I’m on the other side of the world at the moment, with limited web/computer access (writing this on a combination of a mobile phone and a computer with a Japanese keyboard and operating system, so likely to be more typo-ridden and less coherent than I’d like), hence even less from me than usual. But this deserves to be noted:

“Europe is at a crossroads,” Merkel declared to the German parliament in Berlin today. “This is about no more and no less than the future of Europe and about Germany’s future in Europe.”

…In return for leading the rescue attempt, Germany is demanding new rules and penalties for the 16 countries taking part in the single currency.

The 16 could not keep muddling along turning a blind eye to the fudges and fiddling of fiscal miscreants, she argued. Instead, persistent breakers of the euro rules could be “suspended” from the single currency, fiscal sinners would have to forfeit their voting rights in EU councils, and would lose EU subsidies.

If there was no alternative, a country using the euro should be allowed to go insolvent, meaning hundreds of billions in losses for international banks and other creditors. This was seen as a warning to the markets betting on a country’s sovereign debt default, while confident that investors would recoup their money from European and German bailouts.

As a last resort, Wolfgang Schaeuble, the German finance minister, is proposing that a persistent rule-breaker be expelled from the eurozone, though not from the EU. Olli Rehn, the European commissioner for monetary affairs, is to unveil proposals next week for new rules that would give Brussels the power to scrutinise national budgets, withhold EU funds, and impose penalties in the eurozone.

The Germans support and oppose some of Rehn’s measures, but are against vesting the powers in the European Commission. Merkel’s proposals are radical and would require renegotiating the Lisbon Treaty defining how the EU works.

Many have argued that European monetary union was never going to work without far tighter centralised controls. They may now be about to be proved right.

For advocates of the euro (and I remain unconvinced one way or the other, seeing it as nice in theory but problematic in practice, as well as relatively convinced that it was a) introduced too soon, and b) too lax on entry criteria), this is a depressing time, with little space for optimism.

For advocates of the EU, it is almost as tricky to see anything positive here. Yes, this crisis may finally underscore something I’ve been saying for years – not all EU member states are equal, so it’s about time we stopped pretending that they are and start considering how to make a multi-tier EU function effectively. But after the decade-long squabbles that led to the final ratification of the Lisbon Treaty six months ago, I can’t see anyone in Europe being keen to start a fresh round of EU reform talks.

At the same time, we are likely to start to see some big shifts in the attitudes of two of the EU’s most important member states, Britain and Germany.

Britain, because of today’s general election, which may see the eurosceptic Conservative party gain power (and, more to the point, the strongly anti-EU William Hague become UK Foreign Secretary), with a number of explicit promises to scale back Britain’s already unenthusiastic involvement in EU affairs.

Germany, because of the understandable resentment from German taxpayers at having to bail out the rest of the EU combining with frustration at being the single biggest contributor to the EU project while at the same time having the smallest amount of influence (in proportion to both economic might and population).

Plus – an important point, this, as so much of Germany’s foreign policy over the last 60 years has been due to residual feelings of guilt and shame over World War 2 – we are entering the decade in which the last WWII veterans are going to start dying off. There is only so long that Europe’s largest economy was going to allow itself to be bossed around based on a geopolitical version of the sins of the father.

The decision of some parts of the Greek press to explicitly bring up the Nazi occupation of that country as a reason why Germany effectively owed them a bailout has only further underlined a feeling that has understandably been rising in Germany for some time now – “the Second World War had nothing to do with me – I wasn’t even born then, so why the hell should I be punished for what my grandparents’ generation did?”

To (only slightly) oversimplify, for the first 50 years of its existence, the EU has been shaped primarily by France and French intersts (note that it was a former French president, not a former German chancellor, who drew up the EU Constitutionh note that the Treaty of Rome contains many France-only clausesh note that France still receives a disproportionate amount of Common Agricultural Policy funds). Germany has tended to stand dutifully in the background, mostly nodding in (sometimes reluctant) agreement, due to a combination of war guilt and genuine enthusiasm for the ideas of European integration.

Germany has invested more in the EU – both financially and philosophically – than any other member state, yet has hed comparatively little say in how the project has evolved.

With the Greek crisis, this could all be about to change. Germany has long had a moral right to have a greater say in EU affairs – this may be the moment when she starts to assert that right.

I, for one, am hopeful that this could prove very positive indeed. Not in the short-term, perhaps – but in the medium-term this may, with any luck, see the EU reconstituted on more sensible grounds, where weak economies are no longer able to drag down the strong, and where rather than progressing at the pace of the weakest or most reluctant member state, those that are stronger or more enthusiastic for further integration can finally be allowed to truly flourish.

Update: The Centre for European Reform seems to be thinking on similar lines about the Germany-EU relationship… Key quote:

It is hard to see how the EU could make progress on anything – whether it is services market liberalisation or a common energy policy – with a reluctant, grumpy and inward-looking Germany at its heart.

It is time for some damage limitation.

Ah… The 2007 accession states of Bulgaria and Romania… What to make of them? At the time I was both optimistic and pessimistic all at once. A year and a half on…?

After Bulgaria being told off last month (for, y’know, little things like being economically backward, corrupt, and ignoring human rights and the rule of law) now EU agricultural funds have been suspended to Romania due to dodgy management.

Oh dear… Doesn’t look like letting them in was such a good idea now, does it?

The thing is, though, unlike Bulgaria’s blatant unsuitability for EU membership, I reckon this simply shows how much Romania’s getting into the spirit of things. The Commission has suspended payments of just 28.3 million euros to Romania – that’s three times less than France was fined back in 2006 for dodgy use of CAP funds. Mismanagement of EU agricultural payments is a long and noble tradition – by following the examples of France, Britain, Spain, Italy, Portugal, Greece and Ireland, Romania is merely underlining its commitment to European values.

Makes you proud, doesn’t it?

It’s a question I’ve asked before, not least when the backwards Balkan oddity first joined. And now, finally, the EU powers that be seem to have noticed that, erm… letting in a notoriously corrupt, organised crime-ridden country with a dodgy economy and poor track record on human rights may just have been a bad idea.

And so EU funding to Bulgaria has been cut off, with hefty warnings for that other bastion of economic might and social liberalism, Romania.

A handy summary of the European Commission’s report on Bulgaria has a number of highlights – all of which would tend to suggest that, erm, Bulgaria wasn’t quite ready for EU accession last year, and so shouldn’t have been allowed to join:

The Penal Code is outdated and is part of the reason why the judiciary is overloaded… The administrative capacity of both law enforcement and the judiciary is weak… There are signs of corruption in the health and education sectors… A strategic approach to fighting local corruption is missing. The anti-corruption Commission of the Council of Ministers has not been active in this regard… The fight against high level corruption and organised crime is not producing enough results…

And so on, and so on…

Of course, corruption alone is nothing too unusual within the EU. But Bulgaria also falls down in countless other areas, as the US State Department’s 2007 report on Human Rights in the country notes:

The constitution and law prohibit such practices; however, police frequently beat criminal suspects, particularly members of minority groups… Nongovernmental organizations (NGOs) reported complaints of police brutality from Romani victims who were too intimidated to lodge official complaints with authorities… Human rights groups continued to claim that medical examinations in cases of police abuse were not properly documented, that allegations of police abuse were seldom investigated thoroughly, and that offending officers were very rarely punished… Prison conditions generally did not meet international standards, and the government did not allocate funds to make significant improvements… The constitution and law prohibit arbitrary arrest and detention; however, there were reports that police at times ignored these prohibitions… Impunity remained a problem. All complaints involving interior ministry personnel and other police forces, as well as military personnel, are adjudicated by the military court system.

And on, and on… They could also have mentioned the arbitrary arrest of political dissidents.

And it’s not as if its economy is booming either, ranking worse than Turkey’s, and – according to Wikipedia, at least – with inflation fluctuating between a low of 2.3% and high of 7.3% over the last five years, while “Bulgaria’s per-capita PPP GDP is still only about a third of the EU25 average, while the country’s nominal GDP per capita is about 13% of the EU25 average.”

Oh, and lest we forget, Bulgaria also signed a gas pipeline deal with Russia earlier this year which has caused some serious problems for the EU’s own planned Nabucco pipeline – designed to lessen Europe’s reliance on Russian gas – and thus handed the Kremlin even greater dominance over the European energy market.

So, as I say, the country is corrupt, has a poor human rights record and a dodgy economy, and seems to be making little progress with any of these, while at the same time is undermining EU efforts to stabilise the continent’s vital energy supplies – so what the hell is it doing in the EU? “Serious concerns” were being raised by the European Commission as late as May 2006 – just seven months before the country was allowed to join, so I’m genuinely fascinated to know who thought it would be a good idea…

More to the point, have any positives been gained from Bulgarian entry? – bar the amusement factor of rabidly right-wing Bulgarian MEPs making arses of themselves, that is.

The EU is meant to have standards. Membership is supposed to be a reward for having met those standards. Bulgaria patently has come up short – and yet it’s been rewarded anyway. Is it any wonder that Turkey’s getting so pissed off?

War criminal arrested: cue all sorts of guff from people who should know better about how this proves the Serbian government’s “pro-Western credentials” and demonstrates “Serbia’s European aspirations”. It does nothing of the sort.

All this really means is that a thoroughly unpleasant mass-murderer has finally been arrested and can at last be brought to trial. Wider significance cannot, as yet, be drawn from this long-overdue apprehension of one of the nastiest pieces of work Europe’s seen for a while. Not while Serbia’s still being cozy with Russia and helping the Kremlin further dominate European gas supplies to gain backing in the ongoing Serbian campaign against Kosovo’s independence.

Because the thing to remember is that yes, this current Serbian government may well have made some of the right noises to flatter the EU’s ego – but it’s still a Serbian government, and Serbian governments have long been unable to decide in which direction they want to head. Little wonder as, slap-bang in the centre of the Balkans, Serbia has cultural and historical links to Europe, Russia, the Catholic Church, the Orthodox Church, and the Islamic world to the south – it’s been right at the heart of some of Europe’s most confusing and vicious territorial disputes for centuries. Little wonder as well, then, that Serbia’s identity crisis mean that it has rarely been known for either consistency or sanity ever since gaining independence from the Ottoman Empire back at the start of the 19th century. It was no accident that the First World War kicked off thanks to the actions of a bunch of Serbian assassins – with the first declaration of war being between the Austro-Hungarian Empire and Serbia. (Which then escalated, lest we forget, thanks to Serbia’s old friendship with, erm… Russia…)

So, what does Karadzic’s arrest mean? Probably not a lot in the long-term, because hardly anything ever means much in the long-term when it comes to Serbia. It is, however a potentially handy short-term bit of PR for the current Serbian government:

With Serbs refusing the accept Kosovo’s loss and angry with the EU for sanctioning it, the liberals needed other areas where they can show they are ready to co-operate with Brussels… It was particularly beneficial for [Serbian President] Mr Tadic that Mr Karadic was captured with the help of Serbian security officers because the arrest provides clear evidence of Belgrade’s willingness to co-operate with the war crimes tribunal.

But PR is all that this is – and PR largely aimed at the outside world. Within Serbia, nationalist feeling remains high despite the current government’s supposedly “liberal” credentials, and the arrest of a nationalist figurehead could just as easily cause trouble for a more moderate government still trying to prove to the Serbian people that it’s just as pissed off about the Kosovo situation as anyone. Having already overseen the independence of Montenegro, losing Kosovo as well puts Tadic’s government in a very tricky situation indeed – and he’s too canny an operator not to ensure that he has all bases covered. Why else would he be sucking up to both Russia and the EU at the same time?

“Oh noes!” Say the eurosceptics. “Teh Lisbon tweety dat am weely teh constitootion am gonna make teh EU a state and stuff! Got foreign minister! Oh noes! Dat mean common foreign policy! Our sovereignty gone bye-byes! Waaah!”

I really can’t ever hope to summarise the likelihood of this particular bogeyman coming into being any time soon better than Nanne at DJ Nozem, so instead I’ll just reproduce it in full. :

EU Foreign Ministers fail to agree on the most basic issues about the status of a small breakaway Yugoslav province (population: 2 million est.) that declared its independence over the weekend.

An issue that had been on the horizon for about, oh, nine years.

How’s that common foreign policy coming along?

He he he!

I do like how many intriguing questions the Kosovo situation is helping to raise. And how many answers it’s providing to boot…

After the little-reported grenade attack on a UN court on Sunday afternoon, it seems that Kosovo’s Serbs aren’t going to accept independence without a fight.

Reuters: U.N. police pulled out from a Kosovo border post that was destroyed on Tuesday by Serbs who vowed never to submit to the authority of Kosovo’s Albanian government and its Western backers.

It was one of two border posts, between Kosovo and Serbia, attacked and set on fire by Kosovo Serbs earlier in the day in the Serb-dominated northwest corner of Kosovo.

Sofia Echo: Serbs also attacked a check point near Zubin Potok. The police officers hid in a tunnel while about 1000 protesters tried to tear it down…

hundreds of Serbs set fire to the temporary passport control premises in Banja.

Of course, with any luck this is just a small-scale bit of initial frustration from local ethnic Serbs and it won’t escalate any further. Fingers crossed, eh?

But considering UN troops so far don’t seem to have clear instructions about what to do (abandoning the border posts of a territory they’re meant to be protecting? What’s all that about?), how long is it going to be before Serbia – or perhaps Russia? – steps in with its own “peacekeeping” troops to “protect” Kosovo’s Serbian minority from the ethnic Albanian majority?

Spotted in a decent French article on Kosovo’s independence, a throwaway line that made me ponder:

L’indépendance du Kosovo se fera sous supervision internationale. Malgré ces divisions, l’Union européenne a décidé, sans l’aval de l’ONU, de déployer au Kosovo une mission de quelque 2 000 policiers et juristes pour « accompagner » les débuts de l’indépendance du Kosovo.

Or, in other words:

The independence of Kosovo will be under international supervision. Despite this, the European Union has decided, without UN approval, to deploy in Kosovo, a mission of some 2000 policemen and lawyers to “accompany” the beginnings of the independence of Kosovo. [emphasis mine]

Of course, a significant reason why the anti-war protests back in 2003 felt so justified to so many was the lack of a UN resolution supporting military action against Saddam Hussein in Iraq. There are no such protests about unilateral military action in Kosovo – nor have there really ever been during the last decade of NATO deployments there.

Is this because Kosovo is too low-profile for anyone to really care – or is there a more significant, wider-ranging reason?

Kosovo has declared independence. Many western countries – including the UK and US – are likely to declare their official recognition. Russia has explicitly stated the declaration to be illegal – and China has also made disapproving noises.

With two members of the UN Security Council opposed to Kosovo’s independence, it cannot be recognised by the UN – and so will not legally be a state, despite thinking it is. Likewise, the situation in Darfur is officially not a genocide (despite all the evidence) thanks to the UN having failed to declare it as such – partially thanks to pressure from China, keen to preserve her arms trade.

In situations such as these, is it acceptable to bypass the UN? If so, why here and not five years ago in Iraq? And, if bypassing the UN is sometimes acceptable, what useful purpose does this supposed final arbiter of international law actually serve any more? And does the lack of protests over military action in Kosovo indicate an acknowledgement of this?

As you may have noticed, I’ve been pondering the EU’s proposed mission to Kosovo quite a lot over the last day or two, and getting increasingly concerned that the province’s impending independence hasn’t been quite thought through. Overnight, a rather succinct comment was left that neatly summarises much of what I’ve been coming to think – as well as noting a few things I’d missed (criticising, I’ll add for my ego’s sake, an article I’d linked to, rather than anything I’ve written so far – though it also applies to my stuff to an extent):

No mention is made of the 55% of Kosovo albanians who did not vote in the recent elections, surely a sign of no-confidence in the politicians that claim to present them?

No comment on Kosovo’s economic situation or other critical problems either, nor how long the patience of the average Kosovo albanian will last if things don’t improve fast after ‘independence’

No comment on how much it will cost the EU. The EU itself quotes EUR 250m over approximately 3 years. If tens of billions of IMF dollars spend on the region by Tito hasn’t helped, then what makes the ‘EU’ thinks its paltry sums will succeed? Most of all, what about the cost of this indeterminate subsidy to the EU tax payer?

The EU’s policy can be summed up as ‘Independence and Pray’.

Neither does the ‘analysis’ really address the matter that Serbia’s stability as critical to the EU’s ’stabilization’ of the Balkans. Sure, Serbia under Nikolic may be made a ‘Pariah’ by the EU, but that will also damage neighboring states such as Bulgaria and Romania, much as the economic damage that sanctions caused in the 1990s, something that very few commentators care to address nor comment upon.

More on this, no doubt, over the next couple of weeks. I’m working on a theory about what’s going to happen when the EU gets more closely involved in the Balkans, but it’s going to take a bit more work…

The EU’s lack of action over the Yugoslav Civil War is surely the Union’s biggest embarrassment. “The EU has brought 50 years of peace to the continent”, they claim, always looking a bit shifty lest anyone remind them that they allowed a genocide to kick off on their doorstep, and then had to rely on America to help sort out the ongoing mess. Ever since, the drive for an EU rapid-reaction force has been stepping up. Now, with Kosovo on the brink of declaring independence from Serbia, the EU is on the brink of committing to a common military policy – a significant step, and one that could well have major implications.

Serbia’s recent elections may well have seen the less nutty option chosen, but it’s still not looking too promising. Because those elections were for the president, not the more powerful parliament – and so current Prime Minister Vojislav Kostunica remains the real power in Serbia. (If the name sounds familiar, that’s because he’s the guy who succeeded Milosevic as Yugoslav president after 2000′s peaceful revolution.)

Kostunica is sorely opposed to the independence of Kosovo – so much so that last week he blocked a cabinet meeting that was to set Serbia well and truly on the road towards European Union membership, a step Kostunica sees as all but guaranteeing that Kosovo goes its own way. EU aspirations may well exist, but not at the expense of what Kostunica and co see as Serbian territorial integrity. Nationalism trumps internationalism, it would seem.

Kostunica has the support of the ultra-nationalist Radical Party (the one whose leader is currently on trial for crimes against humanity in The Hague) and Milosevic’s old Socialist Party, so doesn’t really need the more moderate Democrats on board, even though he’s still their leader. Yesterday, however, he kissed and made up with his party, before making his intentions over Kosovo crystal clear:

“We have made a decision that the Serbian government will on Thursday, in advance, annul all acts that are against the law which concern a unilateral proclamation of the independence of this fictitious state on Serbian territory…

“We shall not allow such a creation to exist for a minute. It has to be legally annulled the moment it is illegally proclaimed by a leadership of convicted terrorists.”

So, what does this mean for Serbia’s EU hopes, now that every Serbian party is so explicitly opposed?

Well, the general consensus is that in uniting against Kosovo’s independence, Serbia has now decisively chosen to stay out of the EU – Serbia’s territorial integrity trumping its long-term economic development. Hence Monday’s “No alternative to Europe” pro-EU protests in Belgrade, led by precisely the same sort of people who started the anti-Milosevic movement back in the 90s, but – with no Serbian party prepared to accept the loss of Kosovo in exchange for EU integration – with rather less chance of success.

Kosovo’s independence is coming, of that there can be no doubt. But with Serbia refusing to acknowledge such a move and Kosovo itself potentially unable to survive on its own, the Balkans could well turn into another major flashpoint – and another massive challenge for the EU. What to do? Back Kosovo, and risk a return to civil war, or back Serbia, and risk a return to guerilla attacks?

So far, it’s all been Kosovo. Pretty much every EU member state has declared an intention to recognise the wannabe country’s independence when it comes, and has been working towards building up Kosovo’s economy and legal system in preparation. Now, it seems, the EU is even preparing to offer military support.

As well as being a significant symbolic moment for EU integration (an EU army long having been central to political integration among federalists – ever since it was first proposed by Winston Churchill – and a key fear of anti-EU types), this potentially could see another ongoing spat escalate yet further. Because Serbia has the support of Russia, which is on the record promising to block any United Nations recognition of Kosovo’s independence.

With Russia throwing her weight around to get Ukraine to do what she wants, and increasingly setting herself up in opposition to the EU, could the protesting Belgrade students have got it wrong?

For ex-communist countries with struggling economies trying to get over the problems of the Cold War years, Brussels has long seemed the obvious point of aspiration. The carrot of European Union membership has helped many in the drive towards democracy – and continues to help in many states, like Bosnia, Croatia, Moldova and Ukraine. The EU was seen as the best – perhaps only – hope for a speedy route to prosperity.

Now, however, Russia’s control of so much of Europe’s energy supplies, healthy arms industry and willingness to trade with even the dodgiest of dodgy regimes has given an alternative. Europe’s last dictatorship, Belarus, has happily survived for nearly two decades thanks to Russian support. If Belarus can do it, why not Serbia?

It may not seem like much of a choice to sensible Westerners – the EU route seems sure to offer a far better standard of living, as well as all the benefits of human rights and democracy. But Serbia is, lest we forget, a country filled with people who were happily murdering each other in their thousands only a decade ago…

Anything could happen – and whatever does, the EU is going to be right at the heart, trying to mediate and, at the same time, prove that it is truly a world power. Failure is not an option, for that would be the final nail in the coffin of an EU working as one, the final proof – after failure to act in the 90s and failure to agree a common stance on Iraq and Afghanistan – that when action is needed, the EU can only dither.

Rather than wait until after the elections, Serbia’s already signed that gas pipeline deal with Russia, effectively scuppering the EU-backed alternative.

Now we’re going to end up with a president of Russia, Medvedev, who’ll not only be the former head of Gazprom (the company that controls 97% of Russia’s vast gas reserves, and has shown no compunction about using threats of supply cut-offs to gain political advantage – or to act on them) but also have complete dominance of the supply chain through to continental Europe.

Time for Europe to say bye bye to independence.