Demonstrators hold a banner reading 'Kosovo' and wave flags during a protest against the accord on the normalisation of relations between Serbia and Kosovo in Belgrade. Photograph: Getty Images.
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The western Balkans are in danger of sliding backwards

The EU cannot afford a wait and see approach that creates the risk of economic divergence and renewed instability.

Fifteen years after the wars that devastated and divided the former Yugoslavia, the countries of the western Balkans are facing a different kind of challenge: the risk of permanent marginalisation as part of Europe’s “super-periphery”, a zone of stagnation beyond EU’s troubled southern rim. That has been one of the under-reported consequences of an economic crisis that has simultaneously derailed the region’s efforts to catch up with the rest of Europe while sapping the EU’s enthusiasm to admit new member states. It is the reason why all seven Prime Ministers from the region are gathering in London today for an economic development conference hosted by the European Bank for Reconstruction and Development.

A defining feature of transition economies is their ability to achieve growth rates that put them on a convergence path with the highest income countries. That is what the countries of Central and Eastern Europe managed to achieve in the years before and after EU accession. Judged by this measure the economic transition of the western Balkans has stalled with a double-dip recession, inadequate investment flows and unemployment running at around a quarter of the adult population. Growth is just beginning to return, but at levels that effectively amount to stagnation. Without a return to a higher growth path, the countries of the region will remain stuck at less than a third of the EU’s average wealth per capita.

It should be acknowledged that the nations of the western Balkans face significant economic difficulties that are not of their own making. Their relative distance from the EU’s largest and wealthiest markets and their proximity to Greece mean that they have felt the impact of Europe’s economic crisis more than most. But as a paper published by the London School of Economics last year found, there is a specific “western Balkans effect” that inhibits inward investment and retards economic development. This is the result of serious deficiencies in politics and governance that the leaders meeting in London need to address.

The first aim should be to reduce the political risk factors involved in doing business in the region. The Balkan wars are a fading memory, but there has been little in the way of real reconciliation. The different ethnic communities of Bosnia-Herzegovina continue to live separate lives. Serbia has normalised relations with Kosovo, but refuses to recognise it. Even Greece’s unresolved objection to the description of FYROM as Macedonia disfigures the politics of the region. As long these dividing lines and enmities remain frozen, investment will look like a risk.

One legacy of this political division has been to limit the scope of regional economic integration, raising costs and reducing opportunities for potential investors. Despite laudable initiatives like the Regional Co-operation Council and the Central European Free Trade Agreement, good intentions are not always matched by delivery and trade between countries in the region is far lower than it should be. Efforts to promote reconciliation and deeper economic linkages should go hand in hand, helping to convince investors that renewed conflict is unlikely.

The second issue that needs to be addressed is the absence of strong, market supporting institutions, like clean government and independent courts, needed to uphold the rule of law and protect property rights. Problems like corruption and the lack of judicial independence are responsible for a business climate that, according to international indices, falls far short of European standards. The political elites are viewed as predatory, using legal and administrative tools to intimidate businesses and secure financial and political favours.

Some efforts have been made to address these problems. But too often reform is superficial, introducing new laws and procedures without any change of underlying behaviour. For example, the European Parliament expressed concern about provisions in Serbia’s criminal code that give the authorities broad scope to criminalise commercial activities that are considered perfectly normal in any functioning market economy. Serbia revised its code and then reopened all of its existing cases under the new Article 234. An estimated 1,500 business people are currently under investigation (including Serbia’s second wealthiest entrepreneur, Miroslav Miskovic) often for doing little more than making a profit.

This creates real policy problems for the EU. Faced with its own internal pressures and economic difficulties, it needs to export the European model of governance, rather than import more problems from the western Balkans. Further enlargement will not therefore happen quickly or easily to a region with mass unemployment and limited economic prospects. But the EU cannot afford a wait and see approach that creates the risk of economic divergence and renewed instability across the western Balkans. It needs to redouble efforts to promote lasting change and real economic convergence

The traditional legalistic process in which the terms of accession are laid out and the member states are expected to demonstrate compliance on their own initiative won’t work any more. Getting countries of the region up to European standards will require a much more intensive form of supervision and a willingness by the EU to be firmer and more interventionist in dealing with the most serious deficiencies. But the political will to do that unless the region’s leaders first show that they mean business. That should be the message coming out of today’s meeting.

David Clark is the founder and editor of Shifting Grounds, and served as special adviser to Robin Cook at the Foreign Office from 1997 to 2001

David Clark was Robin Cook’s special adviser at the Foreign Office 1997-2001.

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Rarely has it mattered so little if Manchester United won; rarely has it been so special they did

Team's Europa League victory offers chance for sorely needed celebration of a city's spirit.

Carlo Ancelotti, the Bayern Munich manager, memorably once said that football is “the most important of the least important things”, but he was only partly right. While it is absolutely the case that a bunch of people chasing around a field is insignificant, a bunch of people chasing around a field is not really what football is about.

At a football match can you set aside the strictures that govern real life and freely scream, shout and cuddle strangers. Football tracks life with such unfailing omnipresence, garnishing the mundane with regular doses of drama and suspense; football is amazing, and even when it isn’t there’s always the possibility that it’s about to be.

Football bestows primal paroxysms of intense, transcendent ecstasy, shared both with people who mean everything and people who mean nothing. Football carves out time for people it's important to see and delivers people it becomes important to see. Football is a structure with folklore, mythology, language and symbols; being part of football is being part of something big, special, and eternal. Football is the best thing in the world when things go well, and still the best thing in the world when they don’t. There is nothing remotely like it. Nothing.

Football is about community and identity, friends and family; football is about expression and abandon, laughter and song; football is about love and pride. Football is about all the beauty in the world.

And the world is a beautiful place, even though it doesn’t always seem that way – now especially. But in the horror of terror we’ve seen amazing kindness, uplifting unity and awesome dignity which is the absolute point of everything.

In Stockholm last night, 50,000 or so people gathered for a football match, trying to find a way of celebrating all of these things. Around town before the game the atmosphere was not as boisterous as usual, but in the ground the old conviction gradually returned. The PA played Bob Marley’s Three Little Birds, an Ajax staple with lyrics not entirely appropriate: there is plenty about which to worry, and for some every little thing is never going to be alright.

But somehow the sentiment felt right and the Mancunian contingent joined in with gusto, following it up with “We’ll never die,” – a song of defiance born from the ashes of the Munich air disaster and generally aired at the end of games, often when defeat is imminent. Last night it was needed from the outset, though this time its final line – “we’ll keep the red flag flying high, coz Man United will never die" – was not about a football team but a city, a spirit, and a way of life. 

Over the course of the night, every burst of song and even the minute's silence chorused with that theme: “Manchester, Manchester, Manchester”; “Manchester la la la”; “Oh Manchester is wonderful”. Sparse and simple words, layered and complex meanings.

The match itself was a curious affair. Rarely has it mattered so little whether or not United won; rarely has it been so special that they did. Manchester United do not represent or appeal to everyone in Manchester but they epitomise a similar brilliance to Manchester, brilliance which they take to the world. Brilliance like youthfulness, toughness, swagger and zest; brilliance which has been to the fore these last three days, despite it all.

Last night they drew upon their most prosaic aspects, outfighting and outrunning a willing but callow opponent to win the only trophy to have eluded them. They did not make things better, but they did bring happiness and positivity at a time when happiness and positivity needed to be brought; football is not “the most important of the least important things,” it is the least important of the most important things.

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