This article was downloaded by: [Duke University Libraries] On: 05 January 2012, At: 11:33 Publisher: Routledge

Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of European Integration

Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/geui20

Creeping EU Membership in Southeast Europe: The Dynamics of EU Rule Transfer to the Western Balkans
Stephan Renner & Florian Trauner
a b a b

Austrian Energy Agency, Vienna, Austria

Institute for European Integration Research, Austrian Academy of Sciences, Vienna, Austria Available online: 09 Jul 2009

To cite this article: Stephan Renner & Florian Trauner (2009): Creeping EU Membership in Southeast Europe: The Dynamics of EU Rule Transfer to the Western Balkans, Journal of European Integration, 31:4, 449-465 To link to this article: http://dx.doi.org/10.1080/07036330902919988

PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.tandfonline.com/page/terms-andconditions This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae, and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand, or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material.

European Integration Vol. 31, No. 4, 449465, July 2009

ARTICLE

Creeping EU Membership in Southeast Europe: The Dynamics of EU Rule Transfer to the Western Balkans
Downloaded by [Duke University Libraries] at 11:33 05 January 2012

STEPHAN RENNER* & FLORIAN TRAUNER**

*Austrian Energy Agency, Vienna, Austria **Institute for European Integration Research, Austrian Academy of Sciences, Vienna, Austria
stephan.renner@energyagency.at StephanRenner 0 400000July(print)/1477-2280 (online) 31 Taylor andEuropean 2009 &Article OriginalofFrancis Integration 2009 0703-6337 Francis Journal 10.1080/07036330902919988 GEUI_A_392170.sgm

ABSTRACT The countries of the Western Balkans have all been subsumed under a preaccession framework that is comparable to previous enlargement rounds, but with two main differences: the EU has thus far refrained from naming a timetable for eventual membership and supports flexible forms of integration in different policy fields. With only a loose prospect of membership, how strong is the EUs influence in the Western Balkans? With our empirical examples, drawn from energy policy and Justice and Home Affairs, we argue that the incentive of membership remains powerful in terms of initiating EU rule transfer. The key to successful rule adoption in the Western Balkans is to provide clear and tangible short-term incentives. Rather than full membership, the result is sectoral integration and a creeping process towards EU membership. KEY WORDS: Energy policy, European integration, Europeanization, external governance, Justice and Home Affairs, south-east Europe

Introduction The European Union has been in an external policy quandary over the Western Balkans,1 oscillating between inclusion and exclusion. On the one hand, the EU understands that security, prosperity and stability in the Western Balkans depend, to an important extent, on offering these countries a European perspective. Consequently, all countries have the status of potential or de facto candidates for eventual EU membership. On the other hand, the EU is, once again, held back by an evident form of fatigue: This time it is the fatigue de llargissement. Several member states remain against the quick accession of
Correspondence Address: Stephan Renner, Austrian Energy Agency, Mariahilfer Strae 136, 1150 Vienna, Austria. E-mail: stephan.renner@energyagency.at
ISSN 07036337 Print/ISSN 14772280 Online/09/040449-17 2009 Taylor & Francis DOI: 10.1080/07036330902919988

450

Stephan Renner & Florian Trauner

more states, particularly the small yet rather unstable countries of the Western Balkans, and criticize the lack of domestic reforms in the respective countries. In such a patchy situation, how strong is the EUs leverage in the non-member states of south-east Europe? Is the prospect of EU membership for the Western Balkan countries simply much ado about nothing? In order to kill two birds with one stone, that is, to increase stability through maintaining a European perspective while postponing any eventual enlargement until an internal EU consensus emerges on how to proceed in the next phases of enlargement, the EU pursues two strategies. First, it continues with the pre-accession strategy. Here, however, the Union faces a fundamental commitment deficit: without a clear time frame regarding a future EU membership for the countries in the Western Balkans, the prospect of membership remains only an abstract possibility without palpable political implications. For this reason, and with everything we know from recent studies of EU enlargement (Grabbe and Hughes 1998; Sedelmeier 2000; Wallace 2000; Schimmelfennig and Sedelmeier 2004; Vachudova 2005), we cannot expect these countries to implement the acquis communautaire. Secondly, the EU supports stability through regional integration strategies and tangible sectoral short-term incentives. Starting with one policy field, the EU hopes to spill-over regional integration into other fields. The EU thus tries to reproduce itself in south-east Europe with the goal of providing a model for regional integration. The overall objective of this dual strategy is to create an extended zone of governance beyond the current border of the EU. This paper analyses the political implications and results of the EUs dual strategy in the Western Balkans. The analysis proceeds by presenting two empirical examples in this regional setting. The first example is derived from Justice and Home Affairs (JHA) and highlights the operation of the preaccession strategy in south-east Europe. In March 2003, the EU launched jointly with NATO, the OSCE and the Stability Pact the Ohrid Border Process, aimed at committing the Western Balkans to modernizing their external border security regimes based on the European border model. Within a three-year period, the six countries were expected to re-organize their external border control sector and increase their professionalism by establishing non-military border-guarding structures. The second example considers the EUs efforts to initiate a process of regional integration in south-east Europe. In October 2005 the European Community and nine countries in south-east Europe signed a multilateral treaty to establish an Energy Community. This was the first legally binding treaty between the countries of the Western Balkans after the wars of the 1990s, and it demands the adoption of the relevant acquis in the partner countries. These empirical examples, drawn from JHA and energy policy, do not confirm the assumption that the EU has only limited influence on the nonmember states of south-east Europe. We argue that the EU managed to incite rule adoption in the Western Balkan countries; however, it was done differently than in previous rounds of enlargement. Successful EU rule transfer depends on the incentive structure the EU is able to provide in the respective policy field. Since the incentive of membership is still powerful

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

451

but less tangible, the key to EU rule adoption is to offer clear, short-term incentives in various policy fields. The consequence of the EUs external governance approach is that rule adoption in the Western Balkans does not evolve in a teleological process towards full integration, but rather in sectoral approximation in a creeping process towards EU membership. Creating an Extended Zone of Governance One of the most fascinating features of the EUs system of governance is its tendency to reproduce itself outside of its own borders (Bretherton and Vogler 1999, 249). The EU uses its unique institutional characteristics to domesticate relations with non-member states and to project internal solutions onto its external relations. In this context, the term external governance represents the ability of an actor to influence the rules that govern social entities beyond its borders. It is the extension of internal rules beyond formal membership that the notion of external governance seeks to capture (Lavenex 2004, 695). The European version, which is to say the spread of EU rules, political organization and modes of governance beyond its territory and a process of change in national institutional and policy practices that can be attributed to European integration, can then be called Europeanisation (Hix and Goetz 2000, 27; Olsen 2002, 937).2 The European Union has a long tradition as a rule exporter. During its four waves of enlargement, the Union has expanded its regulatory framework into candidate countries and has undoubtedly contributed to the democratic consolidation of new member states (Pridham 1991). This pre-accession process itself constitutes a rigid form of external governance since it consists precisely of aligning the candidate countries with the EU acquis. However, enlargement will soon cease to be the predominant EU mode of dealing with its neighbouring non-member states. With each round of enlargement, the number of potential candidates decreases and the remaining countries will find it harder to meet the conditions for membership than the countries that were recently admitted. For these reasons, the policy of enlargement is likely to lose its central position as an external policy strategy of the EU. Now that enlargement is becoming less of an external policy option, other forms of external governance are being considered and prepared. They all centre on the notion of rule transfer to third states. However, why would a non-member state accept the EUs influence and adopt its rules and institutions? Rational materialists and realists expect non-member states to adopt EU rules only if they have credible incentives to do so. This rational logic assumes that governments choose, within the limits of their knowledge, the best available means to achieve their goals (Chong 1996, 39). The lower the external incentives and the less favourable the domestic opportunity structure, the higher the cost of adaptation and the less likely it is that governments will take the political risk of harmonizing their national legislation with the EU acquis (Hofer 2007, 120). According to this argument, the EU has to provide convincing incentives to non-member states in order to initiate a process of rule adoption.

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

452

Stephan Renner & Florian Trauner

The empirical studies on the process of rule export from the EU to nonmember states support this argument. Schimmelfennig and Sedelmeier (2004, 2005b), Vachudova (2005), Lavenex (2006, 2008), Hofer (2007, 2008) and others use a rational external incentive model. They argue that governance by conditionality occurs in a hierarchical setting based on the export of predetermined EU rules. In the recent rounds of enlargement, the process of exporting those rules to non-member states remained patchy or slow unless the EU offered a credible prospect of EU membership and a credible linkage of membership with rule adoption (Schimmelfennig and Sedelmeier 2005a, 221). This major pre-condition is not necessarily in place in south-east Europe: it is not certain when or even if the candidate countries will receive the ultimate reward of EU accession. Faced with a European public opinion increasingly opposed to further enlargement, European political actors have been unwilling to specify the accession horizon for the aspiring candidates. In December 2006, the European Council declared that the Union will refrain from setting any target dates for accession until negotiations are close to completion. Furthermore, the Western Balkans accession prospects will also depend on whether or not the EU manages to reform its treaty basis. According to the Commissions enlargement strategy (2006, 15), a new institutional settlement should have been reached by the time the next member is likely to be ready to join the Union. Therefore, the Irish no vote to the Lisbon Treaty might harm the Western Balkans membership aspirations. France, Germany and Luxembourg have already called for a stop of the enlargement policy if the new treaty does not enter into force (Agence Europe 2008a). As a result, it would be reasonable to suggest that the EUs strategy of reinforcement by reward (Schimmelfennig, Engert, and Knobel 2003) is not as strong and credible as it was in the previous round of enlargement. Our empirical examples drawn from JHA and energy policy, however, do not confirm this assumption. We advance the argument that the EU managed to transfer its rule to the Western Balkans, yet that the dynamics of EU rule transfer were distinct to previous enlargements (the notable exception to our argumentation is Croatia, which has already started with formal accession negotiations). Rule adoption in the Western Balkans does not evolve in a broad road to membership as in the latest rounds of enlargement, but rather in a creeping process towards membership where adjustment to certain policy sectors requires some sort of short-term incentives. In the EUs preaccession strategy for south-east Europe, the organizational form of the EU third state relationship has changed. While the existing EU rules are still predetermined and non-negotiable, not all countries of the Western Balkans have to adopt the whole acquis within a clearly specified timetable. Rather, they come closer to the EU in a relatively open and uncertain process and have more room to manoeuvre when deciding in which policy fields they want to integrate. Rule adoption in the non-member states of south-eastern Europe therefore depends on the incentive structures the EU is able to provide in the respective policy field. The key for successful EU rule transfer is to offer clear short-term incentives (e.g. visa concessions, support for

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

453

Table 1. Major differences between previous enlargements and the Stabilisation and Association Process Previous enlargements Prospect of membership Time frame for membership Rigidity of EU rules Scope of EU rules and regulations for transfer credible promise of membership clearly circumscribed deadlines non-negotiable whole EU acquis Stabilisation and Association Process questionable promise of membership no target dates for accession, open process non-negotiable selected policy fields within the EU acquis

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

regional integration) in combination with the still powerful but less tangible incentive of membership (Table 1). We studied rule transfer in two policy areas across two countries of the Western Balkans: Macedonia and Serbia. The reasons for choosing these two countries were threefold. First, we wanted to take significant cases in terms of the political relevance of the policy field in the respective countries. The reform of Macedonias border security system was considered particularly urgent and thus highly relevant in the wake of the 2001 near-civil war, when Albanian insurgents from the National Liberation Army managed to cross the border into Macedonia without any difficulty. Therefore, the improvement of border security was seen as an important measure in securing the overall stability in the country. The political relevance of energy sector reforms in Serbia is derived from the economic difficulties at the end of the Milosovic era. The sector urgently needed external support and political reforms. Secondly, both countries are similar in their unspecified and rather remote prospect of EU membership. Even though Macedonia was granted the status of a candidate in December 2005, it still lacks an official date for an eventual start of negotiations regarding EU accession. And, finally, we wanted to control possible effects of the social constructivist variable positive identification with the EU (King, Keohane, and Verba 1994, 140). We thus included Macedonia as a pro-European example and Serbia as a country with a high degree of euroscepticism in both the general population and the political elites. Serbian euroscepticism was reinforced by the parliamentary elections in May 2008 when Boris Tadics For a European Serbia became the strongest political force, yet the eurosceptical parties (Democratic Party of Serbia, Radical Party and the Socialist Party) jointly gained a majority of the seats in parliament. The Pre-accession Framework for the Western Balkans The EU has a strong interest in extending its influence in the Western Balkans. Because of the conflicts of the 1990s, stability in the Balkans in Europes backyard became the priority of EU policies. The EU wants to

454

Stephan Renner & Florian Trauner

demonstrate its ability to promote post-conflict stabilization and rehabilitation, and is well aware that the the credibility of [its] foreign policy depends on the consolidation of [their] achievements there (ESS 2003, 9). Because of this strategic interest in the region, the EU has introduced a preaccession framework. After the end of the Kosovo conflict in 1999, Albania, Serbia and Montenegro, Croatia, Macedonia and Bosnia and Herzegovina were all granted the status of potential candidates and subsumed under a new institutional framework. The EUs Regional Approach of 1997 was replaced by the Stabilisation and Association Process aimed at bringing the countries closer to European structures with the final objective of full integration into the EU. The explicit prospect of EU membership for the countries in south-east Europe was then offered by the European Council in Feira in June 2000 and at the south-east Europe Summit in Zagreb in November 2000 (European Council 2000, Point 67). After first being announced, the prospect for membership was reiterated several times, most notably at the European Council of Thessaloniki that was largely dedicated to EUWestern Balkans relations. In addition, it defined the improvement of regional cooperation in south-eastern Europe as an important condition for closer institutional affiliation with the EU. The demand for integration in addition to the fulfilment of a whole range of political and economic reforms is the cornerstone of the EUs principle of conditionality in the region. In exchange for these demands, the EU offers powerful incentives for the Western Balkan states to comply with EU conditionality. The most important incentives are access to the Stabilisation and Association Process, the conclusion of a Stabilisation and Association Agreement (SAA) and, consequently, the status of a candidate for EU membership. In each case the Stabilisation and Association Process is a bilateral affair between the EU and the applicant country. In exchange for the fulfilment of political and economic conditions in selected policy fields, the aspiring candidate state proceeds on the gradual process towards EU membership. Macedonia was the first country to sign a SAA with the EU in April 2001, followed quickly by Croatia in October 2001. In December 2005, the European Council (2005) granted Macedonia candidate status, although it refrained from indicating when the country would actually begin the membership talks. Croatia, in turn, became a candidate country in June 2004 and started with accession negotiations in October 2005; the country hopes to be ready to join the EU by 2010. The other countries Albania, Serbia, Montenegro and Bosnia and Herzegovina are less advanced on their way to the EU. Albania signed the SAA with the EU on 12 June 2006. Montenegro started with separate negotiations after the countrys independence, and successfully signed the agreement on 15 March 2007. While Serbias president Boris Tadic signed the agreement in Brussels in April 2008, the implementation of the interim SAA is currently blocked by the Netherlands which calls for the arrest of Radko Mladic as proof of the full cooperation with the International Criminal Tribunal for the Former Yugoslavia (ICTY). The EU holds no formal contractual relations with Kosovo, although it seeks to assume a greater responsibility

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

455

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

in the stabilization of the province. Following Kosovos declaration of independence on 17 February 2008, the EU appointed a special representative and launched the EULEX mission to help the Kosovo authorities in all areas related to the rule of law. Bosnia and Herzegovina signed the SAA in June 2008, after negotiations were stalled for some years over progress in a number of priorities, most notably on full cooperation with the ICTY, police reform, broadcasting legislation and public administration reform. In sum, all countries in the region have the prospect of becoming members of the European Union. In its external governance, the EU thus continues the pre-accession strategy that it developed during the accession process in Central and Eastern Europe and demands the harmonization of domestic legislation to the EU acquis. However, since EU membership is not realistic in the short term, the EU also supports new forms of flexible integration in different sectors. The EU does not ask all the countries to adopt all the rules and regulations within a predefined deadline. The countries in the Western Balkans have more flexibility to set priorities regarding the policy fields, the roles they want to adopt and the expected rewards. These parallel strategies complement each other and provide the countries of the Western Balkans with incentives for rule import. The examples from JHA and energy policy will support this argument and demonstrate the dynamic of EU rule transfer to the Western Balkans. Acquis Adoption in Justice and Home Affairs: Visa Liberalization as an Extra-incentive Our first example for the creeping process towards EU membership is taken from JHA. In the Western Balkans, many of the countrys state institutions are considered ineffective in terms of fighting organized crime, illegal migration, trafficking in human beings and smuggling activities. Within the policy field of JHA, the EU was heavily concerned with the 5000 km of new international borders in the Western Balkan region that emerged from the break up of the former Yugoslavia. These borders were frequently ill-demarcated, poorly protected and characterized by a lack of regional structures and networks to tackle common cross-border problems. The EU therefore placed a strong emphasis on reshaping the weak institutional arrangements regarding border policies, also against the background of the EUs broader efforts to establish a closer nexus between internal security and external action (Lavenex 2004, 2006; Mitsilegas 2007; Rees 2008; Wolff, Wichmann, and Mournier 2009). In fact, the EU expected the Western Balkan states to re-organize their external border control systems according to the EUs integrated border management concept. Besides border control, this concept also encompasses trade facilitation and border region cooperation. It should also serve as the main instrument for tackling the interrelated problems of porous borders and cross-border problems. The EUs approach aims to establish open but secured borders and includes as one of its key components, the request to transfer the operational responsibility for border policing from the army to

456

Stephan Renner & Florian Trauner

the police. All military should be withdrawn from border controls and the chain of command shifted from the Ministry of Defence to the Ministry of the Interior (IBM Guidelines 2004). In encouraging the Western Balkans to take up the EUs border management model, the EU relied not only on its immediate pre-accession framework, but also on the joint efforts of different international organizations to improve border security in the Balkans. In May 2003, representatives of NATO, the OSCE, the EU and the Stability Pact met with specialists from the Western Balkan countries in order to address the sensitive issues of border security and management. Named after the location where the conference took place, the Ohrid Border Process has pursued the main objectives of coordinating the activities of the four international actors and of committing the Western Balkans to modernizing their external border security regimes. The whole process is based upon the implementation of concrete measures outlined in the two founding documents, the Common Platform and the Way Forward Document. Concerning the time schedule, the documents specified that 2006 would represent the end of the transitional period in which the countries were to implement short- and mediumterm commitments (Ohrid Regional Conference on Border Security and Management 2003, 2). The progress achieved by the end of this time frame was significant. In terms of demilitarizing the borders and transferring the chain of control from the Ministry of Defence to the Ministry of the Interior, Macedonia was the first country to complete the process in August 2006. In Serbia, full completion was scheduled for the first half of 2007 while, in Albania, arguably the country with the weakest border control system, the process was in motion with a mid-term focus of completing civilian control of the borders. Furthermore, all Western Balkan countries have adopted a national integrated border management strategy and four have already finalized the process of drafting a corresponding Action Plan. In terms of enhancing regional cooperation the third major objective of the Ohrid Border Process there was evidence that regionally coordinated border management had been fostered among all countries, although some were already at a more advanced level and some were only at their initial stage (Stability Pact 2007). In a situation where border security is a politically sensitive and costly issue and the road towards EU accession remains long, why did the countries of the Western Balkans adopt the EUs border management model? In the words of a Macedonian official from the countrys mission to the EU, there are people who are questioning why we are taking such a painful progress and the process is very painful, especially for a society in transition like Macedonia. We had a different system for 50 years so you can imagine how difficult it is to align the legislation and procedures and to change the minds of the peoples in the administration. (interview M6, 8 February 2006, Brussels) So why did the Macedonian government accept the EUs demands after all?

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

457

Macedonias choice for rule adoption was affected by two main incentives. First, EU rule transfer was accepted due to the expected pay-offs of full membership. In Macedonia, EU integration constitutes a shared national objective which has been, according to a declaration of the National Assembly, declared since its independence and permanently and strongly supported by the political parties and the citizens (Government of the Republic of Macedonia 2004, 3). Since the 2001 security crisis, the EU has defined the reform of the Macedonian JHA sector as a central element in stabilizing the country and improving inter-ethnic relations. The EU was particularly concerned with the transformation of the police into a capable, depoliticised, decentralised, community-based, multi-ethnic police service which is responsive to citizens needs, accountable to the rule of law and transparent (Ioannides 2006, 71). In the police reform process, the transformation of the external border control system was embedded as an important component. The stipulations of the 2001 peace accord, the Ohrid Framework Agreement, dealing with the reform of the police and related policy areas were incorporated into the SAA and defined as pre-conditions for advancing in the EU integration process. In principle, Macedonia had therefore already accepted the EUs integrated border management concept as part of the conditionality requirements in the gradual process towards EU accession. However, the key to understanding why reform of the external border control system became a national reform objective is to take into account a second EU reward at a more subordinated level: the liberalization of the Schengen visa regime. In Council Regulation 539/2001, Macedonia, together with Serbia, Montenegro, Albania and Bosnia and Herzegovina, was placed on the list of countries whose citizens require a visa to enter the EU. Since that moment, visa liberalization has been an issue of highest political salience in the country. Being on the EUs negative visa list has created strong perceptions of isolation and exclusion, since it has made travelling into the EU too expensive for many citizens of the country. In turn, the EU linked the facilitation of the visa regime and eventually the visa-free status to the fulfilment of a whole series of conditions: measures against illegal border crossing and the spread of fake travel documents, the signing of readmission agreements, an aligned visa regime, etc. This strategy has proven very powerful in Macedonia. The prospect of a more relaxed visa regime unified the domestic political actors and societal forces in their efforts to integrate in the JHA sector. By speedily adjusting to EU standards, Macedonian authorities hoped to convince their European counterparts that the country is capable of effectively guarding its external borders. Rather than a country of origin or transit of unwanted migration flows, Macedonia wanted to be regarded as a partner-country in the EUs broader efforts to control irregular migration flows in Europe. In the domestic debate, the question dominated as to how the coveted perspective of visa liberalization could be achieved as soon as possible. Several NGOs and youth organizations observed what Macedonia has done until now and demanded their government speed up their efforts in the policy field.3 The fulfilment of

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

458

Stephan Renner & Florian Trauner

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

the criteria relating to visa-free travel became a shared national objective which superposed all purely national agendas in the field. Against this background, the Macedonian authorities considered the Ohrid Border Process to be a useful additional framework because it provided them with a clear time frame and guidelines how to reform the external border control system domestically (interview M20, 4 May 2006, Skopje). Where possible, they tried to finish the demanded tasks ahead of schedule. In reaction to these efforts, the country was allowed to sign an EC visa facilitation and readmission agreement in September 2007 which makes travel easier for certain categories of the population and reduces the handling fees for all.4 On 8 May 2008, the European Commission gave Macedonia a roadmap specifying the measures that need to be taken in order to further proceed towards visa free-travel. According to the European Commissioner Jacques Barrot, this roadmap will encourage the country to continue implementing the relevant reforms and reinforcing cooperation at regional level and with the EU in areas such as strengthening the rule of law, fighting organised crime and corruption (Agence Europe 2008b). The case of successful rule adoption in the area of JHA in Macedonia highlights the EUs strategy towards the Western Balkan countries. The EU has used its visa regime as a short-term incentive to increase its influence and speed up the process of transferring EU rules to Macedonia. Although the prospect of EU membership remains loose, the Macedonian government has accepted the EUs demands because it wants to achieve both a closer institutional affiliation with the EU and facilitated travel opportunities for its citizens. Acquis Adoption through Regional Integration: The Energy Community of South-east Europe In order to spice up the traditional pre-accession process that lost its clear teleological orientation due to the European Unions internal fatigue de llargissement, the EU not only provided extra incentives for specific issues such as changes in the visa regime, but also supported regional integration strategies as a means of facilitating rule export. One example is the Energy Community of south-east Europe. In this mode of external governance, full membership is provided within a formal organization that is based on the same principles as the EU itself. A duplicated process of integration in south-east Europe would serve either as an intermediate step towards full membership, or in case the EU does not endorse full membership for the countries of the Western Balkans as a medium-term alternative to full membership. It is because of this reluctant process towards full integration while pushing for sectoral regional integration that we speak of creeping integration in south-east Europe. In energy policy, the European Community and nine of the states or territories in south-east Europe Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia, Albania, Romania, Bulgaria and UNMIK on behalf of Kosovo signed a multilateral treaty in October 2005 establishing

EU Membership in SE Europe: Rule Transfer to the W Balkans

459

an Energy Community. This treaty was the first legally binding treaty between these countries after the wars of the 1990s, and was the result of the so-called Athens process that began in 2001. The signatory states committed themselves to establishing the legal framework for an integrated and liberalized energy market in their countries and to adopting the relevant EU acquis communautaire on energy, environment, renewables and competition (European Commission 2005). Consequent to the Athens process and the Energy Community Treaty, the Serbian government started to restructure the energy sector along the requirements of the energy acquis. In order to understand the initial success in this project of regional integration, we have to consider the different motivations at the European and domestic level. In a politically volatile situation at the end of the 1990s, even before the NATO bombings on Yugoslavia and before the prospect of EU membership was given, a small number of Commission officials from DG TREN developed the idea of setting up a South East Europe Regional Energy Market (SEEREM) (interview EU13, 12 April 2005, Brussels). In their early efforts the Commission officials used the existing coordinative structures provided by the Stability Pact for South Eastern Europe.5 Negotiations for a joint communication of all countries in south-east Europe supporting a regional energy market began. This was the origin of the so-called Athens process (Renner 2009). From 2001 onwards the European Commission took the leading role. The Athens process resulted in two memoranda of understanding where the countries in the region committed themselves to create a regional energy market in electricity and natural gas on the basis of EU energy regulations (the so-called Athens Memoranda).6 The participating parties pledged to adopt the EU energy and gas directives (2003/54/EC and 2003/55/EC) by July 2005. The memoranda demanded the liberalization of the electricity and gas sectors, the setting up of national regulatory authorities independent of the energy industry, the unbundling of the vertically integrated national electricity and gas companies, and the establishment of transmission system operators for the national energy networks. Additionally, the participating countries were required to establish common rules for the transmission, distribution, supply and (for natural gas) storage of energy to facilitate crossborder cooperation and, essentially, energy trade. Thus, each member state could, in principle, freely decide in which policy field they wanted to converge with EU rules and regulations. However, once the Commission took the initiative and put pressure on the governments in the Western Balkans to join the Athens process, there was little room left to manoeuvre if the countries were serious in their commitment to become full members of the EU in the future. Following the Athens Memoranda, the Commission pushed for an internationally binding treaty that would finally lay the foundation for a regional energy community. According to the treaty, five institutional bodies would be created to govern the Energy Community: a Ministerial Council, a Permanent High Level Group, a Regulatory Board, different technical fora and, last but not least, a Secretariat based in Vienna. Despite

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

460

Stephan Renner & Florian Trauner

the organizational problems associated with establishing the Energy Community, once the institutions were in place and the work of the Athens process began, one important goal of the Commissions strategy had been achieved: that of creating a locus of communication concerning highly technical issues with the potential for creating an institutional dynamic and stabilizing the region. As one Commission official commented: we try to get everybody to agree on a common position and a common way forward. The aim is not necessarily to arrive at a station, but rather to get all on one train. Once we are on the train we can decide where we want to go (interview EU3, 12 April 2005, Brussels). We take a closer look at the adoption process in Serbia to demonstrate the domestic effect of this regional EU strategy. In July 2004, the Serbian Parliament adopted a new energy law (No. 84/2004). Eight days later, it came into force and provided the legal basis for the liberalization of the Serbian energy sector in accordance with EU electricity and gas directives. The law covers the sectors of electricity, oil, natural gas and district heating. Corresponding secondary legislation for electricity and natural gas was subsequently put in place. Additionally, on 23 May 2005 the Serbian Parliament voted for a new energy development strategy as the basis of its energy policy until 2015. Following the enactment of the energy law in 2004, the institutional arrangements in the countrys energy sector were changed accordingly. The Serbian Energy Agency was founded in order to serve as the energy regulator. Given that the 2003 EU energy directives (2003/54/EC and 2003/55/EC) demand operational separation between the network operator and the energy producer and supplier, the 2004 energy law also led to substantial changes in the structure of the energy industry. The government was obliged to separate the vertically integrated state-owned electricity and gas companies, while it also decided to restructure the integrated oil and gas company (Naftna Industrija Srbije, NIS) and the electricity provider Elektroprivreda Srbije (EPS). The reforms related to the Athens process thus led to the at least formal liberalization of the energy sector. While the concrete results in implementing the acquis in electricity, natural gas, renewables and security of supply are mixed and there is still a huge gap between the spirit of the EU directives and the facts on the ground in Serbia (Renner 2009, 12), Serbia adopted the regulatory principles of the European energy market. How strong was the influence of the European Union and why did the Serbian government decide to take part in the Athens process at all? In Serbias case, the reason for adopting the European Commissions initiative was twofold: First, despite the euroscepticism which is present in both the general population and the political elite and reinforced by the decision of eighteen member states to acknowledge the independence of Kosovo in 2008 both the governments of Zoran Djindjic and Vojislav Kostunica were, in principle, in favour of closer ties with the EU until the May 2008 parliamentary elections. However, even before the conclusion of a feasibility study for an SAA, the Commission demanded (together with international actors such as the World Bank) that the government decide on a new energy sector law. Jeffrey Barret, then Head of the European Commissions delegation to Serbia

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

461

and Montenegro, repeatedly and publicly stated that a new energy law was extremely important for the conclusion of a feasibility study for a SAA (World Market Analysis, 27 October 2003). For the Commission, the participation in the Athens process was one of the test cases that determined Serbias commitment to proceed on the road to Europe. Serbias principal desire for membership, combined with this pressure, was a key reason for the Serbian governments decision to take part in the Athens process and the Energy Community. As one official from the Serbian ministry of energy argued: [Taking part in the Energy Community] was a precondition for membership. It was clear that if we wanted to come closer to the EU we had to accept the Energy Community (interview S1, 22 February 2006, Belgrade). The second motivation to take part in the Energy Community and reform the energy sector was the prospect of urgently needed financial assistance for the energy sector from the EU and other international organizations well before an eventual membership. Due to international isolation, underinvestment, mismanagement and the corruption of the Milosevic era, the energy sector was left overstaffed, indebted and rundown, with an urgent demand for reforms. For example, between 1991 and 1995 only around $US300 million was invested into the electricity network. That was less than a fifth of the investment in the period between 1981 and 1985 (Palairet 2001, 910). Additionally, after the violent conflicts of the 1990s and the NATO bombings of Serbia in 1999, much of the energy infrastructure was destroyed. Since 2000, the EU has provided Serbia with over 2 billion, excluding bilateral assistance from member countries.7 With the creation of the Energy Community, the Commission channelled the financial support into this new institution and made it indispensable for non-member states taking part in this process. The European Commission thus coordinated the assistance and introduced certain conditions. Regional reconciliation was one condition; accepting the Commissions initiative in the energy sector of south-east Europe was nolens volens another. These two reasons largely explain the Serbian reform process in the energy sector. The empirical data plausibly suggest that without the Serbian demand for membership at that time, and without European pressure to take part in the Athens process, Serbia would not have adopted the liberalized EU energy regulations. After all, the liberalization of the energy sector was a financially and politically costly process. The government had to restructure the energy sector and eliminate cross-subsidies; a move that was macro-economically desirable yet politically controversial. On the one hand, as one Serbian official commented, the energy subsidies have established a perverted Robin-Hood system, where the general population financed the energy consumption of the energy-intensive industry and the privileged among the employees of the energy companies (interview S2, 25 February 2006, Belgrade). Those benefiting by this subsidy scheme were strongly against any regulatory changes. On the other hand, eliminating the subsidies particularly affected the lower income groups of the general population through higher energy prices. In order to reach cost-reflective tariffs in electricity, for example, a tariff increase

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

462

Stephan Renner & Florian Trauner

of 6070 per cent was necessary. As long as the social system was not reformed, however, any tariff increases hurt the poor and contributed to fuel poverty. Despite these domestic oppositions, however, political pressure from the European Commission and short-term financial incentives were stronger and generated the political motivation for rule adoption in the Serbian energy sector. Conclusion Since the policy of enlargement is likely to lose its momentum as the policy to govern the neighbourhood of the Union, how can the EU use its leverage in external governance? The aim of this paper was to assess the EUs strategies for encouraging the countries in the Western Balkans to harmonize their legislation with the acquis communautaire. Concerning theory, we drew from the literature on EU external governance by conditionality. We particularly addressed the recent research on enlargement which suggests that the main incentive for a non-member state to adopt EU rules is the clear prospect of membership combined with accession conditionality (Schimmelfennig and Sedelmeier 2005a, 221). In the Western Balkans, however, the prospect of EU membership is de facto dependent on the state of the European Union and its further enlargement strategy. The countries of the Western Balkans are thus left without a clear timetable for membership, but can with an asymmetrical EUthird state relationship more flexibly choose from a pool of rules and regulations in various policy fields and are left only with the negative externalities of being outside the market, territory and functions of the EU. It has been argued that the EUs leverage in the countries of the Western Balkans has remained high due to a dual strategy. First, the European Union builds on its most successful foreign policy tool, i.e. the prospect of membership. The countries of the Western Balkans were subsumed under a preaccession framework that is comparable to previous enlargement rounds with two major differences: the EU has thus far refrained from naming a concrete timetable for accession and has, indeed, left the countries of the Western Balkans with non-negotiable rules, but also a more open catalogue of policy fields. To counterbalance the absence of a clear time frame for full membership, the EU has thus offered, secondly, additional short-term incentives at a more subordinated level, such as extra financial assistance for sectoral integration or the promise of visa liberalization. The EU has expanded the pre-accession strategy with a regional component that demands the adoption of relevant EU legislation from the different countries. Taking part in these regional initiatives has become a prerequisite for closer institutional affiliation with the EU; it was a test case for the countries commitment to join the EU in the future. However, once participation was agreed to in principle, the relevant legal requirements had to be implemented within a predefined time frame in order to receive the expected rewards, thus clearing the way for sectoral integration. Two empirical case studies have supported the argument: The Ohrid Border Process in the case of Macedonia and the Energy Community in the

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

463

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

case of Serbia. We argue that in the Western Balkans, and as long as the government was in favour of membership independent of the domestic identification with the European Union, the underlying incentive of membership is still very powerful in terms of animating rule adoption, despite internal enlargement fatigue and an uncertain way ahead for non-member states. However, the difference between the prospect of full integration given in the recent accession process and the open time frame and scope of EU rules in the Western Balkans is what causes integration peu peu and a creeping process towards membership. With this strategy, the EU tries to achieve two things: incentivizing the countries of the Western Balkans to continue with the reform process of adjusting their domestic legislation to the acquis and, second, winning more time for the EU member states to continue the discussion process about the future of the European Union and possibly awake from the current fatigue de llargissement. So far, this strategy has been successful in extending the European zone of governance to the countries of the Western Balkans. In order to remain effective, however, the short-term incentives need to be supported by serious commitments concerning any prospects of full membership. Acknowledgement The authors wish to thank Oliver Treib and Christopher Reynolds who commented on earlier versions of the article. The findings, interpretations, and conclusions expressed in this article are entirely those of the authors and should not be attributed in any manner to the Austrian Energy Agency (AEA). Notes
1. 2. Under the term Western Balkans, the EU subsumes Croatia, Albania, Macedonia, Serbia, Montenegro, Bosnia and Herzegovina and Kosovo under UN-Resolution 1244. There is an enormous amount of literature on the phenomenon of Europeanization, most of which is concerned with the effect of EU institutions on the political systems of its member states and the challenges facing national political systems when adapting to the European normative and strategic environment (Mny 1996; Brzel and Risse 2000; Cowles Green, Caporaso, and Risse 2001; Knill and Lenschow 2001; Tonra 2001; Featherstone and Radaelli 2003). Others consider Europeanization as an equivalent of European integration, i.e. the emergence and development of distinct structures of governance at the European level (Cowles Green, Caporaso, and Risse 2001, 3). For Johan Olsen (2002, 937) the term also stretches beyond Europe and means the export of political principles, institutions and identities typical of Europe to the rest of the world beyond European territory. Only after the most recent enlargement process finished has interest in Europeanization beyond the borders of the EU been growing (Grabbe 2003; Papadimitriou 2003; Lavenex 2004). Several youth organizations and NGOs launched the campaign Visa, forget about it aimed at achieving a full visa liberalization towards Macedonia. See the homepage of the campaign: http:// www.aegee-skopje.org.mk/CD/index.htm. Similar to Macedonia, the other Western Balkan countries (Albania, Bosnia and Herzegovina, Montenegro, Serbia) also signed a visa facilitation and readmission agreement with the EU in September 2007. The agreements entered into force on 1 January 2008 and were considered to be the first step towards visa-free travel. On 30 January 2008 the European Commissioner Franco Frattini officially opened a dialogue with the Serbian Deputy Prime Minister Bozidar Djelic on the abolishment of visas for Serbian citizens travelling to the EU. In doing so, Serbia was the first

3.

4.

464

Stephan Renner & Florian Trauner

5. 6.

7.

country in the region with which the European Commission opened a dialogue on visa abolition (for details, see Trauner 2009). The coordination of energy was delegated to the Commission by the Istanbul Conclusions of the Stability Pact in 2001. Memorandum of Understanding on the Regional Electricity Market in South East Europe and its Integration into the European Union Internal Electricity Market (The Athens Memorandum 2002), 15 November 2002, Athens; Memorandum of Understanding on the Regional Energy Market in South East Europe and its Integration into the European Community Internal Energy Market (The Athens Memorandum 2003), 8 December 2003, Athens. Press statement by the Serbian EU Integration Office, 17 April 2008, Belgrade.

References
Agence Europe. 2008a. 9687, 21 June. Agence Europe. 2008b. 9659, 14 May. Brzel, T.A., and T. Risse. 2000. When Europe hits home: Europeanization and domestic change. European Integration Online Paper 4. Florence: European University Institute. Bretherton, C., and J. Vogler. 1999. The European Union as a global actor. London: Routledge. Chong, D. 1996. Rational choice theorys mysterious rivals. In The rational choice controversy: Economic models of politics reconsidered, ed. J. Friedman, 3757. New Haven, CT: Yale Univ. Press. Cowles, M.G., and M. Smith, eds. 2000. The state of the European Union. Risks, reform, resistance, and revival. Oxford: Oxford Univ. Press. Cowles, M.G., J. Caporaso, and T. Risse, eds. 2001. Transforming Europe: Europeanization and domestic change. Ithaca, NY: Cornell Univ. Press. ESS. 2003. A secure Europe in a better world European security strategy, 12 December, Brussels. European Commission. 2005. The EU and South East Europe sign a historic treaty to boost energy integration, Press Release, IP/05/1346, 25 October, Brussels. European Commission. 2006. Enlargement strategy and main challenges 20062007 including annexed special report on the EUs capacity to integrate new members, Brussels, 8 November 2006, COM (2006) 649. European Council. 2000. Presidency Conclusions, 19 and 20 June 2000, Santa Maria da Feira. European Council. 2005. Presidency Conclusions, 15 and 16 December 2005, Brussels. European Council. 2006. Presidency Conclusions, 14 and 15 December 2006, Brussels. Featherstone, K., and C.M. Radaelli, eds. 2003. The politics of Europeanization. Oxford: Oxford Univ. Press. Government of the Republic of Macedonia. 2004. National strategy for European integration of the Republic of Macedonia, September, Skopje. Grabbe, H. 2003. Europeanization goes east: Power and uncertainty in the EU accession process. In Featherstone and Radaelli 2003, 30331. Grabbe, H., and K. Hughes. 1998. Enlarging the EU eastwards. London: The Royal Institute of International Affairs, Chatham House Papers. Hix, S., and K.H. Goetz. 2000. Europeanised politics? European integration and national political systems. London: Frank Cass Publishers. Hofer, S. 2007. Unwelcome Europeans. EU external governance and shallow Europeanisation in Ukraine. In Dynamics and obstacles of European governance, eds. D. De Bivre and C. Neuhold, 11735. Cheltenham: Edward Elgar. Hofer, S. 2008. Die Europische Union als Regelexporteur. Die Europisierung der Energiepolitik in Bulgarien, Serbien und der Ukraine. Baden-Baden: Nomos. IBM Guidelines. 2004. Guidelines for integrated border management in the Western Balkans, Brussels. Ioannides, I. 2006. EU police mission Proxima: Testing the European approach to building peace. In Civilian crisis management: The EU way, ed. A. Nowak, 6287. Paris: Institute for Security Studies, Chaillot Paper No. 90. King, G., R.O. Keohane, and S. Verba. 1994. Designing social inquiry. Scientific inference in qualitative research. Princeton, NJ: Princeton Univ. Press. Knill, C., and A. Lenschow. 2001. Adjusting to EU environmental policy: Change and persistence of domestic administration. In Cowles, Caporaso, and Risse 2001, 11636.

Downloaded by [Duke University Libraries] at 11:33 05 January 2012

EU Membership in SE Europe: Rule Transfer to the W Balkans

465

Lavenex, S. 2004. EU external governance in wider Europe. Journal of European Public Policy 11, no. 4: 680701. Lavenex, S. 2006. Shifting up and out: The foreign policy of European immigration control. West European Politics 29, no. 2: 32950. Lavenex, S. 2008. A governance perspective on the European neighbourhood: Integration beyond conditionality?. Journal of European Public Policy 15, no. 6: 93855. Mny, Y. 1996. Introduction. In Adjusting to Europe: The impact of the European Union on national institutions and policies, eds. Y. Mny, P. Muller and J.-L. Quermonne, 124. London: Routledge. Mitsilegas, V. 2007. The external dimension of EU action in criminal matters. European Foreign Affairs Review 12: 45797. Ohrid Regional Conference on Border Security and Management. 2003. Way forward document, 22/23 May 2003, Ohrid, http://www.un.org/Docs/sc/committees/1373/ohrid2.doc. Olsen, J.P. 2002. The many faces of Europeanization. Journal of Common Market Studies 40, no. 5: 92152. Palairet, M. 2001. The economic consequences of Slobodan Milosevic. EuropeAsia Studies 53, no. 6: 90319. Papadimitriou, D. 2003. Exporting Europeanization: The twinning exercise and administrative reform in the candidate countries and beyond. Journal of South East European and Black Sea Studies 3, no. 2: 122. Pridham, G., ed. 1991. Encouraging democracy: The international context of regime transition in Southern Europe. Leicester: Leicester Univ. Press. Rees, W. 2008. Inside out: The external face of EU internal security policy. Journal of European Integration 30, no. 1: 97111. Renner, S. 2009. The energy community of Southeast Europe: A neo-functional project of regional integration. European Integration Online Papers (EIOP) 13, no. 1. Schimmelfennig, F., S. Engert, and H. Knobel. 2003. Costs, commitment and compliance: The impact of EU democratic conditionality on Latvia, Slovakia and Turkey. Journal of Common Market Studies 41, no. 3: 495518. Schimmelfennig, F., and U. Sedelmeier. 2004. Governance by conditionality: EU rule transfer to the candidate countries of Central and Eastern Europe. Journal of European Public Policy 11, no. 4: 66179. Schimmelfennig, F., and U. Sedelmeier. 2005a. Conclusion: The impact of the EU on the accession countries. In Schimmelfennig and Sedelmeier 2005b, 21029. Schimmelfennig, F., and U. Sedelmeier, eds. 2005b. The Europeanization of Central and Eastern Europe. Ithaca, NY: Cornell Univ. Press. Sedelmeier, U. 2000. Eastern enlargement: Risk, rationality, and role-compliance. In Cowles and Smith 2000, 16485. Stability Pact. 2007. Briefing on the Ohrid Process on border security and management to the COWEB Mr Pieter Verbeek, Director of the Stability Pact Working Table III, Stability Pact for Southeast Europe, 18 January, Brussels. Tonra, B. 2001. The Europeanisation of national foreign policy: Dutch, Danish and Irish foreign policy in the European Union. Aldershot: Ashgate. Trauner, F. 2009. Deconstructing the EUs routes of influence in justice and home affairs in the Western Balkans. Journal of European Integration 31, no. 1: 6582. Vachudova, M. 2005. Europe undivided: Democracy, leverage, and integration since 1989. Oxford: Oxford Univ. Press. Wallace, H. 2000. EU enlargement: A neglected subject. In Cowles and Smith 2000, 14963. Wolff, S., N. Smith, and G. Mournier, eds. 2009. Special issue: The external dimension of justice and home affairs? A different security agenda for the EU. Journal of European Integration 31, no. 1.

Downloaded by [Duke University Libraries] at 11:33 05 January 2012