreds of millions’ of US dollars, will bring ‘several hundreds of billions’ in revenues. Sources: www.reuters.com / www.civil.ge/eng
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market view Romanian ancestry tourism
Olive trees in Croatia
Genealogical tourism is blossoming in Romania, where an increasing number of travel agents are including packages in their services for those who want to trace their roots. Genealogy is the study and tracing of family histories. This involves the collection of the names of relatives, both living and deceased, which leads to the creation of a family tree. Also known as roots or ancestry tourism, the phenomenon is now providing Romanian travel agents with the opportunity to garner new business in a field which has been winning thousands of fans in other countries for some years now.
The Croatian government is seeking to expand its olive groves and vineyards in order to increase agricultural exports in this country which has witnessed the disappearance of much of these crops since the end of the 19th century. Prime Minister Ivo Sanader told the government that the operational program to raise permanent plantations over the last three years had increased olive groves by 40,000 acres and olive oil output from 42,000 hectoliters in 2004 to 58,000 in 2006. ‘Before joining the European Union we wish to cultivate, with the state’s support, as many vineyards and olive groves as possible,’ Sanader said, urging all coastal areas to take part in the establishment of permanent plantations with favorable assistance through the Croatian Bank for Reconstruction and Development and the Croatian Agency for Small Business. Recent years have seen an increase in Croatia’s agricultural exports, a good sign that the country has been paying attention to the development of agribusiness. According to Deputy Prime Minister Damir Polancec, Croatia’s agricultural exports exceeded US$1 billion for the first time in 2006, reaching US$1.6 billion, while state subsidies amounted to 2.8 billion kuna, or approximately US$490 million. Three years ago the export-import ratio in the agriculture sector stood at less than 50 percent; last year, however, this figure had improved to 65 percent. In 2007 the export-import ratio is expected to have been boosted to 70-75 percent, Polancec said, adding that state subsidies in 2007 would be about 80 percent higher than in 2000.
The emigrants Among the millions of people that emigrated from Central and Eastern Europe to the United States and Canada at the end of 19th century and the beginning of the 20th, there were also hundreds of thousands of Romanians. A new wave of emigration began in the late 1940s, when communism took control of the greater part of Eastern Europe. Today, many descendants of those emigants, scattered around various parts of the globe, want to get back to their roots and find out about the history of their ancestors, as well as to locate long-lost relatives. State files of births, deaths and marriages, as well as other vital information needed to create a family tree, are kept in the National Archives of Romania and are at the disposal of the researchers. Documents that were issued in or before 1890 can be found in the National Archives (Directia Judeteana a Arhivelor Nationale), while those issued after that year are located in the civilian records sections of town halls. The cost When searching for records it is helpful to know the name of the town or village in which the document was issued or the event (birth, marriage, death) that occurred, as well as the approximate date. The staff of the National Archives help those interested in genealogy searches by providing a wide range of services, from making photocopies of desired records to conducting research on a specific topic. Services provided by archives are subject to a small fee, currently about 11 euro cents for a photocopy and about 15 euros or more for a specified search. Local travel agencies usually have good contacts in the community and can assist those interested in their family histories by providing translation services, arranging appointments with the staff at the archives and any other formality. Source: www.romaniatourism.com
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Sources: www.hina.hr / www.vlada.hr
The most important public projects
PUBLI
Hellenic Plan for the Economic Reconstruction of the Balkans (HiDERB)
market view Privatizing power plants In May or June 2007 the privatization of three energy plants in southern Romania is scheduled to start. The country’s minister of economy and commerce, Varujan Vosganian, announced that the privatization of the thermal power stations in Craiova, Turceni and Rovinari will start after the completion of the energy strategy process. ‘The privatization process of the energy plants will start immediately after working out the energy strategy. We intend to finalize it in May so that it is undertaken by the government in June, and then we shall immediately start procedures,’ Vosganian said. As the minister also mentioned, the prospect of starting the privatization process of the energy plants is appealing for many companies from Italy, France and Germany. Representatives of the energy companies RWE Power (Germany), Iberdrola (Spain) and Endesa (Spain) have already expressed an interest of participating in the privatization process. RWE Power is also one of 16 companies short-listed to construct the third and fourth sections of the Cernavoda nuclear power station, in the country’s southeast, which are expected to be operational in 2013-2014. The question of responsibility The whole process of privatization has been delayed due to the ambiguity of who was ultimately responsible for the energy plants. According to the minister, although they were transferred through Government Ordinance to the Authority for State Assets Recovery (AVAS), the energy plants were under the administration of the Ministry of Economy and Commerce until March 31. Recently, AVAS President Teodor Atanasiu declared that the three electric energy producing units could become private property by the end of the year. The Ministry of Economy and Commerce, majority stakeholder of the power plants, cannot finance the investments necessary for their modernization, said Mihai Catuneanu, director-general of the Office for State Participations and Privatization. ‘The energy complex needs important investments, approximately 800-900 million euros, for modernization and compliance with environmental standards.’ Source: http://rbd.doingbusiness.ro/
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New mobile operators Many mobile telephony providers operating in Northeast Europe have expressed an interest in acquiring licenses to operate in the Former Yugoslav Republic of Macedonia (FYROM) and Kosovo. After a round of intense negotiations, and some unexpected developments, Mobilkom Austria and the consortium of Telekom Slovenija and Ipko Net became the new mobile providers in FYROM and Kosovo respectively. FYROM In February, telecommunications firm Mobilkom Austria, which already operates in the Serbian market, became the third mobile provider in FYROM. According to FYROM’s Prime Minister Nikola Gruevski, the company offered double the asking price (about 10 million euros). The two other operators in FYROM are T-Mobile of Germany and Cosmofon of Greece. Mobilkom Austria promises to create 300 new jobs and to reduce prices by between 50 and 67 percent compared to its competitors. Last November Mobilkom Austria paid 320 million euros for the acquisition of a mobile phone license in Serbia. Kosovo The bid for the second mobile provider in Kosovo turned out to hide unexpected events. Initially, a consortium headed by a Kosovo businessman was declared the winner. Kosmocell, a partnership between local companies Dukagjini and Kujtesa and an Italian-US operator, beat a consortium consisting of Telekom Slovenija and the Kosovo provider Ipko Net, Mobilkom Austria and Team Kosova. However, the Telecommunications Regulatory Authority announced that the winner failed to meet payment layout and the license went to the partnership between Telekom Slovenija and Ipko Net, which offered 75 million euros. The UN-run province has one cell phone operator under a deal between the Kosovo Post Telecom and Monaco Telecom. Sources: www.mobilkomaustria.com / www.telekom.si/en/
In this issue immigration, integration and multiculturalism, combined with the issues of identity and security as expressed by Francis Fukuyama, are examined in depth by a number of policy practitioners and analysts who were asked to reflect on the current state of affairs of these multifaceted challenges that affect very different aspects of public and private life in Europe today. Over the past decade, and particularly since the last two enlargements (2004 and January 2007), all European Union member states have been transformed to varying degrees into host countries for immigrants. Managing migration needs and developing appropriate policies that are able to integrate a growing immigrant population and, furthermore, to address the resulting challenges are items that have topped the agendas in the EU national capitals and in Brussels. While the phenomenon of immigration to Europe is not new, the size, growth rate and diversity of the immigrant population today are. In addition, the needs and aspirations of second- and third-generation immigrants, who are EU citizens, equally need to be addressed in a Europe ‘united in diversity.’ European politicians and policymakers are being called upon to revise, formulate and implement policies that are appropriate for the current realities. This involves immigration policies that are suited to labor market needs, as well as socioeconomic integration. It also involves naturalization regimes, citizenship acquisition and political rights, plus education policies with a multicultural approach.
The illustrations come from paintings by Anastasia Karvella and belong to a private collector.
This special section focuses on some of the issues at stake in Europe, aiming to contribute to the ongoing debate on how to successfully integrate immigrant populations in the EU today and address the pressing challenges of multiculturalism and liberal democracy, as well as national identity, sovereignty and security.
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Francis Fukuyama There is something good in everything bad and there is something bad in everything good, or at least so the Greek proverb goes. The escalation of international terrorism in recent years has claimed the lives of many innocent civilians. It has led to a security obsession in international politics at the expense of concerns about the human rights and civil liberties of citizens and noncitizens alike. It has also led to a disproportionate increase in government spending on border controls and internal security checks that are more likely to waste the time of travelers going about their own business than detect potential terrorists. That is the bad news. The good news is that these unhappy developments have prompted Western and Arab thinkers to ask: What is it that has gone wrong? Why are liberal, pluralistic and largely secular democracies of the West being attacked by a handful of jihadist terrorists? How does it happen that most of these terrorists were born and raised in these liberal democracies? Is there something intrinsic to Islam that makes it incompatible with Western democracies? European societies & alienation In a recent article published in the Journal of Democracy1, Francis Fukuyama, a wellknown North American thinker, seeks to answer the pressing question of why it is 1. Journal of Democracy: April 2006, Vol 17, No 2.
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By Anna Triandafyllidou
that jihadist terrorism finds fertile ground among Muslims who live in European societies. Fukuyama argues that Islamic terrorism is a typically modern problem, not very different from other 20th century forms of terrorism such as those nurtured by the anarchist movement, fascist ideology or the Baader-Meinhof group. Muslim youngsters in Western societies have lost touch with their parents’ culture and customs. At the same time they feel alienated from the society in which they grew up, but with which they cannot identify. They have lost touch with their ‘inner self,’ as Fukuyama puts it, and are thus easy prey to calls for a universal umma — a universal brotherhood of Muslims interpreted, however, with a violent overtone by some extremist Islamic leaders. Fukuyama notes that the root of the problem is a typical question of alienation in late modern societies rather than a supposedly inherent propensity to violence to be found in the Muslim culture, faith and tradition, as Huntington and others have argued.
Identity crisis Fukuyama tries to explain in his article why this identity crisis of young middle-class Western Muslims is more pronounced in Europe than in the United States. He argues that the USA offers immigrants, Muslims and otherwise, a civic religion in which to believe and into which to integrate. The problem with European societies is their persistent attachment to historical national identities that infallibly privilege the ethnic groups that originally populated a country over those that arrived later. Germany for instance, Fukuyama argues, has refused to incorporate as equal citizens not only first- but sometimes also second-generation immigrants. Britain and the Netherlands have adopted too multicultural a view, allowing for the existence of ‘parallel societies’ without effectively providing for immigrants’ assimilation into a common civic culture. In Fukuyama’s view, the success of the American immigration paradigm lies to a large extent in the frequent and emphatic performance of patriotic rituals (waving the American flag, taking a citizenship oath, having a naturalization ceremony for immigrants who become American citizens, celebrating the nation). Fukuyama proposes that
and European Muslims European countries should liberalize their labor markets and let low-skilled workers come in and redeem their dignity through their hard work. They should also provide for a civic culture that incorporates immigrant workers provided they espouse the fundamental liberal democratic values. Otherwise, Fukuyama notes, ‘Europe’s failure to better integrate its Muslims is a ticking time bomb.’ Reasoning gaps At first sight, Fukuyama’s analysis appears sound and convincing. On closer inspection, however, several gaps are apparent in his reasoning. First and foremost, he assumes that terrorists are to be found among European Muslims only — the whole question of international terrorism lies with Europe’s integration of its Muslim migrants. North American Muslims by contrast are assumed to be loyal and peaceful patriots identifying with the American nation and aspiring to the American dream through a hard-work ethos. Fukuyama fails to notice that the perpetrators of the 9/11 attacks included US citizens and residents, too. He also fails to notice that while a large number of Muslim youths face social exclusion, unemployment and a sense of standing between two cultures, it is only an absolutely tiny minority that passes from social alienation and personal identity crisis to jihadist terrorism. He fails to acknowledge that apart from such isolated incidents as the Rushdie affair in Britain in the late 1980s, the murder of Theo van Gogh in the Netherlands in 2004,
Europe, many of which are not available in most Muslim countries. Indeed, one fails to see where all these alienated and potentially threatening European Muslims are.
and the occasional riots (like those in England in 2001 or in France in 2005) often precipitated by genuine grievances, there is no evidence that Muslims have failed to show loyalty to their country of settlement. As Bhikhu Parekh, a British political philosopher, argues, even when subjected to discrimination, they have either suffered quietly or protested peacefully, but rarely taken the law into their own hands. They have also taken considerable pride in their country of settlement and respected political institutions. Both young and older Muslims appreciate the rights and freedoms they enjoy in
The post-Cold War era Another problem with Fukuyama’s arguments is his total neglect of the post-Cold War context of Islamic extremism. It is no coincidence that jihadist terrorism has emerged after the implosion of the communist regimes in Central and Eastern Europe that resulted in the universal and unilateral dominance of the USA in world politics. This dominance has generated discontent among European, Arab and Asian Muslims (and Christians, too). Naturally terrorism is morally and politically unacceptable; nonetheless it remains puzzling why talented scholars like Fukuyama fail to see that US foreign policy and military intervention in the Middle East have fueled violent protest and a sense of alienation among Muslims in both Europe and the United States. Anna Triandafyllidou is visiting professor at the College of Europe in Bruges since 2002, senior research fellow at the Hellenic Foundation for European and Foreign Policy (ELIAMEP) and research fellow at the European University Institute, Florence. Anna Triandafyllidou’s webpage: www.eui.eu./Personal/Strath/Welcome.html?/ Personal/Strath/collaborators/Triandafyllidou/TriandafyllidouMain.htm
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Immigrants The equal participation of all members of society in the political process lies at the core of democracy. This principle of democratic legitimacy is influencing the European debate on how to integrate its immigrant population and strengthen its social cohesion. Indeed, the issue of immigrants’ access to political rights is being discussed between and within political parties and national governments. As a rule, countries grant full civic and political rights to their own nationals while non-citizens are subject to restrictions. Citizenship entails the enjoyment of full political and civic rights and obligations and therefore frames political participation. Participation in political life constitutes a significant dimension of integration in the society and public life of a country. Two matters have thus become relevant for policymakers: The first involves who can have access to citizenship while the second concerns what rights ought to be granted to lawful immigrants.
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manent and growing issue. The debate on how to integrate this population ranks at the top of today’s EU political agenda. Since 2000, the Council of Europe has urged European countries to grant legally established migrants the right to vote and stand in local and regional elections. Similarly, the European Parliament (EP) also pronounced itself in favor of extending the right to vote to immigrants. So, where do things stand today?
The naturalization process Regarding the former, naturalization is the process through which a non-citizen may gain citizenship in the country where she or he is living; thereby participating in its public life. Regarding the latter, immigrant political rights — in other words enjoyment of civil rights, trade union rights, the right to participate in and form immigrant associations, the right to participate in consultative bodies at various political levels, voting rights and access to citizenship — are a condition for the extent of immigrants’ political participation in the host society. Thus, matters of immigration, citizenship and quality of democracy are becoming inevitably linked. This is particularly the case across the European Union, where the lawful residence of non-citizens (and their offspring) on member-state territory has become a per-
Political rights Recent research has examined immigrant participation in civic and political life in all EU member states; the research findings point to a reality that is still far from the Council of Europe’s and the EP’s aspirations.1 A closer look at the challenges and discrepancies that characterize the current situation is relevant for EU policymakers, EU citizens and foreign residents alike. More1. For more information on the EU-funded research project POLITIS, visit ELIAMEP’s website www.eliamep.gr or www.uni-oldenburg.de/politiseurope/index.html.
and political rights
over, it is relevant for our immediate neighborhood, namely Southeast Europe, for two reasons. First, the last 20 years have been characterized by large-scale emigration toward the EU. This has led to sizeable communities of Balkan nationals living and working in many EU member states. Second, as the EU enlarges to integrate these countries, they are likely to be faced with similar immigration challenges. All member states clearly distinguish between the political and civic rights granted to EU nationals and all other third-country nationals. EU nationals residing in another member state are granted political rights at the local and regional levels and for EP elections. For all others, access to political rights is subject to different kinds of restric-
tions. Such restrictions depend on the residence status of the individual (i.e. permanent residents, renewable residence permit, temporary workers, asylum seekers, etc) and, sometimes, on their country of origin. Member states & criteria In addition, the extent to which immigrants living and working in the European Union can participate in public life depends on which member state they reside in. Each EU member state has its own (sometimes rather vague) rules and criteria according to which it grants access to citizenship or resident status and subsequent access to political rights for its immigrant population. With regard to voting rights for non-EU foreign nationals, the 27 EU member states
can be grouped into three categories (see Table 2). Interestingly, even in countries where voting rights (both passive and active) are at present denied, the issue of immigrant voting rights occupies an increasingly significant place in the political debate. In short, while the situation is far from uniform, there appears to be a hesitant trend toward local enfranchisement of immigrants in the EU. Those cautious about extending political rights to non-nationals argue that citizenship is fundamentally interlinked with nationality, and political rights and obligations are only relevant for country nationals. In many cases, immigration continues to be perceived as a temporary phenomenon and immigrants are expected to eventually return to their country of origin. Hence, political representation is irrelevant. Proponents of immigrants’ right to vote argue that excluding permanent and longterm residents from citizenship and full political rights in the society in which they live is contrary to the principles of democratic government. Voting is an inherent part of integration and excluding long-term/permanent residents from this dimension is inconsistent with the intent to integrate immigrants. Furthermore, it leads to social exclusion and restricts their presence to merely being a source of labor. In addition, the contribution of legally resident non-citizens to a country’s prosperity (through working, paying taxes and social security contributions) justifies their right to influence political decisions in the country con-
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cerned. Hence, integration not only involves feeling part of the society in which one lives; it also involves making residents feel that they have certain responsibilities and obligations toward their ‘host’ society. This cannot be achieved without them also actively participating in aspects that will determine both their own and their children’s future. Lastly, the enjoyment of human rights in Europe is independent of citizenship and country of origin. Distinguishing between political rights granted to legally resident EU citizens and legally resident non-EU citizens
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challenges the core principles of non-discrimination. Thus, political participation that complements civic and social participation is understood in terms of inclusiveness, plurality, social cohesion, social justice and democracy. SE European migrants Today, immigrant political participation is relevant in Southeast Europe for several reasons. Migration trends are undergoing a transition phase and all Southeast European countries are facing different sets of migration-related challenges. However, all
are either already facing or will eventually face the challenge of how to integrate immigrant populations in their societies. Over the past two decades, Greece and Italy have been transformed into immigration countries and are facing the challenges of integrating first- and, gradually, second-generation immigrants. Bulgaria and Romania, EU member states since the beginning of the year, are expected to see their emigration flows level off and to start experiencing immigration flows. Nationals of all Balkan countries are residing in large numbers in EU member states. In short, migration and the current and future prospects of migrants’ integration in all spheres (economic, social, cultural, educational and political) are relevant for all of Southeast Europe. Actively engaging in the debate on how immigrant populations will be able to participate fully in public life is pertinent for two main reasons: firstly, for the successful management of immigration-related diversity in this part of Europe, and, secondly, for safeguarding and promoting non-discriminatory human rights and pluralist democracy — values that lie at the core of the EU.
Ruby Gropas (PhD) is research fellow with the Hellenic Foundation for European and Foreign Policy (ELIAMEP), Athens, Greece. ELIAMEP website: www.eliamep.gr
Labor market needs Economic analyses of immigration on host labor markets usually focus on wage differentials, employment, the degree of substitutability/complementarity between natives and foreigners, and a return to skills and labor market efficiency. There is a consensus that immigrants earn substantially less on average than native-born workers. The difference declines over time but remains significant. In general, unskilled native workers may suffer economically from migration while the more skilled workers benefit. However, empirical evidence supports the idea that high levels of unemployment have not been generally associated with high levels of immigration in the host countries. Usually, immigrant workers take on undesirable jobs, which natives generally refuse to do; these are the ones that are dirty, unpleasant, dangerous, low-paid and with harsh conditions. It is suggested that the willingness of immigrants to undertake such work may increase higher-status employment for natives. Thousands of women in Europe, and in its southern part in particular, are now able to work outside their homes because of the availability and affordability of immigrant domestic help. ‘Europe needs migrants’ On February 23, 2007, Franco Frattini, the European commissioner responsible for justice, freedom and security, in a public lecture at the London School of Economics (LSE), reinforced the well-known fact that
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the EU needs immigrants. It needs them to sustain economic growth and reduce possible inflationary pressures caused by labor shortages. ‘The need for workers in many member states, including the UK, is already evident in a number of sectors. This demand will grow as we lose 20 million workers between now and 2050.’ The Commission also emphasizes that immigration is only part of the solution to economic difficulties. Labor market problems should also be tackled by stimulating innovation and encouraging the employment of older workers. The latter measure is disputable. The European Commission still places high emphasis on attracting high-skilled labor. It is essential for Europe to become ‘a real magnet’ for highly skilled immigrants, said Commissioner Frattini in his LSE address. EU: Addressing the shortages Even though there is a proposal for a directive on the conditions of entry and residence of seasonal workers, a discussion on the general need for low-skilled labor is still missing. Some say this is a kind of political hypocrisy. Attitudes toward low-skilled immigrants have always been a sore point for any country, especially in today’s enlarged Europe. Unlike the case with highly skilled labor needs, it has never been easy for politicians to be honest with their voters about unfilled vacancies in unskilled jobs and to convince them that foreign recruitment is needed.
By Dr Eugenia Markova
Many more will feel threatened; they may vote politicians out of power. Seasonal workers are more appealing to both the public and the politicians; they are meant to come for a few months a year only and they are not allowed to bring families with them. Entry and exit stamps will prevent abuses, according to the Commission’s plans. No integration programs will be needed for them — cheap and efficient use of labor when needed and for as long as it is needed. Obviously, some lessons in immigration policy outcomes have been forgotten. More than 30 years ago, Western European countries, and the Federal Republic of Germany in particular, had similar intentions when allowing cheap labor from the south to fill industrial shortages — immigrants were needed temporarily only. Contrary to immigration policy intentions, most of those immigrants decided to stay, have families and spend their whole lives there. Thus, the EU needs to clearly address the labor market needs for low-skilled workers in general rather than for seasonal labor only. Low-skilled migrant workers, even those admitted temporarily, should also be incorporated into the integration agenda.
Scheme will apply to Bulgarians and Romanians only from next year. Though not often discussed, some saw the restrictions as beneficial to the new accession states. Restrictions can keep experienced and skilled people at home, to the benefit of their origin countries’ development. Such thoughts were mainly related to the poorest new EU entrants, Bulgaria and Romania.
The demand for labor in Europe Currently in many EU countries, and particularly in Southern Europe, labor shortages in the agriculture, construction, hotel and catering and personal services sectors are filled by undocumented immigrants. It is a long-term strategy to allow legal economic immigration only. The Southern European countries of Spain, Italy, Portugal and, more recently, Greece have applied numerous regularization programs in an attempt to deal with an increasing number of illegal workers. In an enlarged EU, such policy measures have spillover effects on the other member states as well. In this respect, EU commissioners have expressed concerns that mass regularization of illegal immigrants is not a suitable policy option for dealing with illegal immigration. If we agree with it, what then will be the optimal solution for the growing stock of undocumented immigrants in the EU who had only come in the first place because the market had signaled demand for their labor? Recently, in an effort to curb illegal immigration, the European Union started a process to create job centers in Africa, with the aim of providing legal routes of entry for temporary immigrants from the continent. Working with governments of African nations, the EU hopes to place workers from Africa in hard-to-fill
sectors such as agriculture, construction and cleaning services. In exchange for this cooperation, the EU plans to provide development aid to African nationals to tackle the emigration problem at its source. This has caused the new EU member states in Central and Eastern Europe to express concerns that lifting restrictions on their countries should come first, before facilitating the entrance of third-country nationals to find work in the bloc. Some EU countries, such as Ireland, do require employers to look for Bulgarians and Romanians first before looking outside the Union when trying to find recruits for hardto-fill jobs. In the UK, the Sector Based Scheme, a quota-based scheme originally aimed at third-country nationals and with plans to be discontinued, was extended exclusively to Bulgarians and Romanians; similarly, the Seasonal Agricultural Workers
Conclusion It is generally recognized in Europe that a common EU policy will be needed to allow for economic migration to take place legally. The elements of such a policy were set out more than seven years ago, in 1999, in Tampere, Finland. However, not much progress has been made in this direction. The reason? Another recognition: Any common immigration policy in Europe is inevitably linked to security issues and to effective measures against undocumented immigration. Security presupposes that each member state should decide for itself on the number of immigrants it can accept and on the conditions of admission. The conflict between member states’ desires to protect their sovereign control over immigration policy and the drive to complete the European market for goods, services and labor is inevitable. Clearly, the interests of both the member states and businesses are recognized. What we should not leave out of the equation are the interests of the individual immigrants and their home countries. Dr Eugenia Markova is a Greek Ministry of Economics and Finance senior research fellow in the political economy of Greece and Southeastern Europe at the Hellenic Observatory, the European Institute of the London School of Economics and Political Science. European Institute, London School of Economics website: www.lse.ac.uk/collections/europeanInstitute/
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While each and every state in the world has had the experience of migration, they all seem to treat every new influx as a unique historical experience. In this respect, Greece is no exception. As the Berlin Wall came crumbling down in 1990, the self-perception of Greeks as a diaspora nation was challenged. The proliferation of Moneygram and Western Union outlets and the emergence of black, Asian and unusually blond children speaking Greek testify to the emergence of a host society. More than 15 years after the first migratory wave, as the second generation of migrants is already here, Greek society must face up to the fact that these people are here to stay. Immigration factors There were several push factors toward Greece. As the sociopolitical structures of former socialist states collapsed, Greece emerged as a relatively affluent neighbor where geographical proximity and a borderline conducive to illegal migration (extensive coastal and mountain frontiers) encouraged hundreds of thousands of migrants to make the journey. Seeking the most accessible better-life scenario is the tale of the most prominent migrant communities in Greece, namely Albanians, Bulgarians, Romanians and citizens of former Soviet states. At the same time, the country finds itself in the middle of a major migration route, a gateway for thousands of people who make their way by land and sea from the Middle East and Central Asia via Turkey and Greece to Italy and Western Europe. As often happens, the middle of the road became the de facto end of the road for many of these people. This is the tale of several thousand Indians, Syrians, Iraqis, Iranians, Palestinians, Poles, Kurds, Africans and others.
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Migrant Issue of political rights Migrants constitute today nearly 11 percent of the total population of Greece. Granting political rights to these ‘less-than-new’ settlers is a discussion which is still in an embryonic stage. Public political discourse on nonindigenous populations is dominated by the prism of utilitarianism and security. Dealing with the ‘problem of migration’ is often treated in terms of a cost-benefit analysis, with the implicit notion that the sole beneficiary considered in this assessment is, as it should be, the stock of ‘original Greeks.’ Raising the issue of political rights implies considering migrants as political subjects, with rights symmetrical to their obligations, including the entitlement to vote and run for office. The very discussion requires opinion leaders to consider the possibility of expressing the interests of what is now a pariah class. The challenge at hand is making migrants stakeholders in Greek political life, granting them an active role in the drafting of policies that will determine their own future. Transcending the current political discourse on migration, the Panhellenic Socialist Party (PASOK) has in recent years opened up the possibility of party membership to migrants. Another decisive move was a motion in Parliament suggesting that immigrants should be allowed to vote in elections for local government. The motion failed to pass due to the resistance encountered by the conservative majority which is currently in government. This was a critical failure for Greece. Without the participation of migrants in the decision-making process, there is very little chance that our society will be able to face up to the forthcoming challenges. The coun-
By Dr Marilena Koppa
try has not yet experienced riots of the type staged by socially excluded communities with distinctive racial and ethnic characteristics in Los Angeles (USA), Bradford (UK) or Paris (France). At the same time, our society has experienced its first hate crimes. A political joke The fact that life is hard for migrants in Greece is demonstrated by the following joke, which is shared among the Albanian community in Athens: - A teacher addresses a second-generation Albanian student: ‘What is your name?’ - The student replies, ‘Gjoni.’ - The teacher beats him until the response is a name with a more ‘Greek’ sound to it: ‘What is your name?’ - ‘Yannis, Sir, Yannis!’ - The student goes home, and his father calls him: ‘Gjoni? Hey, Gjoni! Come help me out here.’ - The son responds: ‘My name is Yannis. The teacher said so.’ - Full of anger, the father beats his son. The student goes to school, at which point the teacher regains his sensitivity and empathy for a child who, after all, has a Greek name. - The teacher addresses the student: ‘Why have you got a eye black? Who beat you up?’ - ‘Oh, Sir, it was those filthy Albanians.’
communities place for second-generation migrants to change two or three names before adulthood, while conversion to the Christian Orthodox creed is not uncommon as the newcomers perceive this as a key to social inclusion. Being what they are is not tolerated and, in this context, becoming something else often seems the only viable option.
This joke reflects the assimilative pressure felt by the most populous migrant community in Greece. Albanians are white and often indistinguishable from the indigenous population. Within Albania there is no dominant religion with a permeating effect on political mobilization. According to certain anthropological studies, it is common-
Lack of policy Not having a policy on migration is the main policy that Greece has pursued for nearly two decades. Our health services, social insurance, public schools, public discourse and bureaucratic structures have yet to respond to the challenges of migration. Firstgeneration migrants simply endure, sustaining the ‘pursuit of happiness’ in an admittedly hostile country with the support of certain progressive citizens. Second-gener-
ation migrants are born and raised in a country where they are treated as foreigners. Things are about to get worse. The white, ‘invisible migrants’ from Eastern Europe have stopped coming. Instead, the latest wave of migration involves racially visible, often illiterate and mostly male migrants from the Indian subcontinent. Without a policy that promotes transparency of settlement, these groups are exposed to health hazards, the predatory nature of the trafficking networks and cruel employers. Moreover, these migrants have little chance of achieving family reunification, live in despicable housing conditions, have no access to language training, very little access to health services and a nearly institutionalized position in a dirty, difficult and dangerous labor market. As long as charity substitutes policy, there is an imminent danger that the suppressed anger will be expressed. People who are not stakeholders in democracy have little interest in respecting its institutions. For these people, social cohesion is someone else’s concern. Dr Marilena Koppa is an assistant professor in the Department of European and International Relations at Panteion University in Athens, specializing in Southeastern Europe and the Balkans. She is also a member of the Political Council of PASOK, heading the Human Rights Section of the party. Dr Koppa serves also as vice president of the Institute for Strategic and Development Studies (ISTAME) ‘Andreas Papandreou.’ ISTAME website: www.istame-apapandreou.gr
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Comparing integration policies Signs not only of fatigue but also of failure are apparent in both strategies which developed in Europe regarding the integration of immigrants. The first strategy attempted to integrate the non-natives into the already existing society — and it became clear in France just how restrictive such a strategy was. It has been proven that nowadays minorities and foreign communities no longer seek to realize the demands they were making during the internationalization era, at the turn of the 19th and in the early 20th century. Then, their main aim was to be accepted as citizens of the country to which they had emigrated. They were trying to prove that they were no different from the natives. Today, in the era of globalization, immigrants in European countries are instead seeking the acknowledgement of their differentness. Tolerance & multiculturalism In the 1970s and 80s many believed that the second strategy, that of tolerance and multiculturalism, would be more effective than the previous one. In this, the main objective was to establish the right of national groups to differentness, without however extending this same right to their individual members. This was a policy followed by the Netherlands as well as by the United Kingdom. A variant of it was applied in Germany; though the Germans had some difficulty in admitting that their country had already become a host state. In the early 20th century, the fact that only those countries which had
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originally been established on the basis of a multinational citizenry were free of serious problems related to multiculturalism was proven. By contrast, in adopting the multicultural model, countries that had historically been established on the basis of ethnic homogeneity, such as Greece, are today faced with grave difficulties. The problem with those societies that have endeavored to develop from acknowledged ethnic societies to multicultural ones is that quite often the traditions of different ethnic and/or religious groups undermine the rights of the individuals belonging to those groups — rights which are fundamental to the creation of a multicultural society. This has been seen in the UK and also in northern Greece, as a result of Muslim groups’ adherence to Sharia law. Tolerance therefore of the differentness of a national group could be transformed into total forbearance of the infringement of rights and liberties of the individual. Separate, parallel societies In the first few years of the 21st century, both strategies as applied to the societies of European Union member states were
proved as having led not to the creation of societies tolerant of the immigrants in their midst, but to societies indifferent as to what was happening in the areas where those immigrants had taken up residence. Eventually, these areas developed from potential sections of an integrated multicultural society to separate, parallel societies, in which elementary human rights, especially those of women, are today often systematically violated. The question of identity In an age of multiple identities it follows that we have a problem as to which identity takes priority. In the past, whenever social identity was not put first, the national one usually was. Nowadays there are those, especially among immigrant communities, who place priority on their religious identity, mainly defined as antiWestern. In the host societies, this multiplies the arguments and discussions concerning polarized subjects such as ‘us’ versus ‘them,’ or ‘friend’ vs ‘enemy.’ Large sections of these societies tend to define themselves either as opposed to a powerful external third party (for exam-
ple the USA), or as opposed to someone different within society itself, such as the immigrants. The necessary steps In order for society not to be eventually led to the point where it will have to choose between integration or differentiation in the case of immigrants of another religion, the following steps should be taken: Firstly, society has to deal with the ‘other’ in a democratic way. This means that it should show neither unadulterated tolerance toward the anti-democratic ‘different’ element nor make attempts to eliminate it. Society has to concur that the ‘different’ element should remain so on a commonly agreed basis and that, at the same time, this commonly agreed basis ensures adequate breathing space for the ‘different’ element. The commonly agreed basis is that the immigrant would have to accept unquestionably the foundations that support the rights he or she enjoys. In contrast, when the alien evinces a will to subvert and negate the right of any other person to be different in a society which ensures equality, then he is placing himself outside the bounds of a so-
ciety which professes democratic tolerance and respect for those who are different. Secondly, the host society has to provide immigrants with the possibility of political integration and also extend to them the political rights/duties enjoyed by its other members. It also has to facilitate the immigrant’s acquisition of citizenship, provided he or she fulfills certain prerequisites (such as an adequate knowledge of the Greek language, history and elements of Greek culture, as well as
an unqualified adherence to the tenets of democracy and to the country’s constitution). And this is because citizenship is not defined by blood but on the basis of a common existence of both the immigrant and the native within a citizens’ society. An extension of this premise is that all those born in Greece and who have acquired a Greek education are also eligible for Greek citizenship. Thirdly, the host society should take care that human and social rights/duties and liberties apply equally and fairly both to the native and the immigrant. This means that both institutions and society should not deal with the ‘other’ as if he or she were a person who expects to be treated less well than the natives, while at the same time the ‘other’ should not regard his rights as having a bearing only on his relations with the Greek society and not in the internal affairs of his own community. Just as no society can be called democratic when it rejects non-natives, so it is that no immigrant can hope to enjoy full citizen’s rights in his host country when he refuses to apply, develop and support those rights also within the confines of his own national or religious community or family.
Dr Nikos Kotzias is an expert at the Greek Ministry of Foreign Affairs and a lecturer at the University of Piraeus, Faculty for European and International Relations. He is also a columnist at the Imerisia daily economic newspaper and an editor of the Rethinking scientific series from Kastaniotis Publishing House. Greek Ministry of Foreign Affairs website: www.mfa.gr
dialogue
Immigrant integration in Greece For many years the Netherlands and, to a certain extent, Britain represented rather reliable models of societies which could cope rather successfully with high numbers of immigrants. Both countries subsidized and even celebrated ethnic differences and favored multiculturalism, essentially the accommodation of different groups on equal terms. Nevertheless, both models showed their limits following the events of the September 11 attacks in the US. The British public was shocked when it was revealed that three out of four of the suicide bombers that carried out the terror attacks in London in July 2005 were not ‘some Arab foreigners’ but British-born citizens of Pakistani descent. Likewise, the integration of Muslims became a matter of concern for the Dutch when the filmmaker Theo van Gogh, a fierce critic of fundamentalist Muslims, was murdered in 2004 by a radical Islamist. It is interesting to note that nowadays, in parallel with the continuous immigration from poorer countries to the Netherlands, between 30,000 and 40,000 native Dutch are leaving the country each year for Canada and Australia. This trend is based solely on so-
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cial reasons and mainly affects wealthy urban Dutch professionals. It is worth noting that the European countries with immigration problems are countries which share a number of common characteristics. These characteristics are usually aging native populations, falling birth rates as well as the fact that these countries are wealthy societies. Alienation, segregation, unemployment and high levels of crime and poverty are also common issues for the migrant communities in all European countries. This is the point where the comparable circumstances cease to exist. For example, in Greece the closest similar attitude to the Dutch trend of emigration is the abandonment of state schools in Athens and the flourishing of a whole industry of private elementary and secondary schools where children of mid-
By Dr Angelos Syrigos
dle- and upper-class Athenians get a better education, away from pupils who do not speak Greek as their mother tongue. Likewise, problems such as Islamic fundamentalism, terrorism and free speech affect everyday political affairs in countries like Britain, the Netherlands, France and Germany, whereas they do not constitute a major concern for Southern Europe.
The Greek case Apart from the aforementioned similarities among all the European nations, Greece’s immigration problem has certain characteristics that are not shared by other countries. More specifically: Before 1990 the annual rate of immigration varied between 0.1 percent and 0.2 percent of the total Greek population. A massive wave of migration took place in the 1990s and within a very short period of time the immigrant population of Greece rose to 10 percent of the total population. Immigration spun out of control in the 90s to the extent that all aliens were residing in the country illegally. There was no initial relationship or other link between the immigrants and Greece, unlike the big colonial powers, which attracted mainly the inhabitants of their former colonies. Greek governments were initially confounded by a problem they had never anticipated. The immigrants remained illegal for several years. The undisclosed aim was that the immigrants could fill seasonal and low-wage jobs without having the right to gain access to social services, become per-
manent residents or even claim citizenship. When the scale of the problem was realized, the Greek state tried to develop strategies to legalize the earliest immigrants. The aim of these strategies was to bring an end to the dangerous and undisciplined illegal presence of immigrants. The integration of the immigrants to Greek society was not an issue of these strategies apart from one decision by the Ministry of Education. This entailed the children of illegal immigrants being allowed to enroll in Greek schools without having to present all the documents usually needed for such an action. It is unknown whether this was an intentional decision aiming to integrate immigrants or if it was inspired simply by practical needs. The end result is a new generation of young people whose parents are not of Greek descent and who are now studying at Greek schools and universities. From education to citizenship The country has to face the issue of this generation of young ‘foreigners’ who have Greek education now. According to a principle shared by many Greeks, those who participate in Greek education are Greeks.
The state has to start granting citizenship to those young people who graduate from Greek high schools after having completed 12 years of education in this country. The measure could easily start with students who manage to pass the examinations for admission to Greek universities. Apart from a nostalgic sense that some models of immigrant integration have worked in the past, the problem is that there are no reliable models anymore. Policymakers get a great deal of information regarding the failures of various national policies on the integration of immigrants. Unfortunately, they get next to no guidance as to which strategy is better to adopt in order to address the root causes of the non-integration of immigrants into society. Since ancient times Greek civilization has managed to integrate other ethnic groups into the its society. It may perhaps be used once more as a successful model of integration in today’s world.
Dr Angelos Syrigos is a lecturer of international law and director of the International Olympic Truce Center. International Olympic Truce Center website: www.olympictruce.org/
dialogue
Facts and challenges By Miltos Pavlou
After over a decade of the prevalence of phobic and negative attitudes, immigration has recently come to be seen as a blessing in disguise, due to the visible benefits for the Greek economy. It is true that there has been a major shift in the public debate, especially as far as the need for the integration/assimilation of immigrants is concerned. And this is certainly not a tiny step but a leap for a country which has seen the growth of the percentage of foreign residents from a modest 2.5 percent in 1990 to 10 percent in 2001 and even more today. Nevertheless, the landscape of immigration and anti-discrimination policies in Greece is largely marked by issues of recognition and of articulation of long-term state initiatives and planning, as well as by shortcomings, social exclusion, racist phenomena and macro-political challenges. The key issue Let’s make this straightforward: The key issue is that of the so-called ‘second generation’ of immigrants. These are mostly young people who have known no motherland other than Greece and who were either born or raised here within Greek society and its political and cultural system. They are not so much young immigrants as they are members of the
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young generation of Greek and European society. What is at stake, when it comes to their ‘integration,’ is not solely their own fate, but the fate of society as a whole and of the new generations to come. So let me put this as explicitly as possible: In my opinion, there is no other more crucial social challenge for the European and national societies today. The facts Now, let’s expose the facts around migration policy and its effects that presently concern these young people, as well as their parents: Residence permits: One of the most widely known aspects of the Greek migration management system is that, due to long delays and administrative dysfunctions, residence and work permits are often delivered to immigrants after their expiration date. The situation has improved but long delays are still the norm. Exploitation: A migration policy that prolongs the perennial insecurity of the suspended immigrant status preserves the subaltern and vulnerable position of the immigrants in employment. Surveys show that immigrant workers receive lower wages and pay higher social security contributions. Slave labor patterns — in rural areas as much as in the capital’s northern and eastern suburbs — are darkening the picture.
Sans papiers: The failure of the migration system leads the immigrants to a perennial shift from legal to illegal residence status and vice versa. It is often hard to explain that many immigrants who were born in the country have been for a long time or still are ‘sans papiers.’ However, this is a nightmare that haunts immigrants of all ages in Greece today. It is not an exaggeration, nor a rhetoric scheme; it is the plain truth. Long-term rights: The European Union directive on long-term residence status is yet to be fully incorporated into the Greek legal order, while the application for such status is possible only after paying a 900-euro fee and passing an exam following a yearlong course in the Greek language, history and culture. However, there is a ‘numerus clausus’ for enrolling in these courses, to an extent that, in the best-case senario, no more than 8,000 immigrants will be allowed to apply for long-term residence status before 2010. This is an extremely low percentage of long-term residing immigrants and of the total of 1.15 million estimated to live in Greece today. Costs: In the best of cases an average immigrant family, just for residence permits, needs to pay each year an absurd amount of money to the Greek state, which varies from 1,000 to 3,000 euros. These payments do not contribute significantly to the improve-
ment of the infrastructure and services provided to and used by the immigrants, nor do they contribute to health or education. They are used to plug other budget holes. Citizenship: An immigrant who wishes to obtain Greek citizenship after 10 years of continuous legal residence has to pay 1,500 euros in order to apply for citizenship even if born and raised in Greece. The Greek state bears no obligation to answer, to accept or reject the most expensive application for citizenship in the EU within a predefined time limit. In fact, it often takes more than 10 years to receive a rejection. Education: The Greek education system remains monocultural and ethnocentric, despite the up to 10 percent of students with immigrant backgrounds. The structural and systemic role of the education system in Greek society is not challenged, still based on exclusion rather than inclusion and aiming at assimilation rather than integration. Deportation of children: Alien minors, if found without papers by the police, and regardless of whether they were born in the country or entered it only yesterday, are subject to deportation. Says who? Primarily the Greek Ombudsman, who since 2005 has been insisting on the urgent demand to abolish police detention and expulsion of children. Even today, the detention cells in police stations in the capital and the periphery ‘host’ immigrant children awaiting an uncertain future in a unique, continuous and repetitive mass violation of the international convention on children’s rights. Police: The police force is the main public service that frequently deals with immigrants. Because of the way they are treated,
the immigrants see in the police an authoritarian and at times violent and intolerant attitude of the Greek state toward them. Racism: The state policies and initiatives in relation to racism, discrimination and respect of equality are far from efficient. Everyday petty racism against immigrants is the rule, while every now and then a murder of an immigrant makes front-page news. In polls, most interviewed Greek citizens have claimed that ‘it was most probably also the victim’s fault’ (VPRC, January 2006). In fact, no racist crime has been recognized as such by the Greek courts until today. While there is frequent public condemnation of the above views and there is a generalized anti-racist rhetoric, the main arguments and repertoires of racist discourse permeate a great part of the political class and parties. The media offer fertile ground for xenophobic and racist discourse, encouraging similar opinions and practices.
The outcome What will be the outcome for the young generations composed of different people with different ethnic and cultural backgrounds? Is this deregulated and critical landscape of Greece as an immigration country going to frustrate their dynamism or will the melting-pot forces of society prevail? And at what cost? Are we heading toward social exclusion and exploitation of the second and third generations, as has been the case with the first, or will this ongoing process be stopped and reversed? Whatever option you choose, it is important to see the immigrants not as illegal aliens, but workers with social rights; not as ‘Alvanakia,’ but young people and children; not as uninvited candidates for slave labor, but the bearers of rights with legitimate and urgent claims; not just for their own sake, but for the best interests of society in its entirety and mostly of its productive and farsighted people and groups.
Miltos Pavlou is director of the Greek National Focal Point for Racism and Xenophobia on behalf of the Hellenic League for Human Rights and of the Research Center for Minority Groups for the EU’s Fundamental Rights Agency and senior investigator at the Office of the Greek Ombudsman. Hellenic League for Human Rights (HLHR) website: www.hlhr.gr Research Center for Minority Groups (KEMO) website: www.kemo.gr
dialogue
Managing immigration By Kostis Hatzidakis
The latest Eurobarometer survey showed that, in the European Union, Greeks hold the most negative views (1.68 on a scale of 1 to 5) after the Maltese on the issue of immigration. Older reports indicated that less than half of those questioned in Greece (43 percent) believe that immigrants can benefit the economy. These results point to the ambivalence felt among the Greek public regarding immigration. It is inevitable that the influx of foreign workers to Greece causes a great deal of concern, especially if one takes into account the fact that the current system of dealing with immigration has significant flaws and that the country, owing to its geographical position, is exposed to human trafficking. It is important to realize that immigration is a problem that is here to stay, no matter how tough the border control measures we introduce are. Thus, it is of vital importance to try to regulate immigration as much as possible and to exploit the possible benefits for our country. Costs & benefits A survey by The Economist notes that immigrants who come for a given period of time and eventually return home when condi-
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tions allow it generally benefit the economy. Immigrants are often young and eager to work, and the receiving country has not had to spend any money to educate them. Immigration does not seem to increase unemployment within the native-born population because most of the immigrants take on jobs that natives avoid doing, or they create new ones. However, the benefits of temporary immigration tend to decrease once the immigrants decide to stay permanently in the host country. The failure to properly integrate migrants can lead to social unrest with serious consequences. The key to minimizing the costs and maximizing the benefits of immigration is to try to regulate it. The best way to do so is by helping impoverished countries to develop so that the conditions that cause emigration cease to exist. In addition, it is important to encourage immigrants to choose a legal way to enter our country for a short period of time. This can only be achieved through multinational agreements that establish schemes to encourage the temporary movement of people. The EU has already announced that it will open a job center in Mali, with the aim of sending workers to Europe for a short period of time to fill in gaps in the European job market. Such a scheme would benefit the sending as well as the host country. Through
remittances, immigrants will help their home country to develop economically and will eventually create the conditions to return. Surveys have shown that most immigrants wish to return to their home country if conditions allow it. Providing the conditions that would allow them to do so is the best way to deal with the problem of immigration. Border controls The alternative would be to impose stricter border controls. However, this measure would be costly and would discourage immigrants from returning home out of fear that they would never be able to leave again. Also, the prospective immigrant is more likely to choose to enter the host country legally than pay a fortune and risk his life in illegal trafficking. Most importantly, the host country will be able to control who enters its borders. Immigration is a global problem that is here to stay. The challenge for every society is to try to manage it in the best possible way so as to maximize the benefits and reduce the costs. Kostis Hatzidakis is a member of the European Parliament (EPP), Greece (ND). Kostis Hatzidakis’s website: www.khatzidakis.gr European Parliament website: www.europarl.europa.eu/members/public/geo Search/view.do?country=GR&partNumber=1&language=EL&id=2186
Underwater The recent agreements between the Republic of Cyprus and Egypt and Lebanon regarding the delineation of their respective economic zones in order to proceed in examining whether the hydrocarbons beneath the Eastern Mediterranean exist in quantities economically viable for exploitation remain today a hot political and economic issue. Ioannis Kasoulides, a member of the European Parliament and former foreign affairs minister of Cyprus, and Mikis Shanis, economist and politician, express their views on the political reverberations of the agreements, since the energy policy is closely interrelated with the political future of Cyprus. The questions raised are, therefore, whether the reserves of hydrocarbons will create the necessary energy for the reunification of Cyprus or will instead contribute to the finalization of the de facto partition, and what the best approach for the management of the problem at the political level should be.
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The future generation By Ioannis Kasoulides
The issue of Cyprus and hydrocarbons exploitation is nothing new. It has been established since 2000 that there are as yet unknown quantities of hydrocarbons, oil or gas under the Eastern Mediterranean Sea. Egypt has already succeeded in extracting and exploiting hydrocarbons lying beneath the waters of the Nile Delta. In accordance with the Law of the Sea, the Republic of Cyprus began negotiations in early 2000 and has now concluded agreements with Egypt and subsequently Lebanon to delineate their respective economic zones. Then began the
Oil and Cyprus
By Mikis Shanis ‘Cyprus has every right to decide and act as it considers appropriate in serving its national interests.’ This statement by the prime minister of Greece, Costas Karamanlis, after his meeting with Cypriot President Tassos Papadopoulos on February 21, may be interpreted as a position of principle based on international law or as a response to the Turkish reactions and provocative statements following the Cyprus-Lebanon agreement for the demarcation of the Exclusive Economic Zone. However, the main recipient of this statement is the Cypriot president himself, since, with it, Athens’s distance is affirmed both regarding the actions of Nicosia in the matter of its oil reserves and perception of its national interests. Nobody can doubt the right of the Republic of Cyprus to exploit its energy resources.
procedure to determine where in its own economic area substantial quantities of hydrocarbons could be found for extraction and exploitation. After initial studies in 2002, a study confirmed the high probability of hydrocarbons existing. Quantity & quality In order to assess whether exploitation is economically viable, we need to know what kind of hydrocarbons are there, in what quantities and quality and at what depth. The answers to these questions along with the possible first returns will come, at the earliest, seven years from now. In the meantime, Turkey is undermining — as always — the independence and sovereignty of the Republic of Cyprus by issuing bellicose
Reunification or de facto partition? Nevertheless a big question remains, together with the issue of oil reserves and their exploitation, as to how the oil policy is interrelated with the political future of Cyprus. Will the oil reserves create the necessary energy for the reunification of Cyprus or will they rather contribute to the finalization of the de facto partition? 1. The energy policy, as well as the economic development of a state, requires stability and patience. Real stability can only be safeguarded by an agreed solution to the Cyprus problem or by a course leading to a solution. 2. The discovery of oil reserves may create an additional motivation toward an agreed solution of the Cyprus problem in a way that all Cypriots can enjoy the natural wealth of their country together and without problems. The oil policy, therefore, may be part of a strategy for a solution and the reunification of
enigma threats; in this case claiming that the Turkish Cypriots, as co-founders of the Republic of Cyprus, are co-owners of any deposits to be found in the region. As things stand at the moment, despite shortcomings in some aspects of handling the whole matter, Cyprus must stay cool, proceed according to plan, in a discreet manner and with the minimum possible publicity. Too many statements and a lot of buzz have already been generated, most of it without any obvious real need. When the first possible opportunity arises, the Cypriot foreign minister must inform his partners in the European Union of the present state of affairs and pledge that should the possibility for oil or gas exploitation real-
the country and can contribute to the awakening of international interest in the Cyprus problem. However, this means an open, bicommunal dialogue and communication at all levels, which will overcome today’s deadlock and lack of trust between the two sides. A way to contribute to a solution is to include the energy issue and the handling of the natural wealth of the island in the agenda of the technical committees under the auspices of the UN. This will also be proof of the political will of the Greek-Cypriot side to share wealth and power with the TurkishCypriot community. We need to formulate a policy based on a long-term understanding of our national interests. We should seek to balance our interests and be ready to compromise, instead
ly exist, this will be pledged in a transparent manner to the future generations of all citizens of the Republic of Cyprus. All Cypriots of Greek, Turkish, Armenian, Maronite and Latin origin will enjoy the potential benefits, aiming at the development of the island’s economy, funding education, research and innovation, as well as supporting welfare and the social model. The minister should ask his colleagues to bear witness to this commitment and seek their solidarity. After all, the benefit for Cyprus will be a benefit for the EU as a whole. I would leave Turkey to weigh its own reactions, knowing that mankind’s need to look for additional sources of this scarce commodity is much more important than
of excluding each other and tending toward self-isolation. If we allow a narrow, conservative and static perception of the national interests to prevail, and the strengthening of one side against the other becomes the mainstream policy, this will surely lead to an escalation of ethnic rivalry and contribute to the partitioning tendencies. One-sided strategies If in Cyprus one-sided strategies dominate and there is no progress toward a solution, then the danger that the uncertain oil reserves will create tension and disputes will become a reality. This in turn will create a situation where the solution of the Cyprus problem, as well as the exploitation of the oil reserves, will become even less likely. I do not know who the winner will be if the crises intensification policy of the Turkish generals prevails. But I do know for sure that the perspective of peace and stability
the petty political or national considerations of any individual country. In this way, the onus of responsibility regarding possible reactions will be on Turkey, and any future dispute will be between Turkey and the multinational oil companies willing to undertake the task of research and exploration and possible exploitation, as it will be agreed between them and the government of Cyprus, in a transparent and equitable way. Ioannis Kasoulides is a member of the European Parliament (EPP), Democratic Rally - Dimokratikos Synagermos (DISY), Cyprus. Ioannis Kasoulides’s website: www.kasoulides.com
will be lost and the sovereignty of the Republic of Cyprus will be challenged. A unilateral approach to the oil issue and the prevalence of self-righteous behavior based on a concept of self-sufficiency of the Greek-Cypriot side will also strengthen the tendencies for direct trade between the EU and the occupied areas on the one hand, and will broaden the gap between Cyprus and the Greek Foreign Ministry on the other. Furthermore, it will cause even more damage to the credibility of Cyprus in the European Union. The national interests of Cyprus of 2007 do not coincide with nationalism, but they can be served better through the logic of compromise, of coexistence and cooperation. Mikis Shanis is an economist and secretarygeneral of the United Democrats party of Cyprus. United Democrats website: www.edi.org.cy
themes
impressions By Gazmend Kapllani
The leading mobile operator in Albania
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The many faces of Albanian Islam
Tirana It is noon when the plane lands at Aeroporti Nene Tereza, Tirana’s international airport. Most foreigners regard Albania as a Muslim country, although its only airport bears the name of a famous Christian saint, Mother Teresa. And, indeed, the Albanians fought vehemently against the Christian Slav-Macedonians to establish Mother Teresa’s Albanian origins when the latter proclaimed her as their own because she had been born in Skopje. It is one of history’s ironies, however, that the airport of a country where until very recently atheism had been forcibly imposed upon the population is today named after a saint. This fact alone makes one realize that the relationship Albanians have with religion has indeed gone through untold trials and tribulations. *** The recent emergence of nations found Albania the only nation-state in Europe with a Muslim majority. The instigators of Albanian national identity — quite unlike their Balkan neighbors — did not consider reli-
gion as one of the elements of national identity. It is not by chance that one of the most powerful dogmas that appears throughout Albanian historiography is the one maintaining that the Albanians are indifferent to religion. And as far as Islam is concerned, Albania, until 1967 when atheism was proclaimed throughout the country, was the world capital of the Bektashi, one of the most liberal and pro-Western sects of Islam. Beyond that, were you to ask an ordinary Albanian citizen about the nature of the relationship between religion and national Albanian identity, you could probably get as an answer a quotation from a poem by the Albanian poet laureate Pashko Vasa: ‘Oh Albanians, look not upon mosques and churches / the Albanian’s religion is Albanianism.’ Enver Hoxha, combining those verses with Marx’s apophthegm ‘Religion is the opium of the masses,’ went on to raze to the ground all religious shrines in the country. After the fall of the Communist regime, religion made a comeback in an atheistic society which was also extremely poor and was going through a serious identity crisis. *** It is Friday noon in downtown Tirana and I am watching the faithful flocking to the central mosque of the city. Since there is not enough space for all of them inside the mosque, many are laying their prayer mats on the sidewalk. I ask the driver of the taxi I am riding in for his opinion on the spectacle. ‘I am a Muslim,’ he says, ‘but I don’t like these goings-on. Where are we? Saudi Arabia?’ We can hear the hodja reciting the Koran from the top of the minaret: ‘A genuine Muslim is the one who does not drink alcohol and does not fraternize with those who do.’ I look at the taxi driver. He
looks at me. ‘How can you persuade an Albanian not to drink?’ he says and bursts out laughing. I pay my fare and get out. I see young women wearing miniskirts or stiletto heels cross the sidewalk next to the praying faithful. They don’t pay the least attention to the prone figures. Likewise, the faithful take no notice of them…
donia (FYROM) becomes apparent. In 2005, several Albanian politicians and men of letters publicly denounced the fact that ‘extremist Muslims’ were trying to manipulate the Muslim community of the country… It is evident that the traditional Islam professed by the Albanians finds itself under pressure from currents emanating mainly from the Arab world. ‘Arab Islam’ is offering to build mosques free of charge, the minarets of which, however, are different from the traditional Ottoman minarets. It is also offering money and aid for the poor. And in this country the poor are more than just a few…
Skopje The first thing one learns from a taxi driver in Skopje is that the city is divided into the ‘European’ and the ‘Albanian’ sectors — churches and crosses in the former, mosques and Islamic headscarves in the latter. As far as Islam is concerned, in Skopje one finds the most conservative Albanians. When I see so many women and girls wearing the headscarf in the old city, I cannot help but reflect that here the dogma of Albanian historiography is sorely tried… *** ‘Our Islam has no relation whatsoever with the Arab fundamentalism. It is the Islam of the Ottoman times,’ says Mohammed. He is an Albanian who lives in Skopje, works as a senior editor at the AlSat TV station and has an interesting background: He studied to become a hodja and was supposed to take over one of the city’s mosques. On the way he realized that journalism could offer him more… *** However, delve a bit deeper into the matter and the tension prevalent among the Muslim community in the Former Yugoslav Republic of Mace-
Pristina In the building where the operational center of the European Agency for Reconstruction is housed, the organization’s representative, Nurten Demiri, recounts to me the story of an Italian employee who arrived at Pristina carrying a burka in her luggage. She had been formerly stationed in Afghanistan, where she couldn’t even bare her hands. Since she had been told that the Albanians are Muslims, she thought she should stick to the same attire. When she arrived at Pristina, she realized that she would have found more women wearing the Islamic headscarf in Milan than in the former. *** When raising the subject of Islam in Pristina, my interlocutors remind me that the only Muslims throughout the
world who did not react to the notorious Mohammed cartoons were the Albanians. They also tell you that in their confrontation with the Serbs, the Albanians have never used any symbol with Islamic connotations. To the Albanians, the mosque was never a symbol of political resistance. And then they remind you that the now legendary Albanian leader Ibrahim Rugova had only three pictures hanging in his office: those of Skenderbey, Mother Teresa and Pope John Paul II… *** ‘Things, however, are not that simple,’ I am told by Gazmend, a journalist at the Koha Ditore newspaper. He comes from Mitrovica, a town in northern Kosovo near the border with Serbia which divides the Albanians from the Serbs. ‘Every time I go to Mitrovica, I am surprised at how full the mosques are,’ he says. ‘It wasn’t like that before. And certainly those guys with the Arab beards who claim to be teaching the ‘’proper Islam’’ are not just a few.’ However, in a country like Kosovo, where pro-Americanism verges on religion, it is difficult to get through to the people the jihad precepts and the enmity against the USA and the West. The other impediment those ‘born-again Muslims’ are facing is that they have to persuade the Albanians to give up alcohol. As the Albanians themselves say, it would be far easier to pass a camel through the eye of the proverbial needle than to make the Albanians give up alcohol. As for enforcing the wearing of the burka by the women, whoever has walked even once through the streets of Pristina knows that such a suggestion would be more in the realm of science fiction. Yet we are in the Balkans, where sometimes reality transcends even the most fertile imagination.
civilization
Strengthening fundamental spiritual values By His Beatitude Anastasios, Archbishop of Tirana, Durres and All Albania
The Christians of Europe have an historical obligation to substantially support the spiritual values that were born among them and in expressing their inner, deeper meaning. I would like to point out a few of these basic values: a. The enhancement of any person’s dignity as a basic human right. This principle, on which the legislation of European states has been founded, was subconsciously based on the belief as formed by the Christian faith. As Berdyaev notes: ‘Humanism and therefore human dignity may be reborn only by arising from the fundament of religion […] Human dignity presupposes the existence of God1.’ Human dignity is not some kind of vague bourgeois pride. It is based on the belief than man is a holy person, a creation of God personified. b. Consequent to the previous principle is the respect for each and every human be1. Nikolai Berdyaev, ‘Puti Gumanisma,’ Istina I Otkrovenie, St Petersburg, 1996, p 194; also in I. Alfeyev, mem. works, p 237.
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ing, regardless of origin, sex, education and religious beliefs, as well as the securing of that person’s freedom. Freedom is one of the most fundamental concepts of Christianity. God, who is totally free, created man to be free and therefore responsible for his actions. Dignity, freedom and responsibility are related to each other. Regarding personal freedom, as has been observed by Ecumenical Patriarch Vartholomaios, ‘our freedom is not only personal but transpersonal. As human beings we cannot be genuinely free while living in seclusion, while denying our relation with our fellow human beings. We can be genuinely free when we become part of a community of other free human beings. Freedom is not being secluded or solitary, but is social2.’ c. The Biblical belief in marriage and family has shaped the principle of monogamy, which became the nucleus of European society and determined the relations between the two sexes. It enhanced and inspired fidelity and self-abnegation as a basic element of its endurance. When this basic 2. Speech by His All Holiness Ecumenical Patriarch Vartholomaios at the London School of Economics (LSE) for the London Hellenic Society. ‘The Role of Religion in a Changing Europe’ (November 3, 2005). 3. Joseph Cardinal Ratzinger (Pope Benedict XVI), Values in a Time of Upheaval, Crossroad, New York, Ignatius Press, San Francisco, 2006, p 148.
structure is disrupted, society is driven to a decline. We, the Christian people of Europe, have the right, but also the responsibility, to defend these truths, on which anything great and pure created by European civilization has been based3. d. Each and every devout Christian is duty-bound to be a responsible citizen of his country and of Europe in general. He has to act consistently, honestly and creatively, he has to contribute to the shaping of a society of human beings, supporting justice, equality and solidarity in an ever-extending radius, beginning specifically with the people within his nation and to which he belongs, and then embracing all the people of Europe and expanding his concern for the predominance of these values throughout the world. e. The ascetic habit of frugality and abstemiousness, clearly prominent in the Eastern Christian Church, is becoming significant nowadays. Its cultivation could contribute to raising a bulwark against the onslaught of consumerism that threatens to overwhelm our life with the accumulation of useless things that are being promoted as necessities. f. Despite the progress and the many achievements of Western civilization, certain of man’s characteristics have reExtract from speech delivered at the GreekGerman Symposium ‘Perspectives for Europe,’ February 2007.
mained constant through the centuries: greed, violence, arrogance, bigotry and sin in general. In our age, more specifically, our private and social lives have been disrupted with the addition of things such as drugs, AIDS, a sense of loneliness and emptiness, a lack of meaning in life. It is certain, however, that idealistic generalities and a wooden tongue that mechanically repeats words of sacred meaning cannot solve these problems. Who will bring the throb to life? Faith is what we need and an enthusiastic support of Europe’s progress — faith in man and his future. The crystal-clear source for this kind of faith remains the truth found in the Gospels. g. Yet the great contribution that Christian faith has made, and so will remain in perpetuity, is the principle of love; with all its broadness, depth and height, this is the concept that has been given within the Christian faith. In this concept, the emphasis is placed on forgiveness and is of particular importance. The ability to forgive annihilates contrarieties and multifaceted enmities and leads to genuine reconciliation between individuals and people. The inspiration that the Christian faith has provided to millions of faithful believers, enabling them to experience forgiveness and love, is amply recorded throughout history. Without love, European civilization will be
deprived of impetus, strength and beauty. Therefore, the revival and not the marginalization of the Christian faith, the experience of its essence, power and beauty are going to aid European societies to retain their identity and develop those values that constitute the nucleus of European civilization, as well as their creative drive. Critical matters In order that we Christians remain in the spiritual vanguard of modern Europe, we have to pay greater attention to a few critical matters of a more general nature. a. It is imperative that we oppose the attempt to use religion as an excuse for acts of war, as well as for supporting and strengthening terrorism. In our times, religions still yield a certain influence, yet it is certain that they no longer determine the decisions of political leaders and financial factors. It is on the basis of different criteria and interests that the latter are arrived at. At the same time, however, the lips of conflicting leaders spout religious terms invoking God. In view
of this, religious conscience is called upon to put up the necessary resistance so that religious feeling will retain its sacred role: peace, serenity, forgiveness, healing of wounds. b. In the last century, the leading role in achieving social justice and protecting the poor had been undertaken in principle by the communist movement on the basis of atheistic presumptions. In our century, we see certain Islamic groups are pursuing to claim the leading role in protecting and defending the poor. It would be one of the greatest scandals ever if we were to allow in our century also the Christian world to remain indifferent to the subject of poverty, and to see the Christians ally themselves mainly with the rich and the powerful, ignoring the millions of their fellow men, in Europe and in the world in general, who live (or, to be more exact, are slowly dying) under the poverty margin. As, characteristically, Mohammad Yunus (Nobel Peace Prize 2006) recently 4. Conference of the National Congress Party of India, on the subject ‘Strengthening the Policy for Peace and Non-Violence’ (January 2007).
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pointed out, 60 percent of the Earth’s inhabitants live on only 6 percent of its resources4. The presence of the Church has to be ceaselessly prophetic and critical on the various aspects of insensibility in the face of destitution. It has to devote itself to ministering to those in need and giving itself the example of a frugal and abstemious life. c. The spiritual principles on which European civilization has been founded are universal. New Europe does not have the right to withdraw into itself or to act catering exclusively to its own interests. It had and still has universal responsibilities. This ecumenical vision is a direct consequence of the Christian conscience, and is a spiritual value indisputably European. It is high time that Europe, which in the last century dealt arrogantly and in self-interest with the people of the other continents, organized its ecumenical conscience and thought in
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order to do its duty by mankind, especially with regard to world peace and justice. The Christians of Europe have to take innovative initiatives toward solving the world’s problems and to be among the leaders in the struggle for the preservation of the environment and the establishment of world peace. We are envisioning a Europe which — inspired by the Christian ideals of respect for the value of each and every human being, of freedom and of love — will fight for the proper development of globalization, so that instead of suffering a process that turns people and individuals into soulless material to be exploited economically and politically by a nameless oligarchy, we may be able to proceed toward a globalization of justice and solidarity. d. Those circles which are endeavoring to belittle the contribution of the Christian faith to the development of Europe often invoke the total dominance of science and technology. Indeed, certain of them maintain that science and technology are in conflict with faith. Yet the Christian faith, within the framework of the general respect for the freedom of the human being, also accepts the liberty for seeking genuine knowledge. The Christian Orthodox Church especially has avoided any tendency to dominate over the development of scientific endeavor or to hasten to proclaim a ruling of its own for each new scientific question that arises, as certain Western churches tend to do. To the Christian Orthodox conscience the liberty to do research is a Godgiven gift to man. It is fortunate that in the Eastern tradition any kind of conflict between science and theology has been avoided as much as
possible. This is due to the double methodology employed by the Orthodox Fathers of the Church that is based on the ontological distinction between created and uncreated. In parallel though with this assertion, Christian thought points out the following: firstly, the dangers lurking behind certain scientific achievements; secondly, the limits of human knowledge; and, thirdly, the existence of another kind of ‘knowledge.’ When we emphasize the respect due to freedom and to the value of scientific research, we are also proclaiming, with the same and with even greater enthusiasm, in the next phase of application and the use of the new knowledge the importance and the value of a different category that exists, that of love. Love is not directly classified in the scientific field, but it has been proven however extremely necessary in defining the limits of freedom and in the development of the fruits of science, by restricting egocentrism and by providing a genuine communication with our fellow man, in the ultimate union of truth, beauty and love 5. 5. Anastasios Yanoulatos, ‘Orthodoxy Faced by the Rapid Growth of Applied Sciences,’ International Scientific Conference: ‘Science, Cutting-Edge Technologies and Orthodoxy’ (October 4-8, 2000) Athens, 2002, pp 33-43.
His Beatitude Anastasios is archbishop of Tirana, Durres and all Albania, Orthodox Autocephalous Church, and professor emeritus of the University of Athens. Orthodox Autocephalous Church of Albania website: www.orthodoxalbania.org
‘Ode to the Olive Tree’ A study focusing on the role of the olive tree in all aspects of Greek life, taking a particularly folklore, historical and archaeological approach to the subject. General Secretariat for the Olympic Utilization, Hellenic Folklore Research Center of the Academy of Athens 1st Release: June 2004 & 2nd: July 2006.
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Various authors, bilingual publication (GR-EN),
Making a difference Brigadier General Georgios Makridis was head of 27 Greek officers and NCOs who spent eight months in Kabul, Afghanistan, in a Peace Support Operation as members of the Southeastern Europe Brigade (SEEBRIG). Their mission started in January and finished successfully in August 2006. They were positioned in one of the most difficult and dangerous areas in the world, facing not only extreme weather conditions but also asymmetrical attacks from the Taliban. During their stay in Afghanistan, however, Brigadier General Makridis (then a colonel) met the Afghan deputy minister of culture and visited the Sakandar Kabir school, showing another side of the Greek military presence there.
Brigadier General Makridis, during your stay in Kabul you discovered another side of Afghanistan. Could you tell us more about this? I was head of Greek personnel in SEEBRIG, and I was pleasantly surprised when I found out that the Afghan deputy minister of culture, Mr Omar Sultan, had a close relationship with Greek history and culture. He had graduated from the Archaeological Department of the Aristotle University of Thessaloniki. I was keenly interested in meeting him, and so an unofficial meeting was arranged and, on July 10, 2006, a Greek delegation visited the Ministry of Culture in the center of Kabul. The Afghan minister welcomed us in his office with a big smile and telling us ‘Kalimera!’ Meeting him was like meeting an old friend. He spoke with us cordially, emphasizing the good time he had in Greece and his work as assistant of the famous Greek archaeologist
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Brigadier General of the Greek Army Georgios Makridis interviewed by Katerina Anastasaki
Professor Manolis Andronikos during his excavations in Vergina. I remember him saying, ‘Greece is like my second country and I feel proud that I participated in these excavations that shed more light on the glorious story of Alexander the Great, a Greek king and the man who brought the Greek culture and civilization to my country, Afghanistan, thousands of years ago.’ Mr Omar Sultan told us about his life in Afghanistan and the efforts to rebuild the National Museum in Kabul after the defeat of the Taliban in 2001 and the financial help that Greece had provided for this purpose. It was, somehow, incredible to see a 70-yearold Afghan minister speaking Greek and using a computer to show us photos of excavations in Greece and Afghanistan with the same subject: Alexander the Great.
How did you get to know about the Sakandar Kabir school? That was another pleasant surprise for me. The minister informed me that, besides the rebuilding of the museum, a school had been built with Greek money and was named Sakandar Kabir — that is, Alexander the Great. When we left the Ministry of Culture there was no question in our minds that we had to visit that school. All the Greek military personnel of SEEBRIG chipped in voluntarily in order to collect some money and prepare our visit and our donation to 700 students of the Sakandar Kabir school. We set off first thing in the morning of July 13, 2006, from our military camp in Kabul. The school is located on the outskirts of the city. We were really anxious about what we would encounter. When we arrived at the school the hesitant expressions of the local
people and the children soon changed to smiles. Kids were screaming with joy, running back and forth welcoming the Greek soldiers in the warmest manner. We were astonished by their reactions and all that positive energy loosened us up, dissipating our stress and everyday problems. In a polite way and after coordination with the school headmaster our gifts — consisting of pencils, paper, schoolbags and notebooks — were presented to the students inside their classrooms. Their gratitude and joy was clearly depicted in their smiling little faces, making us feel happy and satisfied that we had offered them the opportunity, probably for the first time, to have contact with soldiers that gave them other kinds of weapons with which to fight for their future… and this is very important in Afghanistan, where schools are the primary target of the Taliban. We also donated a sign with the Greek and Afghan flags, the name of the school and the date we were there as a reminder of our visit to the school, which we installed. Considering the fact that the students were in an exam period, we left early, allowing them to continue their schoolwork but promising to come back. In conclusion, I could say that the Greek military personnel serving in SEEBRIG during its mission to Kabul showed that they were there in order to assist the people of Afghanistan in establishing peace and democracy and a better future for the children, who are the most tragic victims of this war against insurgency and terrorism. SEEBRIG website: www.seebrig.org
OTE'S SATELLITE: HELLAS SAT A BRIDGE IN THE SKY OTE Group is Greece's leading telecommunications organization and one of the pre-eminent players in Southeastern Europe. Apart from serving as a full service telecommunications group in the Greek telecoms market, OTE Group has also expanded during the last decade its geographical footprint throughout South East Europe, acquiring stakes in the incumbent telecommunications companies of Romania and Serbia, and establishing mobile operations in Albania, Bulgaria, the Former Yugoslav Republic of Macedonia and most recently in Romania. πts portfolio of solutions ranges from fixed and mobile telephony to Internet applications, satellite, maritime communications and consultancy services.
bone connectivity; direct internet access, content distribution networks, business television and video distribution and subscription-based news distribution, distance learning; telemedicine; and telephony. HELLAS SAT has developed a network of strategically located teleport partners with high-standard DVB platforms carrying today over 100 TV channels and IP-based services through its two fixed beams over Europe and two steerable beams over the Middle East and South Africa. From high-power direct-to-home transmissions to occasional video feeds and internet access services, HELLAS SAT offers much more than just capacity. As one of the most pioneering companies in Greece and SE Europe, HELLAS SAT is actively involved in all the initiatives aiming to bridge the digital divide for broadband access.
HELLAS SAT value combines high-quality services at affordable prices, with professional business practices and dedication to customers needs.
The Hellas-Sat Net@! Service which was introduced a year ago delivers high-speed internet access to the home where land infrastructure is not present. The service is ideal not only for Greece but for all the developing countries and economies of the region.
Hellas-Sat 2 carries a number of different services for public and private sectors within the coverage region. These services include video and audio broadcast, cable TV feeds, DTH and data; VSAT networks, IP back-
With its multicultural content, the diversity of its clients and the vast area of coverage in three continents, HELLAS SAT has established itself as a bridge in the sky, bringing people and civilizations closer.
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HELLAS SAT is the owner and a wholesaler of capacity and services of the Hellas-Sat 2 satellite which was launched successfully in May 2003. HELLAS SAT is a member of OTE Group, where OTE is the major shareholder with 99.05%.
Middle East: The level of gender equality in the Middle East remains today not only a matter of women’s emancipation in the region, but also a crucial step toward democracy and economic development, and the consolidation of social and political rights. ’The root of the problem lies in fundamentalism, the patriarchal model or the lack of political will to modernize national legislation or implement international law and commitments in full.’ So, today, what is the level and the quality of gender mainstreaming in the Arab world, where the headscarf tends to prevail and the restrictions of Muslim law are often applied? Rodi Kratsa, first vice president of the European Parliament, and Professor Zafiris Tzannatos, adviser to the World Bank Institute based in Beirut, Lebanon, try to tackle the issue, taking into account the inherent cultural and traditional aspects that characterize the area. Furthermore, although gender mainstreaming in the Middle East still has a long way to go, nobody can deny that women are today at the gate, since their situation is slowly but steadily improving as regards education, employment and legal rights. It must also be noted that ‘it is not that long since the West underwent the gender transformation — sometime between the end of World War II and the 1960s. It may not be that long before something similar happens in the Middle East.’
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The patriarchal model Euro-Mediterranean cooperation is a political vision and a vital project for the European Union and the Mediterranean countries, the main objective being the creation of a common area of peace, security, stability and prosperity. Therefore, women’s rights are considered as a priority field, as part of the respect of fundamental rights and as a significant parameter for social cohesion and development. Within this framework, the lack of significant progress toward gender equality in all fields of economic, social and political activity must be underlined. Moreover, there are considerable variations as regards the situation of women and the reforms needed from one country or group of countries to another (Maghreb, Mashriq and the applicant to the EU countries). Fundamentalism The root of the problem lies in fundamentalism, the patriarchal model or the lack of political will to modernize national legislation or implement international law and commitments in full. The need to improve the situation of women in the Euro-Mediterranean countries is urgent and the effort still required must be continuous in order to confront forms of discrimination at the level of legislation and its implementation, or to change the dominant patriarchal mentality. First, all countries must ratify the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW) without any reservations about the provisions concerning women’s rights such as marriage, divorce and acquisition of nationality. Second,
By Rodi Kratsa
the equality of men and women in the political, economic and social spheres of life must be ensured by means of a multidimensional approach and by the application of various measures in all of the aforementioned areas. It is no coincidence that violence against women remains a problem in most if not all of the countries of the region. As social institutions fail to criminalize gender-based violence of all forms (domestic violence, forced marriage, crimes of honor), it is widely practiced since there is legal and social impunity. The labor market Furthermore, although the number of women in the labor market has increased in recent years, there are still considerably fewer women than men and there is a marked horizontal segregation. Women’s employment is concentrated in public administration, education, health, agriculture and social services. Partner countries should boost the number of employed women by fixing an employment rate, as well as by offering incentives for women to reconcile their professional lives with household duties. An even more active educational policy also must be pursued, since the growing level of women’s education has a positive
Women at the gate Gender mainstreaming impact on economic growth. In addition, the training and participation of women in the activities of syndicate unions and NGOs needs to be enhanced. Euro-Mediterranean partnership The European Union, using its experiences and good practices regarding gender equality policies, must encourage the introduction of principles against discrimination for a more balanced participation of the sexes. Through the Euro-Mediterranean partnership and the permanent dialogue established between the two sides gender equality issues must be included in all EU policies, programs and projects for the region and the gender dimension should be systematically taken into consideration in their evaluation both at European and national levels. Finally, it is of great significance as well that women on both sides of the Mediterranean are in contact and collaborate in order to know each other better and promote their common future together. Such opportunities exist in all sectors through the MEDA programs and other regional initiatives, such as the one I proposed for the inauguration of the ‘Euro-Med Woman of the Year Prize.’ A prize to be awarded annually to the southern and northern organization or individual deemed to have made, in cooperation with other Mediterranean actors, the greatest contribution to promoting women’s rights. Rodi Kratsa is first vice president of the European Parliament (EPP), Greece (ND), a member of the Euro-Mediterranean Parliamentary Assembly (EMPA) and vice president of the EMPA’s ad hoc Committee of Women’s Rights.
By Professor Zafiris Tzannatos
The position of women in the Middle East is often pitied not only by outsiders but also by those Arabs who feel that gender equality remains elusive in their own countries. In fact, if the headscarf is used as an indicator (admittedly, a crude and probably improper indicator for many comparisons), there have been quite a few instances in the last few decades where its use in public places by Muslim women has experienced an increase, at times a mandatory one. The headscarf lends itself to various interpretations, including the perfectly benign one of its voluntary use. However, even leaving aside the misapplication to the Arab world of the case of women in Afghanistan under the Taliban rule, the ease with which marriage can be terminated by men (though not by women), the not uncommon prohibitions on women owning property or driving or more generally being unaccompanied by a male close family member in public places, restrictions or outright bans on women’s political rights from voting or being elected, the non-transferability of citizenship from mother to child, and similar restrictions in the broader economic, social and political spheres that apply in various degrees to various countries, all point to the fact that women are not just treated unequally, but that the extent of inequality is so great that it may take generations before women in the Middle East get anywhere close to where their Western counterparts are today. This article addresses the latter point by putting forward the proposition that, while inequalities exist in many aspects of private and public life in the Middle East, women there are already at the gate. Profound structural changes in all forms of public life are under way, though often invisible at a first glance. These changes are evolving in parallel to the attention gender mainstreaming is receiving at the global level, including via the universally adopted Millennium Development Goals (MDGs, 2000) and the earlier Convention on the Elimination of All Forms of Discrimination against Women (CEDAW, 1979). The rest of this article focuses on this proposition through an examination of recent regional trends in the fundamental areas of fertility (as a proxy for family norms), education (as a proxy for female capabilities), and the labor markets (as a proxy of female empowerment). Plummeting fertility rates While in the 1950s the Middle East had the highest fertility rates in the world, its fertility rate declined faster than in any other region. The average number of children per woman dropped from more than seven in the 1950s to fewer than four in the 1990s, a figure which was on a par with South Asia and considerably lower than in Africa (6+). On the latest count (2002), average fertility reached 3.2 children. The decline can be highlighted with reference to Egypt, where, following the first national population poli-
Rodi Kratsa’s website: www.rodikratsa.gr
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cy in 1973, the contraceptive prevalence rate rose from 21 percent (1980) to 50 percent (1996) and fertility dropped from 5.1 to 3.3 children per woman. And although not an Arab country, a reference to Iran is illuminating: When the annual population growth rate reached the alarming level of 3.2 percent in 1986, the government introduced a population policy that nearly halved the fertility rate within 10 years (from 6.4 to 3.8 children per woman by 1996) and reduced the population growth rate by even more (to 1.4 percent). Education The school enrollment ratio of girls to boys in the region did not exceed 60 percent in the 1960s. However, the ratio increased fast and now stands at more than 95 percent, having reached parity in many countries. As a result, the average female schooling increased from less than one year in 1950 to nearly five years by 2000, and the female literacy rate went from 17 percent in 1970 to 53 percent in 2000. An interesting development is that in higher education there are often more girls than boys, and this phenomenon is more common in the Gulf countries, where in some cases there are three women university students for each man. A parallel move has been to allow women to enroll in previously considered inappropriate subjects, such as engineering, from which they used to be barred by decree. Employment As in the case of fertility, women’s employment in the Middle East was also an outlier in the 1950s. The regional female labor force participation rate stood at less than 12 percent in the 1950s, which was only one-third of the global average of 36 percent. It has since shown a faster rate of growth, more than doubling by the 1990s, with the greatest gains occurring in Jordan, Lebanon and Egypt. Today it is not that uncommon — compared to the recent past — to see women occupying senior government posts, including ministerial appointments, as well as executive positions in the private sector or distinguished academic posts. This provides an impetus for women’s economic empowerment and role formation for the future generations.
An assessment It is difficult to assert whether the gains to women arising from the aforementioned increase in female literacy, reduction in fertility and greater participation in the labor force have translated fully into economic, social and political returns. Most likely they have not. Furthermore, though women’s education has increased significantly, it is still concentrated in subjects that perpetuate sex stereotyping in employment. And, while women’s employment increased faster in the Middle East than in any other region, female labor force participation remains the lowest in the world at around 30 percent, compared to the second lowest, the predominantly Catholic Latin America, where the rate is around 45 percent. Finally, employment segregation in the Middle East is still the highest in the world and is declining at a slower rate than elsewhere. In some countries civil and company laws impose restrictions on women’s ownership, and women are discriminated against in the areas of pensions under social security laws and inheritance under family law. However, improvements in female education create important dynamics both for family formation and also for the repositioning of women in public life. Wives can now be as or more educated than their husbands, while women have increased employment opportunities and greater control over resources. The increase in women’s productivity can in turn accelerate economic growth. As the Middle East has long suffered from low rates of economic growth, women’s productivity can hardly remain unnoticed by policymakers. In the legal field, most countries have constitutional provisions relating to the equality of all citizens, and this paves the way for harmonizing family, civil and labor laws with the broader proclamations on equality. When such operational laws are introduced, they will further change the division of bargaining power within households and women’s aspirations, thus reinforcing the existing trends and patterns of change. The gender transformation It is not that long since the West underwent the gender transformation — sometime between the end of World War II and the 1960s. It may not be that long before something similar happens in the Middle East. If gender mainstreaming refers to greater attention to the goal of gender equality via education and gender-sensitive resource allocations, policy development, research and legislation, the glass in the Middle East is filling up fast, though it is still half-empty. Professor Zafiris Tzannatos is adviser to the World Bank Institute, based in Beirut, Lebanon. The views expressed in this article are those of the author and do not necessarily represent those of the World Bank or any specific country or authority. World Bank website: www.worldbank.org
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www.ggoa.gr
Unity in diversity Today, following the accession of Romania and Bulgaria, the European Union is home to nearly half a billion people from diverse ethnic, cultural and linguistic backgrounds. The linguistic patterns of European countries are complex — shaped by history, geographical factors and the mobility of people. Since January 1, 2007, the European Union recognizes 23 official languages, thus the EU motto ‘Unity in diversity’ is more valid than ever. The ability to communicate in several languages is a great asset for individuals, organizations and companies. It enhances creativity, scotches cultural stereotypes, encourages thinking outside the box and promotes innovation whether in business or in society in general. All these advantages point to a real economic value. Multilingualism & competitiveness Multilingualism boosts competitiveness by stimulating people’s mobility in the pursuance of educational or professional opportunities. In other words, multilingualism is crucial for achieving the overarching policy aim of the European Union. Let us not forget that the Lisbon Strategy aims at sustaining economic growth and creating more and better jobs. The Commission’s multilingualism policy is aimed at drawing these various strengths together. Its objective is to: Encourage language learning and promote linguistic diversity in society; Promote a healthy multilingual economy; and Provide citizens with access to European Union legislation in their own languages.
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By Katerina Anastasaki
In order to preserve and foster Europe’s languages, the European Commission invests 30 million euros annually in areas such as training, mobility of students and teachers and funding class exchanges. Translation & interpretation Given their obligations toward EU citizens and governments, it is not surprising that the EU institutions employ large numbers of linguists. In fact, about one-third of the university graduates employed by EU institutions consists of either translators or interpreters. Before the 2004 enlargement, the main institutions — the European Commission, the Council of Ministers and the European Parliament — together translated nearly 3 million pages of texts a year. The annual cost of translation and interpretation was about 2 euros for every EU citizen. With the increase in official languages from 11 to 20 and then to 23, the price is going up, but it will not double. This is because, in their internal work, the EU institutions streamline the use
of languages and enlargement has encouraged the development of cost-cutting devices. For instance, on a day-to-day basis, the European Commission uses three working languages — English, French and German. Draft policy papers and draft legislation are produced in one or more of these languages. Only at the final stages are the texts translated into all 23 official languages. The European Parliament, which often needs to produce documents rapidly in all official languages, has developed a system of six pivot languages (English, French, German, Italian, Polish and Spanish). If texts were translated directly from all official EU languages into all the others, this would give a total of more than 400 bilateral combinations. The three new official languages Irish Gaelic is the 21st official European language since January 1, 2007. For practical reasons, it was decided that only regulations adopted by the European Parliament and the Council under the co-decision procedure will have to be available in Gaelic. Other legislative acts will be exempted for a transition period of five years to allow time to train and recruit translators. Gaelic translation will start with a workforce of five translators. Since Ireland’s accession in 1973, Gaelic has had the status of a Treaty language. Therefore, the primary legislation, including the accession agreement
interpreting services have seven Bulgarian and six Romanian interpreters as well as access to a pool of Bulgarian and Romanian accredited freelance interpreters. and certain other pieces of legislation, has already been translated into Gaelic. For the accession of Bulgaria and Romania, all legislation and documents of major political importance have had to be published in Bulgarian and Romanian and citizens, authorities, businesses and other organizations in the two countries have been entitled to communication with the EU institutions in those languages. As with previous enlargements, the Commission had to recruit translators to make sure it meets its legal and political obligations in terms of written communication from the day of accession. The first Bulgarian and Romanian translators started working with the Directorate General for Translation (DGT) to create Bulgarian and Romanian translation memories and compile terminology in January 2006. Language training courses for translators wishing to acquire a knowledge of Bulgarian or Romanian had been running at the Commission for several years before the two countries’ accession. The DGT’s aim has been to recruit 60 translators for each of the new languages; to this number should be added support staff (assistants, IT specialists etc). All translators recruited are posted to Commission headquarters, apart from a small number of contract staff who will be posted to the DGT Field Offices in Sofia and Bucharest. About one-fifth of the translation work is done by freelance agencies all over the EU, but quality assurance is carried out
in-house in order to make sure that the standards of translation supplied by freelancers remain as high as possible. EU interpreters use a similar system when providing full interpretation into and from all 23 official languages. For instance, a Finnish speaker’s words will be interpreted into a limited number of relay languages. A Slovenian interpreter, for example, will plug into one of these as the source language, removing the need for people who can interpret from Finnish into Slovenian. Using linguistic shortcuts of this kind makes practical and economic sense — provided standards are maintained. Quality control of both interpretation and written translation is therefore a major activity. On any one day, the interpretation service of the European Commission and the Council of Ministers has to cover about 50 separate meetings in Brussels or at other EU locations. An event which provides full interpretation into and out of the EU’s 23 official languages requires a team of more than 60 interpreters. DG Interpretation has been engaged in training interpreter trainees from Bulgaria and Romania since the early 1990s. The EU
The cost The total cost of interpretation in the EU institutions in 2006 was about 195 million euros, equivalent to 42 euro cents per citizen per year, and is not expected to rise significantly following the accession of Bulgaria and Romania and the addition of Gaelic. In 2007 the cost of translation in the Commission is estimated to total around 302 million euros. This boils down to a cost to each citizen of around 63 euro cents per year. The addition of three new official languages will not increase the cost to the public. In 2006 the total cost of translation in all EU institutions is estimated to have been 800 million euros. The total cost of all translation and interpretation in all EU institutions is less than 1 percent of the total EU budget of 112 billion euros. One could say that this is money well spent for the reason that language is an integral part of our identity and the most direct expression of culture. It is through language that we socialize, organize our thoughts and transmit our cultural heritage. Languages build bridges to other people and cultures.
Katerina Anastasaki is an English language teacher and international relations coordinator for The bridge. Sources: European Commission website: http://ec.europa.eu/index_en.htm European Union website: http://europa.eu/languages/en/home
culture
Balkan Rajko Grlic, the eminent Croatian director who currently lives in the USA, not only decided to take the risk of making a satirical movie about the everyday life of the former Yugoslav army, but his film Border Post premiered with great critical acclaim in all the countries of the former Yugoslavia: FYROM, Serbia, Montenegro, Bosnia-Herzegovina, Croatia and Slovenia. ‘I wanted to talk about this moment before the madness, to make a film about those people who will be transformed, in a matter of months, into soldiers, refugees, victims and criminals,’ he explains in his interview with The bridge regarding the film that captured the audiences and turned into a box-office winner in Southeastern Europe. The film takes place in the spring of 1987 at a small border post on the Yugoslav-Albanian border. The soldiers are bored and counting the days until the end of their service, when a lieutenant, afraid that his wife will find out about the sexually transmitted disease he has caught, decides to claim that the Albanians are preparing to attack, so that he won’t have to go back home. What starts as a silly cover-up soon turns into mass hysteria. The real tragedy, though, is that the viewer knows that in reality the everyday characters of Border Post will soon be engaged in tragic bloodshed. It must be noted that Grlic is Ohio eminent scholar in film at Ohio University of Athens, Ohio, and artistic director of the Motovun Film Festival of Croatia. He has directed and co-written 10 theatrical feature films, which have received more than 50 international awards, including the Tokyo International Film Festival ‘Grand Prix’ and ‘Best Director.’ He has also written nine produced feature screenplays and two television serials. Grlic has received numerous awards for writing, including a UNESCO award, FIPRESCI award and the Peter Kastner award. He also wrote, directed and produced the CD-ROM How to Make Your Movie — An Interactive Film School, awarded with eight international awards including the ‘Grand Award’ for best multimedia at New York Festival 1998.
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Rajko Grlic interviewed by Dimitra Ampela
How would you describe yourself and your background? How did you get into filmmaking? I was born in 1947 in Zagreb, Croatia, in the country that at that time was called Yugoslavia. My father was a philosopher and a professor of aesthetics and my mother was a journalist and writer. When I was 14, I found a Bell & Howell 8mm camera under the family Christmas tree. Eight years later I graduated in feature-film directing from FAMU, the Prague Film Academy, in the country that at that time was called Czechoslovakia. At 24, I directed my first feature film. Seven feature films later, I left Croatia for political reasons and moved to the USA. From then on, I spent my life as a filmmaker on both continents, writing, directing, producing and teaching film. In short, I lived, I live now, and probably I’ll die, as a filmmaker. A moment of silence Border Post is about the last days of peace before the war in ex-Yugoslavia. What inspired you to make this film and why did you decide to tell this story through a comedy? As we all know, on the eve of any natural disaster — be it a summer storm or a total cataclysm — there is always a moment of total silence. It’s that fine moment when everything stops, but also the moment when no one wants to talk about it. It happens in nature, in societies, and in entire civilizations. Border Post is a comedy that takes place during such a moment. Returning home to make a film after so many years, I wanted to talk about this moment before the madness, to make a film about those people who will be transformed, in a matter of months, into soldiers, refugees, victims and criminals. How did they used to live? What did they really want? What was everyday life like? What engendered the war and why was the war implanted into our minds so quickly and so easily? Comedy was a very natural genre for such a dark subject. That’s more
Border Post than each of these countries could dedicate to one project. So we used the Nordic principle, where Nordic countries are more or less involved in all film productions from their region. At the same time, with the help of Eurimages, we managed to include producers from England, France, Hungary and Austria. This nine-country combination worked quite well. Audience manipulation Border Post won the audiences. How important these days do you think is the response of the media and critics to films, be it a large production, an independent film or a festival title? or less the only serious thing we can do against our own darkness — laugh, and laugh loudly. The challenges What were challenges were you presented with during the making of the film? Making a film always means jumping from a boat in the middle of a storm — without any shore on the horizon. Your chances of survival are very slim and you are making the film while desperately trying not to think of your predicament. On the other hand, this was — officially — the first postwar co-production of all ex-Yugoslavian countries, which was another, very special and very complex challenge. We were aware that we needed to produce some results to give hope to those who’ll follow our path. In this part of Europe — you can call it Ex-Yugo or the Balkans, or be more politically correct and call it Southeastern Europe — we all share more or less the same language, and we have in common a big portion of collective memory... So it’s quite natural that, if we want a bigger audience for our films, we need to combine our forces. It’s not an easy task after all this blood and such carefully built-up hate, but it’ll work — it’s just a question of time.
I’m one who believes that we are making films or, better to say, telling our stories, hoping that someone will listen to us in the end. So, yes — the audience is very important to me. They are the third player in this game between a director and a film. Without them, a film basically doesn’t exist. The media and critics are a different story. Unfortunately the power of the media — the way the money and the big corporations are involved in the decision about who will be promoted and how — overshadows the voices of critics more and more. But I see some hope these days with the internet. It’s wild, it’s out of control and it’s becoming an extremely strong critical voice. And this critical voice will be much harder to manipulate.
What are your future plans? What projects will you be working on after Border Post? With Ante Tomic — the writer with whom I wrote the Border Post script — I just finished the first draft for a film called Zagreb’s Steak. It is a story about the double lives of five people — two middle-aged couples and a young lady — set in today’s Zagreb, the capital of Croatia. An erotic melodrama with a touch of comedy told through the eyes of five very different characters.
How did you finance Border Post? Was it hard to raise funding for the film? It took us three years to finance this project. We put this all-Ex-Yugoslav production combination in place for a very pragmatic reason, not a political one. In the case of Border Post we needed a little bit more money
Rajko Grlic’s websites: www.rajkogrlic.com / www.howtomakeyourmovie.com
culture
Compiled by Alexandra Ioannidou
Balkan history and linguistics
Common vocabulary and syntactic and morphological phenomena in the different Balkan languages have led to the formation and development of Balkan linguistics as an established field of studies. Balkan history, on the other hand, is more slippery and has some very interesting, though often differing, aspects to present. History of the Balkans by Barbara Jelavich, for example, constitutes a classic monograph on the subject, as does Maria Todorova’s Imagining the Balkans. The relatively recent wars in Yugoslavia have raised many questions that are being analyzed in a number of works — some very interesting — referring either to one country or to the Balkan peninsula as a whole. This is the significant point in the scholarly treatment of any Balkan question: A ‘Balkan studies’ approach to the area presupposes tracing and stressing the common features of the Balkan countries’ development — whether these are to be found in the Roman, Byzantine or Turkish empires and/or in the process of the nation-states’ formation. Otherwise, discussion of every single Balkan country separately, without taking into consideration the common links, would countermand the idea of a single, unifying field of Balkan studies as such. Here we will focus contrastively on two books on Balkan history that have found many enthusiastic readers — Robert D. Kaplan’s Balkan Ghosts: A Journey through History1 and The Balkans2 by Mark Mazower. Although the two books are different in their approach, they do share the intention to address the general reader, the non-specialist. We shall also examine John B. Allcock and Antonia Young’s Black Lambs and Grey Falcons: Women Travelling in the Balkans, a highly sapid book featuring travelers’ impressions.3 1. Robert D. Kaplan, Balkan Ghosts: A Journey through History, St Martin’s Press, NY, 1993. 2. Mark Mazower, The Balkans, Weidenfeld and Nicolson, 2000. 3. John B. Allcock and Antonia Young (eds), Black Lambs and Grey Falcons: Women Travelling in the Balkans, University of Bradford: Bradford, 2002.
Nation-states, nationalism the Ottoman Empire
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Mark Mazower, best informed about the construction of the Balkans as a concept, does not obey the tradition of the allied Western reporting on the ‘savage countries.’ He dedicates his introduction to the name and its history: ‘From the very start, the Balkans was more than a geographical concept. The term, unlike its predecessors, was loaded with negative connotations — of violence, savagery, primitivism — to an extent for which it is hard to find a parallel.’ It is self-evident that Mazower does not adapt any such kind of prejudices the way Kaplan does. After an extensive first chapter on the peninsula’s geography and history, Mazower examines the region’s character and common features before, during and immediately after the creation of the nation-states, which he treats as the most important historical 4. M. Mazower, p 15.
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development. One of the most interesting points of his presentation is his criticism of recent historiographers’ nostalgia for the time of the Ottoman Empire: ‘Because the Balkans have had a bad press for so long in Europe, it has been hard for some scholars to resist bringing out the region’s virtues. National histories — until very recently — presented the past as the inevitable and entirely deserved triumph of the Nation over its enemies. More recently, disillusionment with nationalism has bred nostalgia for the days of empire; a new trend in Ottoman historiography emphasizes ethnic and religious coexistence under the Sultans, and turns the empire into a kind of multi-cultural paradise avant la lettre.’4 The six chapters of the book make use of interesting facts from the fields of geography, social anthropology and history. First published in 2000, the book touches on the episodes of 1999; however it takes into consideration neither the Bosnian war (1992-1995) nor the Kosovo issue, which had actually been brewing since 1987. Alexandra Ioannidou is lecturer at the Balkan, Slavic and Oriental Studies Department, University of Macedonia, Thessaloniki, Greece. University of Macedonia website: www.uom.gr
book reviews Memories and mythology In Balkan Ghosts, Robert Kaplan has chosen to present each Balkan country separately, illuminating particular events that have remained in people’s memories and recent mythology. The titles, such as that of the prologue, ‘Saints, Terrorists, Blood and Holy Water,’ are intended to indicate some kind of a common, dark and exotically fearful destiny of the Balkan countries, defining their similarities as unusually violent. He then proceeds to discuss these similarities in different chapters, equivalent to the respective borders: Yugoslavia, Romania, Bulgaria, Greece. Kaplan does not care about truths and myths — he just reproduces discussions, narratives, impressions and prejudices. Among the biggest prejudices is the belief that Southeastern Europe is a dark, violent place that never got to know the blessing of the Enlightenment: ‘Conflicting ethnic histories,
inflamed by the living death of Communism, had made the Balkan sky so foul that now, sadly, a storm was required to clear it. (…) The Enlightenment was, at last, breaching the gates of these downtrodden nations.’ Apart from the well-founded objections as to his scholarly consistency, Kaplan manages to retain the reader’s interest. His book is captivating in its vivid, journalistic language and the way he reports on his travels in the area brings to mind older travelers’ memoirs. Balkan Ghosts has been criticized by historians for errors, cliches and generalizations.5 Indeed, the narrative unfolds in a series of episodes which prove ‘that the people of these alienated countries do indeed form an unhappy whole’ — as the reviewer of The New York Times, in his ignorance on the subject, allowed himself to be convinced. 5. See review by Henry R. Cooper, Jr, Slavic Review, Vol 52, No 3 (Autumn 1993), pp 592-593.
Travelers’ stories and impressions First published in 1991, John B. Allcock and Antonia Young’s Black Lambs and Grey Falcons: Women Travelling in the Balkans presents the lives and writings of women travelers in the Balkans in the 19th and 20th centuries. The essays collected in this anthology document the experiences of women who visited the Balkans during different periods — not as tourists, as the editors stress in their introductory note, but as travelers. The distinction made in the introduction is very attractive: ‘The word “tourist” is not necessarily a derogatory one: but the essential character of tourism is that travel is undertaken for recreation. (…) The traveller, on the other hand (…) is engaged in serious business indeed. Travelling is an occupation: it is a legitimate end in itself.’6 By ‘serious business’ they mean — in most of the described cases — political engagement for one or another country and policy. Some of the women whose work is described in the book, such as Flora Sandes, Edith Durham, Adeline Irby, Georgina Muir MacKenzie 6. Op cit, p xxvi.
and Rose Wilder Lane, at one time or another campaigned openly for the cause of particular Balkan peoples whose interests they espoused. Rebecca West can be seen differently: Her work Black Lamb and Grey Falcon (the title of which is borrowed for that of the anthology) is indeed a meditation on the theme of power. The editors consider it a ‘reflection on the nature of the Empire.’ Other women in this book settled in the region and tried to survive and keep their families intact during the wars, such as Louisa Rayner, who lived in a Serbian village during WWII. Apart from the wonderful narratives these women present, their work is interesting and relevant in part because of their portrayal of Balkan societies: Whether they intended this or not, these writings have contributed to the formation of public opinion on the Balkans. The collection of articles compiled by Allcock and Young is well worth reading.
5 The Bosporus Bridge Instanbul, Turkey by Incanus (www.flickr.com)