30 July 2018

The “16+1” format vs. “The Berlin Process” initiative- summit results analyses from Sofia (06-07.07/2018) and London (09-10.07.2018)

Stelian Teodorescu | Indira Crasnea

2018 seems to be an intense year for the West Balkans through some important events, which increases E.U.’s presence in the region, as well as China’s, by using its own involvement and commitments formats. After the European Committee published the strategy having the theme: “A credible enlargement perspective for and enhanced EU engagement with the Western Balkans” and after the EU-West Balkans summit (Sofia, May 2018) and the E.U. summit (Brussels, June 2018), there were two important events that could involve a harsh competition between E.U. and China, with hard to measure effects for the entire region’s future.

Image source: Mediafax

The first of the two events was the 7th summit of Government Chiefs from the Central and East Europe and China, that was held in Sofia, during 06-07.07.2018, under the auspices of the “16+1” format.[1]

The representation of the Head of State and Governments in the West Balkans and the organization of the next summit in this format, in 2019 in Croatia, reveals the importance they gave the cooperation with China, as well as the geopolitical importance for the main international actors in the region. In this format, the accent is on intensifying the economic cooperation, and, in this context, on “increasing the communication level agenda”. Hence, it is important to underline one of the statements that Boiko Borissov, Bulgaria’s prime-minister made, who said: “the supplementary financial resources coming from China could contribute to finalizing common connectivity projects that currently are not on E.U.’s agenda”.

Considering the analyses made regarding China’s interests in West Balkans’s region, and implicitly, in Europe, but also the concerns generated by this subject on EU level, we must underline that the “16+”1 format is an initiative of the Chinese authorities, to intensify and extend the cooperation with the 11 states that recently adhered to EU, and the 5 states in the West Balkans regions, which will like to access. Therefore, it can be said that the Chinese leaders want to increase their influence over European states with significant needs and vulnerabilities at an economic and financial level, but especially in those states that at the moment do not follow EU’s legislation. All of this aside, the  Chinese leaders are sure that the relations with the EU will be organized according to European norms and regulations, but they underlined that “the cooperation process should be transparent, demanding balanced terms, in opened auctions procedures, so that China could participate at the projects implemented in the region”. Hence, the Chinese authorities stated their financial availability to sustain, build and operate a center that could offer information to companies regarding the EU norms in the cooperation with China, as well as the possibilities to gain assistance from the international financial institutions, the first invitation for building the mentioned structure being addressed to Bulgaria. In such a context, the Chinese authorities reveled their availability to encourage new lines to collective finance of the “16+1” initiative projects, but, at the same time, they underlined that it is essential to open the Chinese marked for investors and they also evidenced that it is necessary that the “16+1” initiative to be an opened platform to accession for other EU members states too and financial institutions as the European Bank for Reconstruction and Development.

The summits held, in the last years, under the “16+1” initiative auspices, generated a lot of questions regarding the commitments and cooperation in East and Central Europe (ECE) and China, the major interest of Beijing to involve in the region being probably, a part of its long-term strategy in the competition with EU.

This being said, the ECE states increased interest to develop relations with China is also the result of the promoting will of a diversified palette of international commercial relations in the region, this new tendency coming to continue the approach based on developing the populism that appeared in some east-European states level.  As a consequence, we can contest the apparition and the intensification of an “own voice”” for some ECE states, which promote cooperation with the Chinese states as an alternative to promoting the projects that the EU has.

It is important to underline that, in Sofia’s summit context, there were signed a series of cooperation documents, including a common pledge to promote cooperation in the electronic commerce domain and a cooperation program for 2018-2020. The Chinese leaders want to permanently underline that this cooperation consolidation between China and ECE is based on the principle win-win, but also on opening and consultation in a medium characterized by equality and gaining mutual benefits.

One of the major project that could significantly contribute to approaching the “connectivity” projects in the West Balkans region is the big speed railway section between Belgrade and Budapest (with a 350 km length, costing 2, 6 billion euros, the project being offered to China Railway International Corporation), which is an extremely important project, responding to the interest in developing transport routes between China and Europe. This finalized project through a memorandum that was signed for the first time between China, Hungary and Serbia in 2013 has also the aim to connect the Pireu port (Greece) with the economic heart of Europe.

To help the future analyses that will be made on this theme it is necessary to process the concrete results which evidence China’s influence level in the West Balkans:

-Serbia has an intense bilateral cooperation with China, cooperation that has a strong base and includes major projects as the reconstruction of the Begrade-Stara Pazova segment and the Belgrade-Budapest railroad or the steel manufacture in Smederevo. At the China-ECE summit in Sofia, Serbia’s prime minster, Ana Brnabic, invited the Chinese companies to participate at the project in mining, energy, infrastructure and tourism domain, the Chinese tourists being able to take benefit of Serbia’s policy (which raised the visas for these in 2016).

-Regarding Bosnia and Herzegovina, China wants to constantly advance in developing the project in thermic energy area, the Chinese companies being supported to participate at the project in infrastructure’s construction and modernization domain. Beijing offers an extremely important attention to extending the BiH’s agricultural product imports and support the promotion of tourism, cultural changes and cooperation consolidation forest resources development and its processing. In this context, the president of BiH’s Ministers Council, Denis Zvizdic, underlines that the two countries benefit a great cooperation potential in energy, transport and agriculture industry domains, and that the hope BiH will valorize its cultural diversity and will consolidate the cultural and touristic changes with China.

-as for Montenegro, the North-South highway is seen as a cooperation pilot project with China. Beijing supports the Chinese companies to invest in Montenegro and encourages the Chinese tourists to visit the Montenegrin state. In its turn, the Prime Minister Dusko Markovic underlined that developing the relations between Montenegro and China has mutual political trust.

-on North Macedonia’s part, China actively supports the transport route constructions to promote connectivity development, but also the commerce at a regional level. China wants to keep the commercial exchanges with North Macedonia at all levels and to pursue the cooperation at various levels, the transport infrastructure being one of the important domains to make a pragmatic cooperation between the two states. As well as BiH, China opens the marked for Macedonian products and wants to continue to consolidate the contacts at high level, especially in areas as infrastructure, energy and culture.

In such a context of China’s and West Balkans entities cooperation development, we can say that the format’s “16+1” design is subordinated to the purpose of transforming this region in a commercial hub. Howbeit, we cannot forget that some Chinese investments in the states from these regions and implicitly in West Balkans, could generate risks for the financial stability of the states in this region, the easy access at the Chinese’s  financial resources being extremely risky for the small states, because an uncontrolled increasing of debts could danger their economy’s fiscal stability.[2]

 

The second event we referred to was the 5th summit, held under the “Berlin Process” aegis initiative, in London, between 09-10.07.2018. This initiative had the aim to develop the collaboration in order to support the security, stability and the prosperity of the region.

Among the states invited by the United Kingdom to participate at the summit were Austria, Croatia, France, Germany, Italy and Slovenia, meanwhile Bulgaria was invited to the EU- West Balkans summit, in Sofia, 2018. In the same context, Poland was invited to host the next West Balkans summit, in 2019.

From the beginning, the summit’s works were planned so that the entities’ leaders to concentrate on three big objectives:

-increasing the economic stability of the West Balkans region in order to improve the business domain, stimulate the entrepreneurship, approaching the dole issues among young people and promoting the regional interconnectivity;  

-consolidating the cooperation in the regional security area to contribute in combating of the common threats, including corruption, organized crime, human traffic, drugs and fire guns, terrorism and violent extremism;

-the facilitation of political cooperation could help the region to solve bilateral disputes and to pass over the issues about the conflicts in 1990 and to consolidate the democracy;

At the end of the summit, EU showed its availability in continuing to consolidate the cooperation with the region, with clear commitments and concrete measures, focusing on the three key domains of the cooperation: economy, security and reconciliation. Hence, the High Representative of the European Committee for foreign business, Federica Mogherini, underlined that during these years there was an intense collaboration to attract the region closer to EU, politically, economically and regarding the security, being visible the remarkable results gained and the adopted solutions at the hardest bilateral issues.   

At the London summit the accent was on encouraging the investments and the commerce in the West Balkans region. In socio-economic domain development, the accent is on continuing to apply the action plan to create the so called Regional Economic Space, as it was agreed at the Trieste summit, in 2017, a year after applying the plan, the region having an increased intraregional commerce.

The sustain the established objective, the European Committee, in cooperation with the financial partners institutions, present a new guarantee instrument, which will be launched at the beginning of 2019, on the investments plan for the West Balkans. With an EU initial commitments of almost 150 million euros, during 2019-2020, the guarantee will have the purpose to mobilize up to 1 billion euros for investments in lasting socio-economic developments and regional integration. Thus, the guarantee will allow dividing the financial risk without unblocking the private investments in a large section assortment, financing the project in the climate exchanges and infrastructure investments, as well as in digital and social sections, approaching in this was key obstacles, which block the access to financing in the region.

Unlike the “16+1” format, the entities leaders who participated at the London summit want to identify the methods to make a better cooperation between the West Balkans and the EU and in the approach processes of common security challenges, including fighting against terrorism, radicalization, cyber-attacks, organized crimes and guns traffic. They discussed the connection between corruption and security, the representatives from the West Balkans retaking their commitments to combat corruption. In this context, the summit represented an opportunity for the leaders of the participant states to discuss also about the opportunities in intensifying the cooperation between the legislative agencies in EU and the ones in West Balkans, including here also the exchange of information.

Regional cooperation the good neighbor relations remain essential elements of the process to accession to EU of the West Balkans states, which involves a lasting and sincere reconciliation. EU supports involving the young people from the West Balkans countries in various projects (as the “Marie Skłodowska-Curie Actions”, “Creative Europe” and “Erasmus +”” or “Young’s in action” programs), the cooperation in this area being seen an essential to increase the regional connectivity.  In this context, it is important to remark Great Britain’s position, which, despite the fact that is in a current process of getting out of EU, declared is availability to make efforts on developing a strong, stable and prosperous West Balkans region. According to estimations, Great Britain intends to increase the financial support for the West Balkans to 80 million pounds, for the 2020-2021 period (41 million pounds were allocate for the 2018-2019 period), as well as the number of the security work force they had in the region, to support the effort in combating the organized crime.

Concluding, we can see that the common elements of the two summits were developing the infrastructure’s connectivity in the region, as well as between the region and EU, and also economic development of the commerce. The elements that were different between the two summits, favoring the London one, were developing the security and the stability in the region, fighting against organized crime and corruption and reconciliation.

A future alternative solution that the West Balkans could go for could be the influenced by the perception among the leaders, and also the civil society of the projects made in the region, the financial support and the opportunities exploited to increase the citizens’ prosperity from the 5 entities from the West Balkans, but also to increase EU’s and China’s influence in the regions and other international actors as Russia and Turkey.

The credibility level of the previous evaluation will directly depend on the evolution of the actual geopolitical context, where the world seems to come back to multi polarity, increasing the incertitude and managing this among with finding the multipolar equilibrium being the decisive factor.  All of these could generate a regional situation more and more complex, which will be characterized as instability. Remaking the power poles could have a determined influence over the process of choosing political, economic military and security solutions by the leaders of the West Balkans entities.

In such a context, we can say that, on short term, the West Balkans does not represent a major risk for EU’s political project in the West Balkans, even though there is a more consolidated perception that they want to keep the region in Europe, but outside the EU structures. The conditions demanded by EU regarding the accession along with the economic and financial developed connections seem to be used more as immediate problem solving methods that the region is facing, than to stimulate the development and consolidation of long term EU and West Balkans relations.

All of this aside, we cannot exclude an evolution that can lead to vanishing all the results they have until now, as well as the objectives proposed for the future, especially when China wants to consolidate its position as international actor, which affords to plan long term projects, when Russia can control the region’s dependency on its energy resources, and when Turkey has an significant potential to very well exploit the multi-ethnic and multi-religious character of West Balkans. As a result, such an evolution of the situation demands EU to be capable to develop some predictable and realistic projects, in different cooperation formats in order to maintain the motivation of the 6 entities in the region to adhere to EU structures.

                                                                                                                                        


[1] At this summit, beside the 11 EU member states (Bulgaria, Croatia, Estonia, Lithonia, Lithuania, Poland, Romania, Czech Republic, Slovakia, Slovenia, Hungary), participated also 5 states in the West Balkans that want to access EU (Albania, Bosnia and Herzegovina, Montenegro, Macedonia and Serbia).

[2] Micha Romanowski, expert in Eurasia businesses at the German Marshall State Fund, a report published in 2017 by YaleGlobal Online.

 

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