Strategies for the Reconstruction of Southeast Europe
A Conference of the Greek-German Dialogue Group

On 21^th June 1999 NATO officially ended the air attacks on Yugoslavia after the Yugoslavian armed forces had begun to withdraw from Kosovo. A better time to discuss the ,,Reconstruction of South-East Europe after the End of the Yugoslavian Crisis" could not have been chosen. This was the subject of a conference to which the Greek-German Dialogue Group had issued invitations that day. The Haus des Deutschen Industrie- und Handelstages in Bonn provided the venue.

About ninety participants attended. including representatives from Albania. Bulgaria. Greece. Croatia, the former Yugoslav Republic of Macedonia. Yugoslavia. Hungary, Romania and Russia; representatives from German federal ministries, the German army, German parties, members of the Federal German Parliament, as well as representatives from the fields of science. economy, the media, charitable associations and human rights organizations. As was the case for previous events organized by the Dialogue Group. a delegation from the Greek parliament had also taken up the invitation to Bonn, led by Professor Dimitrios Pantermalis, the chairman of the parliamentary committee for expatriate Greeks, and accompanied by Nikolaos Makriyannis the Director of the PR office of the Greek parliament.

Georg Albrecht, the coordinator of the event, pointed out in his introductory speech that the Greek-German Dialogue Group had assumed when they began planning for the conference in April that by today the massive persecution and expulsion of the Kosovo~A1banians as well as the armed conflict in Yugoslavia would be at an end. Recent developments had shown that this presumption had not been mistaken. He stressed that it was necessary, from now on. with the economic aid for Yugoslavia from outside also to reinforce the responsibility and the efforts of those on the spot who took a stand for a democratization process in their country. He drew attention to the "Demokratie-Forurn für Serbien" e. V. (DFS) recently founded in Germany by young Serbs, and to the "Vereinte Initiative Neuaufbau" e V (VINA) which championed the causes of democratisation and reconstruction of their homeland. He claimed that there was a long way to go to the realization of democracy in Yugoslavia and this was shown by the fact that the two speakers expected from Belgrade. who had initially received exit permits. had been refused at short notice by the authorities.

Mr Albrecht regretted that the NATO troops who had marched into Kosovo were succeeding only with great difficulty to disarm the paramilitary UCK units. Moreover the NATO troops were not yet in a position to protect the Serbs living there from acts of revenge of militant Albanians and thus prevent an exodus of Kosovo-Serbs. For this reason, according to Mr Albrecht. the NATO states and Russia should set up mixed units in Kosovo so that all parts of the population would trust the international military presence and also the Kosovo-Serbs could stay in their accustomed homeland. He drew attention to the little known fact that, in proportion to GNP, Greece had provided the biggest share of humanitarian aid to the affected region, ahead of the Federal Republic of Germany. He also expressed the hope that the stabilizing role of the EU member Greece in South-East Europe would be duly appreciated and supported by the community of nations.

Graf von Walderdorf from Deutscher Industie- und Handelstag stressed in his word of greeting that the time for this extraordinarily important event could not have been better chosen. He underlined the interest of the German economy in the reconstruction of Yugoslavia and the region as a whole after a democratization and stabilization of the political situation.

In the first part of the conference an attempt was made to take stock of the results of the war Gudrun Dometeit from the Munich based Focus magazine took the chair. In his introductory speech Professor Spiridon Paraskewopoulos from the University of Leipzig explained the difficulties at the present time to draw up an exact estimation of the immensely high economic damage caused in South-East Europe by the Yugoslavian crisis. He referred to a report in Newsweek from 14 06 ‘99 according to which the damage amounted to $30 billion (EU estimate) or $50 billion (Belgrade estimate). Professor Paraskewopoulos categorized the costs in the following groups:
a) destruction of infrastructure
b) destruction of factories and houses
C) destruction of or damage to environmental goods
d) finished products
e) lost business (e.g. tourists)f) refugees
g) peace-keeping troops
h) costs of the air attacks
He pleaded for the establishment of a kind of Marshall Plan for South-East Europe, which could prime a similar process to that which led to German reconstruction and the economic miracle after 1945. After all, he said, Europe and the USA bore joint responsibility for the situation which had arisen because they had neglected to take political and economic action in the transformation phase at the beginning of the '90s. At that time Yugoslavia had been a federal structure with various ethnic groups and with an economic and monetary union in place. The necessary further liberalization gave way to the arbitrariness of the dictator. This was to the detriment of the entire population. Now, he said, at last, actions had to follow words. 

Mark Popovic, who read the speeches of the invited speakers from Belgrade, Dr Miodrag Vujosevic and Aleksander Kovacevic, who were unable to attend the conference on account of being refused an exit permit by the Belgrade authorities, reported on the destruction of the infrastructure of Serbia. The two Belgrade scientists called the repair of the power and water supply a priority in order to prevent a humanitarian catastrophe. 

Dr Miodrag Vujosevic presented a first anecdotal damage assessment in his statement considerable destruction of and/or damage to several hundred enterprises as well as several dozen facilities/hubs in transport and communications (water network- and road connections as well as telecommunications facilities); extensive damage to public facilities and the utility industry in more than fifty cities and m many villages; damage right up to complete destruction of over 400 schools and hospitals; bombardment of five of the nine national parks. the important tourism area around Kopaonik would not be passable for years to come as a result of splinter bombs In his conclusions the speaker placed the necessity of an ecological-economic new development m the region in centre stage. He said this had to do with the establishment of a concept of selective economic reconstruction, that on the one hand took the necessary quick economic renewal into account, on the other, however, put more emphasis on long-term ecological development. In this respect the region was dependent on international aid, he stated. Aleksandar Kovacevic focused on the idea that the development in Serbia and Montenegro was more an economic challenge than a matter of financing reconstruction. Every kind of development should be oriented internationally (export orientation and improvement of international competitiveness). He went on to say that the development of infrastructure in the fields of transport and power supply were very important as well as a commercialization of economic life running parallel, in which besides the population and the Yugoslavian pension fund, international commercial and independent lenders as well as international financial institutions played an outstanding role. 

Ursula Schönberger from Bündnis 90/Die Grünen presented an overview of the environmental aspects of the war. She began with the statement that whoever bore responsibility for his actions, also bore the responsibility for the results of his actions. She said the Yugoslavian war was an environmental war in two respects:

a) concerning the use of weapons with toxic and radiation effects, especially with regard to the use of depleted uranium weapons which had already shown dreadful effects in the Iraq war (compare reports of American soldiers who came into contact with the material). In this connection the speaker criticized the letter of the German Foreign Office according to which no information was available about the dangerous effects of depleted uranium weapons.
b) regarding the bombed targets: chemical and pharmaceutical plants. fertilizer plants and refineries. According to first reports, the threshold values had been exceeded in Pancevo (bombardment of refineries) seven thousand fold.

Concerning emergency aid, the speaker made the following suggestions:

-The population needed non-contaminated food; if necessary this had to be imported.
-The extent of the contamination of the environment had to be studied. Independent institutes had to be charged with the task of carrying out the studies.
-Possibly — depending on the level of contamination — regions had to be closed for agriculture and housing estates.

She claimed the war in Yugoslavia meant a new quality of industrial war: not only was international law infringed but also the Geneva Convention with respect to environmental effects. 

Kurt Lietzmann, Ministerial Counselor from the Federal Ministry for the Environment, pointed out that wars were always connected with environmental damage. At the moment there were great difficulties obtaining reliable information concerning Yugoslavia. He said the main danger lay in securing sources of drinking water (contamination of surface water bodies and the ground). He outlined the measures planned by the United Nations and the EU, which, first of all, aimed to localize the environmental damage. then to assess it and finally to remedy it in a targeted way by means of promotional programs. 

Dr Kica Kolbe from the University of Skopje reported on the results of the war for the neighbouring countries based on the example of the former Yugoslav Republic of Macedonia. The great influx of refugees had led to destabilization in the social field. She stated that social security payments had had to be restricted as the resources were limited. Ms Kolbe called for a quick return of the refugees. The European Union should press ahead with the rapprochement of the Balkans and the EU According to Ms Kolbe this was important for the process of democratization. 

In his speech Dr Vladimir Gligorov from the Institut für internationale Wirtschaftsvergleiche in Vienna referred to the very high unemployment rate in the whole Balkan region (Albania and Croatia: 20%, Yugoslavia: 30%, Macedonia: 32%, Bosnia Herzegovina: 40%). According to his estimates, satisfaction of the most urgent needs in the next three years would require $2 to 3 billion for Kosovo alone, for Yugoslavia including Kosovo $10 billion. The following amounts would be needed to boost the economy, to ensure macroeconomic stabilization and to provide a "Marshall Plan for South-East Europe".
Macroeconomic aid: $2 billion for 1999
Stability program: $1 to 2 billion per year
Growth financing: $10 billion per year for a period of ten years
However, he said, it was an illusion to believe that the Balkan states would be integrated in the EU quickly. He also called for a ,,Marshall Plan~ for South-East Europe, doubted however that the EU integration of this region would be possible in the short term. 

Despina Mavri, the economic adviser of the Greek Prime Minister, likewise saw far-reaching effects of the Yugoslavian crisis for the neighbouring regions Her remarks mainly consisted of two parts:
1 The positive development of the Greek-Balkan economic cooperation up to the beginning of the crisis.
2 The results of the crisis for economic relations.
She stated that, before the beginning of the crisis, it had been possible to see a rising new era of economic relations in most of the Balkan states:
a) between the countries of the region
b) between the Balkan states and Greece.
In order to assess the results of the Kosovo crisis correctly, the region is divided into three geographical main areas:
A first zone, which consists mainly of Serbia, Montenegro, Albania, and the former Yugoslav Republic of Macedonia, accounts for 6% of Greek exports.
A second zone, which includes all Balkan states (except for Turkey) and accounts for a total of 13% of Greek exports.
A third zone, which includes other European countries besides the Balkan states
She claimed that m each of these zones the effects of the Balkan crisis were dependent on various factors:
•weakness of domestic demand (this also applied to the Balkan states)
• volume of economic transactions in each of these zones
• the ability to find other transport routes for export goods
• the nature of the goods to be exported (more serious consequences for sensitive goods)
• the sub region in which the Greek firm was based.

She continued that in the case of tourism the negative influences were presented as follows:
1 fewer tourists in Yugoslavia
2 possible loss of tourists with a high income
3 fear of environmental pollution
4 decreasing attractiveness of traditional regions situated near areas of       conflict.

She said that on the whole, however, it had to be pointed out that a final assessment of the results had still not been made, since a new reality had come into being in this region. The EU and the Balkan states had to work closely together and always keep this area in the back of their minds so that stability and economic prosperity could return. 

Professor Dimitrios Pantermalis, an MP from the Socialist Party of Greece (PASOK) described the air attacks as an injustice, because innocent people had had to suffer as a result and the country would be thrown back decades in development. Stavros Panagiotou, an MP from the Communist Party of Greece (KKE), condemned the air attacks as an aggression against a sovereign state. All members of the Greek parliamentary delegation — the members of the government party and opposition alike, for example, Professor Maria Konstantopoulou from the Nea Demokratia — expressly underlined the readiness of Greece to support the Serbs and Kosovo-Albanians from now on with economic reconstruction and democratization. 

The second part of the conference dealt with concrete reconstruction plans and aid for the region Ralf Neukirch from the Bonn economic editorial staff of Handelsblatt took the chair. The representative of the EU Commission from Brussels. Dr Kyriakos Revelas, presented the various international efforts for the stabilization and reconstruction of South-East Europe (SOE). The stability pact for SOE launched by the German Presidency of the Council of Ministers took an approach to treat the causes rather than the consequences of conflicts and, at the same time, should include all countries of the region. Peace and prosperity should be achieved by a reinforcement of democracy and the rule of law, by regard for human rights and those of minorities, by market economy reforms and by increased cooperation with the neighbouring countries. These are also the conditions for the stabilization and association process. which for the five countries, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia, the former Yugoslav Republic of Macedonia and Albania should open the perspective of rapprochement with the EU. This process would offer a new form of contractual relations with the EU (the so-called stabilization and association agreement) as well as reinforced cooperation on various levels. Regardless of the reinforced mobilization of financial means on the part of the international community (to which belong, e g EU aid for the five states of the region of a total of 7.5 billion Euro in the period 1991 — 1999, the foundation of a "European Agency for Reconstruction" as well as a co-ordination mechanism between the EU Commission aid the World Bank), the success of these efforts will finally depend on the responsibility and the determination of the affected peoples and governments. 

Dr Michael Kruse, Ministerial Counselor from the Ministry of Economic Affairs in Bonn. spoke about the security possibilities or rather about the criteria for the granting of Hermes guarantees for enterprises which export to the region or want to invest there. He said these guarantees would be granted for Romania, Bulgaria, Macedonia, Croatia and Bosnia-Herzegovina, but not for Serbia. Kosovo or Montenegro. Development aid was primarily intended for Kosovo. The prerequisite for Hermes guarantees was that Yugoslavia respected the international rules and agreed in the Paris Club to the settlement of prior debt, which had come into existence before 1991. The Hermes guarantees would be granted according to economic criteria Interested construction enterprises could get advice from the Ministry for Economic Affairs or from Hermes Kreditversicherungs AG. 

Sonja Bauer from the Co-operation Office of the German Economy in Berlin. who had been in Yugoslavia week before, conveyed a vivid impression of the damage in Yugoslavia. She reported about the contamination of the whole region around Pancevo, where the oil refineries had been bombarded. the loss of the follow-up products through the bombardment of the ammonia plant and the state of the Danube (,,a still, oil-smeared, black waterways, in which dead fish lie on the surface"). Through the NATO air attacks the internal market of the South-East European region had collapsed (Yugoslavia was an important sales market and trading partner for Macedonia, Bosnia-Herzegovina, Bulgaria and Romania); trade of the South-East European states with Western Europe was affected for the long-term by the destruction of the transport routes in Yugoslavia as a transit land. Humanitarian aid was urgently necessary for Yugoslavia. This humanitarian aid had to be more than food and medicament supplies and include the restoration of the basic power and water supply for the Serbian population. In Yugoslavia several hundred thousand jobs had been lost through the war; the people could see no future. If Yugoslavia was again driven into isolation by the refusal of reconstruction ad. it would not give impetus to the forces of democracy but to the radical forces. German enterprises had signaled a great interest in participating in the reconstruction. In this respect, the speaker referred to the timidity of German investors to take risks and to investment conditions in Yugoslavia, which especially for small and medium-sized enterprises were m need of improvement. She called for the gradual lifting of sanctions in order to secure room for action for the economy. 

Nikolaus Immer. a social scientist from Diakonisches Werk of the Protestant church in the Rhineland, described the humanitarian work on the spot. He praised the German population’s enormous readiness to donate and explained the stabilizing effect the aid projects have. In this, particular value was attached to always buying ad goods in the region and to employing local personnel. Help to self-help was important in the restoration of residential houses and public buildings as well as in health care and in building facilities for power. water and sewage systems. All projects were carried out with local partners, like the orthodox churches It was possible to build up trust by involving all affected sections of the population. The Diakonie laid particular value on the promotion of reconciliation projects between Albanians and Serbs. From the present situation of pacification, peace could only come into being by overcoming hate. 

Stamatis Milingos from the Ministry of Economic Affairs in Athens raised the question as to whether Greece was quasi predestined to take over the role of honest broker in the Balkans region. He called for a speedy privatization. an activation of the banking sector and a stronger free market opening in the Balkans region. The Balkans had earned a second chance ten years after the end of Communism. He presented a bilateral development plan of the Greek government for the reconstruction of South-East Europe — complying with the OECD criteria — which provides for the improvement and renewal of infrastructure, Greek direct investment, the expansion of the already existing relations and the reestablishment, expansion and increase of foreign trade. A prerequisite for the project, planned for five years, is the important measure of mobilizing Greek private enterprises. The completed draft met with great interest. 

Rainer Bauer from INES. Dortmund, took the chair in the third part of the conference Professor Heinz-Jürgen Axt from the University of Duisburg outlined the coming into being of the stability pact for South-East Europe and traced the individual phases right up to the opening conference of 10^th June 1999 in Cologne. 

He described the organizational arrangements and analyzed the strengths and weaknesses of the stability pact approach. He stressed the important role of Greece for the peace process in the region. If it was possible to push the democratic and social development, but also the economic development and the improvement of living conditions in the Balkans, then the stability pact could also have a peaceful effect according to the postulate. Democracies do not go to war against one another. The stability pact would be measured according to whether all those involved commit themselves to this aim in the long term and raise the necessary funds. 

The results of the conference were summarized by Professor Nikolaus Wenturis from the University of Tübingen. In attempting to summarize what the speakers said, I would first of all like to begin with the economic contributions and, above all, to stress the comments of the economists who were present on the necessity for a Marshall Plan for the political and social stabilization of South-East Europe; from their point of view comprehensive aid for the whole Balkan region (including Yugoslavia) which implies favourable credits as well as direct investment and technological know-how, was considered indispensable and, at the same time, sensible, as this investment would be more favourable in the long term than the financing of a new NATO intervention in the Balkans. Moreover I would like to characterize the political speeches as noteworthy because they clearly insist on the gradual inclusion of the South-East European states in NATO and then also in the European Unisom; this stand was backed up with the argument that the stabilization of the Balkans, seen as urgently necessary in the meantime, needs not only purely economic, but also political decisions and measures which quash the state of national ,,autism" of many Balkan states. which serves as the source and cause of every form of nationalism.
As especially worthy of mention I would also call those contributions which delivered a detailed presentation of the humanitarian efforts of non-governmental organisations because they corrected the one-dimensional and up to now tendentious coverage of the print- and mass media, as they were able to give the participants at the conference a comprehensive view of the origins as ~e1l as of the number, of the field of activity and of the forms and efficiency of the co-operation of these humanitarian aid organisations with Serbian and Albanian intermediary groups.
After this short summary of the contents of the speeches. in a second step. I would like to summarize the most frequent theses which were presented during the discussion, two main lines of thought dominated the whole debate first the group of ,,conviction ethicists" who took either a pro or an anti-NATO stand and secondly the ,,responsibility ethicists" who focused their attention on the question of how far the killing of civilians by NATO bombs in order to prevent the massacre and expulsion of the Albanian population in Kosovo is ethically justifiable. In the debate the conviction ethicists judged the correctness of the NATO bombardment or the military action of the Yugoslavian state to combat the UCK terror (that they also regarded as comparable to that of the Turkish state in combating the PKK) primarily based on convictions and not with a view to the expected results and underlined therefore with admirable acrobatic rhetoric the moral obligation and the moral imperative, which legitimized the use of the applied means for the assertion of ,,their" aims. The ,,responsibility ethicists," on the other hand, evaluated the correctness of the action of the Yugoslavian leadership as well as NATO exclusively according to the foreseeable results and not according to the motives or rather the aim pursued; therefore they criticized not only the lack of an autonomy constitution and the expulsion of the Kosovo-Albanians, but also the refusal of the West to employ ground troops, who could have prevented the pogrom in Kosovo. as the responsibility ethicists saw in it the means, that had not only the greatest possible effectiveness to achieve the aim, but at the same time would cause fewer casualties among the civilian population of Yugoslavia (but losses among the NATO armed forces). 

Georg Albrecht, the coordinator of the conference. finally thanked those present for their active participation He expressed his confidence that the analyses, proposals, plans and suggestions which were presented at the conference would be of use for everybody who showed interest and wanted to take part in the reconstruction and stabilization of South-East Europe. 

The Greek-German Dialogue Group was founded in 1993 in Düsseldorf as a union of politically interested Greek, German and other European academics, independent of parties and governments. It organizes events with the aim of promoting the dialogue between German, Greek and other European partners on topical political and social questions. 

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