Order Code RL32136
CRS Report for Congress
Received through the CRS Web
Future of the Balkans and
U.S. Policy Concerns
Updated January 18, 2006
Steven Woehrel
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Future of the Balkans and U.S. Policy Concerns
Summary
The United States, its allies, and local leaders have achieved substantial
successes in the Balkans since the mid-1990s. The wars in the region have ended,
and all of the countries are undertaking political and economic reforms at home and
orienting their foreign policies toward Euro-Atlantic institutions. However, difficult
challenges remain, including resolving issues of political status, especially the status
of Kosovo; breaking up the power of political-criminal groups; enforcing the rule of
law; bringing war criminals to justice; and reforming the economies of the region.
The current goal of the international community in the Balkans is to stabilize
the region in a way that is self-sustaining and does not require direct intervention by
NATO-led forces and international civilian officials. Relatedly, the United States
is seeking to reduce the costs of its commitments to the region, in part due to
competing U.S. and international priorities, such as the war on terrorism, and efforts
to stabilize Iraq and Afghanistan, which have placed strains on U.S. resources.
SFOR and KFOR, the NATO-led peacekeeping forces in Bosnia and Kosovo, have
been rapidly reduced, raising the question what impact the withdrawals will have on
the region’s stability. In December 2004, SFOR’s mission was concluded and the
European Union took over peacekeeping duties in Bosnia. A few hundred U.S.
troops remain in Bosnia to assist Bosnian defense reforms and fight terrorism. Large-
scale anti-Serb riots in Kosovo in March 2004 called into question the adequacy of
KFOR and U.N. efforts to promote security and stability in Kosovo.
Since the September 11, 2001 attacks on the United States, the war on terrorism
has been the United States’ main foreign policy priority, including in the Balkans.
Before September 11, Al Qaeda supporters operated from Bosnia and Albania.
However, the Administration has said that these countries and others in the region
have “actively supported” the war on terrorism, shutting down terrorist front
organizations and seizing their assets. Although their efforts are hampered by the
weakness of local government institutions, U.S. anti-terrorism efforts in the Balkans
are aided by U.S. military and intelligence assets in the region, as well as a reservoir
of good will among local Muslims of all ethnic groups.
Congress has played an important role in shaping U.S. Balkans policy. Some
Members supported Clinton Administration efforts to intervene to stop the fighting
in the region, while others were opposed. Members were leery of an open-ended
commitment to the region and sought to contain these costs through adoption of
benchmarks and limiting U.S. aid and troop levels to the region to about 15% of the
amounts provided by all countries. The end of the wars in the Balkans and the shift
in U.S. priorities in the wake of the September 11 attacks has moved the Balkans to
the periphery of congressional concerns, at least when compared to the situation in
the 1990s. However, in recent years, Congress has continued to have an impact on
such issues as Kosovo’s future status and conditioning some U.S. aid to Serbia on
cooperation with the International Criminal Tribunal for the Former Yugoslavia. The
second session of the 109th Congress may consider legislation on these topics.

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Contents
Introduction: Are the Balkans Still Important to the United States? . . . . . . . . . . . 1
Current Challenges in the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Political Status Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Kosovo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Serbia and Montenegro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Establishing Democracy and the Rule of Law . . . . . . . . . . . . . . . . . . . . . . . 4
Economic Reform and Improving Living Standards
. . . . . . . . . . . . . . . . . . 5
U.S. Policy Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Creating Self-Sustaining Stability in the Balkans . . . . . . . . . . . . . . . . . . . . . 6
Filling a Possible Security Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Restructuring the International Civilian Presence in the Region . . . . . . 9
U.S. and International Aid in the Balkans . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The War on Terrorism and the Balkans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Role of Congress in U.S. Balkans Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Future of the Balkans
and U.S. Policy Concerns
Introduction: Are the Balkans
Still Important to the United States?
The United States and the international community have achieved substantial
successes in the Balkans since the mid-1990s. The wars in the former Yugoslavia
have ended, and all of the countries are undertaking political and economic reforms
at home and orienting their foreign policies toward Euro-Atlantic institutions. Noting
the relative stability of the Balkans at present, some skeptics doubt that the United
States still has vital security interests in the Balkans that warrant the investment of
U.S. forces. Given the increasing strain on U.S. forces due to deployments in
Afghanistan, Iraq and elsewhere, they argue that the United States should accelerate
the process of turning over responsibility for the region to the Europeans, who have
a greater stake in the region’s stability.
Advocates of continued U.S. engagement in the Balkans point out that both the
Clinton and Bush Administrations have stated that ensuring the stability of the
Balkans is an important part of a U.S. vital interest in securing a Europe whole, free
and at peace. They say the United States needs to finish the job of consolidating
peace in the Balkans and that a premature U.S. pullout from the region could cause
the current positive trends in the region to unravel. They note that the United States
has strong political credibility in the region, particularly among Bosniaks and
Albanians, which the Europeans lack. In addition, the region may have a higher
strategic profile given possible plans to shift U.S. troops from Western Europe to
new NATO members Romania and Bulgaria, for operations in the Middle East.
Proponents of continued U.S. engagement also say that a U.S. presence is needed to
uproot terrorist networks in the region.
Current Challenges in the Region
Political Status Issues
The wars of the 1990s were ostensibly fought over the political status and
borders of the successor states of the former Yugoslavia, and at least two of these
issues remain unresolved.
Kosovo. Perhaps the most difficult status issue involves Kosovo. The future
status of Kosovo will be determined by the U.N. Security Council, as set down in
UNSC Resolution 1244. However, the resolution provides very little detail on the
issue, saying only that Kosovo’s status should be determined by an unspecified

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CRS-2
“political process.” UNSC Resolution 1244 explicitly confirms the territorial
integrity of the Federal Republic of Yugoslavia (which consisted of Serbia and
neighboring Montenegro) and calls for “substantial autonomy” for Kosovo “within
the Federal Republic of Yugoslavia.” The overwhelming majority of ethnic
Albanians in Kosovo (who make up over 90% of the province’s population) favor
independence for the province. The Serbian minority in Kosovo (under 10% of the
population) and the Serbian government want the province to remain part of Serbia.
Serbian leaders say that they are willing to offer Kosovo “more than autonomy, but
less than independence.” They have also proposed the creation of autonomous
Serbian areas within an autonomous Kosovo.
Until recently, the consensus in the international community on the status issue,
as laid out by UNMIK, has been dubbed “standards before status.” According to this
policy, Kosovo’s institutions and society must achieve certain standards, including
democratization, the rule of law and respect for ethnic minorities, before the issue of
Kosovo’s final status is discussed. Kosovar Albanians expressed opposition to this
approach, which they believe is designed to delay their aspirations for independence
indefinitely.
The “standards before status” policy was called into question by widespread
ethnic Albanian riots against Serbs in Kosovo on March 17-18, 2004, the worst
inter-ethnic violence since the end of the 1999 Kosovo war. Ethnic Albanian crowds
attacked several ethnic Serb enclaves as well as international security forces trying
to control the rioters. Nineteen civilians were killed in the attacks, more than 900
persons were injured, and over 4,000 were forced from their homes. UNMIK also
reported that the riots resulted in the destruction of or serious damage to about 30
churches and monasteries, 800 houses, and 150 vehicles. The March 2004 events
underlined both how far Kosovo is from meeting the standards and the frustration of
Kosovo Albanians over what they see as the temporizing of the international
community on the status question.
The March 2004 riots led to an acceleration of international efforts to deal with
the status question. U.N. envoy Kai Eide submitted a report to U.N. Secretary
General Kofi Annan in October 2005 on whether Kosovo had made “sufficient
progress” in implementing the standards for status talks to begin.1 According to both
Serbian and ethnic Albanian officials, the Eide report provides a relatively accurate
and balanced assessment of the situation in Kosovo. The report praises Kosovo’s
achievements in setting up political and economic institutions. On the other hand,
he noted that the economic situation in the province is “bleak;” that Kosovo’s police
and judicial system suffer from serious weaknesses; and that the prospects for a
multi-ethnic society are “grim.” Nevertheless, Eide recommended that status talks
should begin, noting growing impatience with the status quo within the ethnic
Albanian community and “Kosovo fatigue” within the international community. In
November 2005, U.N. Secretary General Kofi Annan appointed Martti Ahtisaari of
Finland to lead the status talks. Talks are expected to begin in January 2006.
1 For a text of the October 7, 2005, Eide report, see the U.N. website at [http://www.un.org/
Docs/sc/unsc_presandsg_letters05.htm].

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Many experts believe that “conditional independence”is a likely outcome,
although this view has not been endorsed by U.S. or European officials. Under this
proposal, Kosovo would receive independence in exchange for pledges from Kosovo
to rule out the establishment of a greater Albania and agree to decentralize Kosovo
in order to give more autonomy to ethnic minorities.2 The United States has played
a leading role on the issue of Kosovo status, insisting on status talks in 2006 and
pushing for their conclusion by the end of the year.3
Serbia and Montenegro. In February 2003, the Federal Republic of
Yugoslavia was dissolved and a new, much looser “state union” was formed between
its two constituent republics, Serbia and Montenegro. The new arrangement was
brokered by the European Union in 2002 to head off efforts of Montenegrin leaders
to declare their republic’s independence. However, it did not eliminate this issue; it
permitted the parties to secede from the union in three years. The European Union,
supported by the United States, opposed Montenegro’s independence because they
believe that it could provoke instability in Montenegro (where polls have shown
independence is supported at best by a slender majority) as well as elsewhere in the
region.
A large part of the concern about Montenegrin independence is the possible
effect on the situation in Kosovo. The union’s Constitutional Charter describes
Kosovo as part of Serbia, a provision that has been denounced by Kosovar Albanians.
Kosovar Albanians claim that since the FRY no longer exists, Kosovo can no longer
be considered part of it according to UNSC Resolution 1244, and is therefore free to
become independent. Serbia claims that the deal between Serbia and Montenegro
demonstrates international opposition to Kosovo’s independence.4
Montenegro’s leaders have vowed to hold a referendum on independence in
April 2006, in conformity with the three-year moratorium set by the 2003
Constitutional Charter. The EU, once flatly hostile to Montenegrin independence, has
shifted its position somewhat. The EU has insisted that the referendum be held in
strict accordance democratic standards and the recommendations by the Venice
Commission of the Council of Europe. The commission suggested that Montenegro
retain the minimum 50% turnout requirement contained in current law for the
referendum to be valid. The commission also suggested that an unspecified level of
support exceeding a simple majority be required for independence to be adopted.
Either threshold could be difficult for pro-independence forces to meet, depending
on how they are interpreted and applied. EU-mediated talks between the government
and the opposition on the terms of the independence vote may prove difficult, as pro-
union forces have little incentive to cooperate with the government, particularly given
EU skepticism about independence.
2 See Kosovo: Toward Final Status, International Crisis Group, January 24, 2005, at
[http://www.crisisgroup.org/home/index.cfm?].
3 For more on Kosovo and status talks, see CRS Report RS21721, Kosovo’s Status and U.S.
Policy, by Steven Woehrel, and CRS Report RL31053, Kosovo and U.S. Policy, by Steven
Woehrel and Julie Kim.
4 For more on the Serbia and Montenegro relationship, see CRS Report RS21568, Serbia
and Montenegro Union: Prospects and Policy Implications, by Julie Kim.

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U.S. officials have said that the United States does not oppose the Montenegrin
government’s efforts to hold an independence referendum but has warned that the
referendum must be held peacefully and as the result of a process that “all sides”
accept as legitimate. He added that the main U.S. goal in the region is “reform and
progress toward Europe for both Serbia and Montenegro, in or outside the state
union.”5
Establishing Democracy and the Rule of Law
The domestic political situation in the Balkan countries has improved in recent
years. All the countries in the region have held largely free and fair elections. In
Croatia and Serbia, semi-authoritarian nationalist regimes were removed from power
peacefully in 2000. Countries in the region have undertaken efforts to redraw their
constitutions along more democratic lines. However, serious problems remain. The
legitimacy of democratic institutions is challenged by the weakness of government
structures, slow progress toward the rule of law, corruption, and organized crime. As
in other transition countries in Central and Eastern Europe, part of this problem is
due to the Communist heritage of the region. However, an even more serious
obstacle, particularly in the cases of Bosnia, Serbia and Kosovo, is the power of
political-criminal groups, often associated with war criminals and local security
services. These groups played a key role in igniting the wars in the Balkans and
became much stronger because of them. In addition to retarding progress in
democratization and the rule of law, these groups also raise ethnic tensions by acts
of violence against minorities and engage in trafficking in persons, drugs and
weapons.6
The murder of Serbian Prime Minister Zoran Djindjic in March 2003 was a
dramatic example of the seriousness of this threat to the region’s stability. Although
the Serbian government arrested many persons associated with the plot, it is not clear
that it has dealt fully with the issues of fighting organized crime and corruption, as
well as security services reform. The international community has moved against
such groups in Bosnia and Kosovo, reducing their economic resources and access to
political offices, but they remain powerful.
One of the most important steps taken by local leaders and the international
community in this regard is the capture and prosecution of many alleged war
criminals. Nevertheless, a few key indicted war criminals remain at large, including
former Bosnian Serb army chief Ratko Mladic and former Bosnian Serb leader
Radovan Karadzic. Moreover, local courts have only begun to take up war crimes
cases against persons of their own ethnic groups. Failure to bring war criminals to
5 Statement of Nicholas Burns before the Senate Foreign Relations Committee, November
8, 2005.
6 Council on Foreign Relations, Balkans 2010: Report of an Independent Task Force,
December 2002, at [http://www.cfr.org].

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CRS-5
justice undermines the rule of law and provides a boost to criminals and nationalist
extremists.7
While the international community has provided large amounts of aid to
strengthen local institutions and the rule of law, it may also itself be responsible for
some of the problems. The United States and its European allies helped craft the
decentralized political system of Bosnia, which was a product of post-war political
compromise. In recent years, they have viewed the arrangement as an unworkable
one that hinders the country’s Euro-Atlantic integration, and have pushed for the
strengthening of central government institutions.8 In both Bosnia and Kosovo,
international officials frequently have imposed policies from above, perhaps fostering
a culture of dependency and political irresponsibility among local elites. Given these
problems, the region’s transition to democracy and the rule of law is likely to be
lengthy and difficult.9
In Bosnia and Kosovo, international officials have pursued a policy of
intensifying reforms from above in the short run, in order to lay the basis for local
leaders to continue them as the international role declines. However, it is unclear
whether these reforms will have a sufficient political constituency to maintain their
momentum when international forces are pulled out. As in the case of the countries
of the former Soviet bloc, where reforms have unfolded slowly and inconsistently,
there appear to be no easy answers to these issues. The international community may
need to continue to provide conditional assistance for reforms and the perspective of
integration into Euro-Atlantic institutions if it wants to encourage a stable, long-term
political consensus for reform.
Economic Reform and Improving Living Standards
The economies of the region face the double burden of a Communist legacy as
well as well as continued resistance to reforms and economic transparency by local
leaders. Some of the region’s economic problems are closely related to its political
problems. Weak and corrupt state structures have been an obstacle to rationalizing
tax and customs systems to provide adequate revenue for social programs and other
government functions. The absence of the rule of law has hampered foreign
investment in some countries due to a lack of transparency in the privatization
process and concern over the sanctity of contracts. In Bosnia, the presence of two
“entities” has hindered the development of a single market in that country.
Privatization in Kosovo has been slowed by uncertainty over ownership of assets,
which is a reflection of uncertainty over the province’s future status.10
7 See CRS Report RS22097, Balkan Cooperation on War Crimes Issues, by Julie Kim.
8 For more information, see CRS Report RS22324, Bosnia: Overview of Issues Ten Years
After Dayton, by Julie Kim.
9 International Crisis Group, “Bosnia’s Nationalist Governments: Paddy Ashdown and the
Paradoxes of State-Building,” July 22, 2003, at the ICG website
[http://www.crisisgroup.org/home/index.cfm?] accessed on October 30, 2003.
10 Council on Foreign Relations: Balkans 2010 report, at [http://www.cfr.org].

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Substantial progress has been made in economic reforms in some countries,
particularly in Croatia and Serbia and Montenegro. Fiscal and monetary austerity,
with the assistance of international financial institutions, has permitted many
countries to reduce inflation and stabilize their currencies. Serbia has embarked on
the privatization of its industries and begun to reform its weak banking sector, a
common problem in the region. However, many companies in the region are in poor
shape, in part due to mismanagement by former Communist and nationalist regimes.
Painful decisions have to be made to shutter uncompetitive companies, which are
aggravating an already severe problem of unemployment. For example,
unemployment in Serbia is over 30%, in Bosnia over 40%, and in Kosovo about
50%, although the presence of the informal economy probably means that this is an
overstatement.11 A particularly vulnerable group, especially in Bosnia and Serbia, is
the large population of refugees and displaced persons. Refugees who return to their
homes face economic problems of their own, such as a lack of jobs and social
services. This has meant that a substantial proportion of those who have returned are
older persons living on a pension.
Declining international assistance to the Balkans has had a negative impact on
the economies of the region, particularly in Bosnia and Kosovo. These economies
have been highly dependent not only on aid itself, but on the spending of
international officials and organizations in the region. Although positive signs have
emerged in recent years, the economic challenges faced by the countries of the
region mean that a decade or more could be required before the poorer countries
approach living standards closer to those of EU countries. As in the case of political
reform, which is closely linked to successful economic reform, a long-term
international commitment of aid and advice may be required to build and maintain
a local consensus for often painful measures. Perhaps an even greater stimulus to
reform in these countries could be the prospect of increased foreign investment.
U.S. Policy Concerns
Creating Self-Sustaining Stability in the Balkans
The current goal of the United States and the international community in the
Balkans is to stabilize the region in a way that does not require direct intervention by
NATO-led forces and international civilian officials, and puts it on a path toward
integration into Euro-Atlantic institutions. The United States and EU countries
support a larger role for the EU in the region, with a smaller role by the United
States, at least as far as troop levels and aid are concerned. These goals have been
given greater urgency by competing U.S. and international priorities that have
emerged since September 11, 2001, such as the war on terrorism, and efforts to
stabilize Iraq and Afghanistan, which have placed strains on U.S. resources.
11 European Commission, Directorate-General for Economic and Financial Affairs, “The
Western Balkans in Transition,” European Economy, No. 1, January 2003, available online
at [http://europa.eu.int/comm/economy_finance/index_en.htm], accessed on October 30,
2003.

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In the past, some senior U.S. Army officers have reportedly been concerned that
their forces are overstretched and have sought the withdrawal U.S. troops in the
Balkans as part of a global review of U.S. deployments.12 However, since taking
office in 2001, the Administration has maintained the position that the U.S.
peacekeeping forces went into the Balkans with the Europeans and would leave
together with them.
Although about 2,000 U.S. troops are currently deployed in the Balkans, experts
estimate that three times as many troops are affected by the deployment, including
those who are about to rotate into an assignment and retraining for troops who have
rotated out. Moreover, constant deployments throughout the world may have a
negative impact on re-enlistment throughout the U.S. military, including in the
National Guard units that now play a key role in U.S. deployments to the Balkans.
One alternative to a pullout from the Balkans and other deployments, an increase in
the total size of the U.S. Army, has been resisted by the Administration.13
In December 2004, the mission of SFOR, the NATO-led peacekeeping force in
Bosnia, came to an end, and peacekeeping duties were handed over to a European
Union force (EUFOR) of about 7,000 troops. The EU force is tasked with helping
to maintain a secure environment in Bosnia and support Bosnia’s progress toward
integration with the EU. NATO continues to have a headquarters presence in
Sarajevo, with a residual U.S. force presence of about 250 troops. The NATO
presence continues to assist in efforts to promote defense reforms, combat terrorism,
and assist the capture of persons indicted for war crimes.14 Currently, about 18,000
NATO-led troops in KFOR are in Kosovo, of which about 1,700 are U.S. troops.
Filling a Possible Security Gap. An important concern facing both Balkan
deployments is who, if anyone, will fulfill the tasks that they are currently performing
as military forces are withdrawn. One important issue is policing. Formally, EUFOR
and KFOR do not play a direct role in policing duties in Bosnia and Kosovo.
However, they do provide “area security” by regular patrolling. The Office of the
High Representative (OHR), the leading international civilian body in Bosnia, has
attempted to reduce the control of the semi-autonomous “entities” within Bosnia over
the police, with mixed results, due to resistance from the Republika Srpska, the
largely Serb entity.
The March 2004 riots in Kosovo exposed serious weaknesses in policing and
security in Kosovo. With notable exceptions, the local Kosovo Police Service did
not perform very well, sometimes melting away in the face of the rioters and in a few
cases joining them. CIVPOL, the U.N. police contingent in Kosovo, was hampered
by a lack of cohesion and leadership. There were many reports of KFOR troops,
outnumbered by the rioters and unwilling to fire on them, refusing to intervene to
12 Judy Dempsey, Stephen Fidler and Peter Spiegel, “Pentagon Urged to Pull Out of
Balkans,” Financial Times, September 17, 2003, 10.
13 Niels C. Sorrells and Colin Clark, “Undermanned and Overdeployed? Congress Debates
Expanded Army, Congressional Quarterly Weekly, August 2, 2003, p. 1978.
14 For more information, see CRS Report RS21774, Bosnia and International Security
Forces: Transition from NATO to the European Union, by Julie Kim.

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stop the destruction and looting of property. Some KFOR units reportedly failed
even to protect Serb civilians and U.N. police from violence.15 After the riots, KFOR
officers say they have taken steps to deal with these problems, including by
establishing clearer lines of authority and consistent rules of engagement.
EUFOR and KFOR have also played important roles in overseeing the military
forces of Bosnia and Kosovo. EUFOR inspects the military arsenals of Bosnia’s two
armies. EUFOR continues to uncover illegal weapons caches, underlining that
tensions in Bosnia, while greatly lessened in the past decade, have not disappeared.
NATO and the Office of the High Representative worked together to reform the two
Bosnian armies and reduce them in size. These reforms include the unification of
Bosnia’s two armies under a single command structure, including a Minister of
Defense and Chief of Staff. However, the armies remain separate at lower levels.
NATO set a united command as a key condition for permitting Bosnia and
Hercegovina to join the Partnership for Peace program. Bosnia’s PFP membership
is now contingent on cooperating fully with the International Criminal Tribunal for
the Former Yugoslavia.16
KFOR monitors the Kosovo Protection Corps, which was formed in 1999 from
the Kosovo Liberation Army. Although ostensibly meant to deal with civil
emergencies, the KPC is seen by many of its members and many Kosovar Albanians
as the nucleus of a future army of an independent Kosovo. In addition to overseeing
the KPC, KFOR also monitors Kosovo’s borders to ensure ethnic Albanian
guerrillas do not use Kosovo as a springboard to destabilize neighboring countries,
and that Serbian military forces stay out of the province. KFOR played an important
role in forcing the dissolution of an ethnic Albanian guerrilla force in southern Serbia
in 2000. However, members of the KPC played leading roles in an ethnic Albanian
revolt against the Macedonian government. Although the conflict in Macedonia
ended in 2001 after talks brokered by the EU and United States, a shadowy ethnic
Albanian group calling itself the “Albanian National Army” continues to commit
scattered acts of violence in Kosovo, southern Serbia and Macedonia with the alleged
objective of uniting all ethnic Albanian lands.
In addition to hampering efforts by ethnic Albanian extremists to destabilize
neighboring countries, KFOR’s presence also deters possible Serbian aggression or
military provocations against Kosovo, although an invasion of Kosovo by Serbian
troops is unlikely to occur under the current pro-Western government in Belgrade.
Nevertheless, escalation over flashpoints, such as the divided town of Mitrovica in
northern Kosovo, is possible. The danger could be increased if the ultranationalist
Radical Party comes to power in Serbia. Given these concerns, the stabilizing
presence of KFOR may be needed even after Kosovo’s status is determined, if a large
part of the Serbian public does not accept that determination. KFOR may also be
needed to help guarantee the rights of ethnic minorities in Kosovo.
15 For a detailed account of the riots and the response of UNMIK and KFOR to them, see
International Crisis Group, “Collapse in Kosovo,” April 22, 2004, at the ICG website,
[http://www.crisisgroup.org/home/index.cfm?].
16 “Testimony of Gen. William L. Nash (ret.) at a hearing before the House International
Relations Committee, Subcommittee on Europe, April 10, 2003, Serial no. 108-13.

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Restructuring the International Civilian Presence in the Region.
Another issue, closely linked to EUFOR and KFOR’s future, is how to reorganize the
international civilian presence in the region. U.S. and European officials say that the
ad hoc arrangements cobbled together at the end of the conflicts in Bosnia and
Kosovo, under which local authorities are supervised and sometimes overruled by
international bureaucracies, should be phased out. They believe that the two main
forces for Euro-Atlantic integration, the European Union and NATO, should have a
clear leading role in the region, but through advice and aid, not direct rule. The EU
has opened membership talks with some countries, and has concluded or is
negotiating the conclusion of Stabilization and Association agreements (SAA) with
others. The SAA provides a framework for the EU’s relations with the Balkan
countries and holds out the prospect of eventual EU membership. Croatia and
Macedonia were chosen in 2005 to start membership talks with the EU. Serbia and
Montenegro and Bosnia and Herzegovina received the go-ahead to start SAA talks
with the EU in late 2005. Kosovo cannot participate in the SAA process because it
is deemed to be part of Serbia but participates in an SAA “tracking mechanism” that
provides it with advice and support, with the aim of bringing Kosovo closer to the
EU.
NATO’s future role in the region will take place mainly through the Partnership
for Peace program and, in the longer term, the Membership Action Plan process, as
has already occurred in the case of Albania, Croatia, and Macedonia.
Responsibilities for prosecuting war crimes will shift from the ICTY to local courts,
especially after the two most notorious indictees, former Bosnian Serb leader
Radovan Karadzic and former Bosnian Serb army chief Ratko Mladic are turned
over to the Tribunal. U.N. Security Council Resolution 1503 calls for the ICTY to
complete its investigations by 2004, its trials by 2008 and all appeals by 2010. In
Bosnia, international officials worked with local leaders and the ICTY to create a
war crimes chamber to try war crimes cases within Bosnia. The United States and
other countries assisted Serbia’s efforts to set up its own war crimes court.
The United States could gradually play a smaller role in the region over time,
acting largely through NATO and providing bilateral aid in selected areas, such as
reform of intelligence and internal security bodies, military reform and rule of law
assistance. However, the prestige and credibility that the United States has in the
region will likely still be needed to exercise leadership in resolving some of the most
difficult issues, such as the arrest of war criminals and ensuring Kosovo’s stability
as its status is determined and afterward.17
One problem with reducing the direct role of the international community in the
region is a familiar one: the dilemma of either imposing the policies that it wants on
local figures, or accepting local solutions that are often incompatible with
international goals. One possible solution advocated by some experts is a burst of
increased activism by the international community in the short run, for example to
capture war criminals and break the power of organized crime, in order to prepare the
way for a reduction in the direct international role later. However, it remains to be
17 Council on Foreign Relations, Balkans 2010: Report of an Independent Task Force,
December 2002, at [http://www.cfr.org].

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seen what staying power these changes will have if they are not backed by local
political forces when OHR’s role in Bosnia is reduced or ends, even when backed by
aid conditionality. Similar questions may be asked of UNMIK’s policies in Kosovo,
particular since UNMIK is turning over more of its tasks to the local Kosovo
government. UNMIK’s role in Kosovo is expected to end in 2006, after Kosovo’s
status is determined. It may be succeeded by an EU-led oversight mission that may
resemble OHR’s powers in Bosnia but will almost certainly lack the direct
administrative control over Kosovo that UNMIK has had.
U.S. and International Aid in the Balkans
Since the end of the wars in the region, U.S. aid has gradually declined, in part
due to a natural shift from humanitarian aid to technical assistance and partly due to
a focus on assistance to other regions of the world. U.S. bilateral assistance
appropriated under the SEED Act (which now almost exclusively focuses on Balkan
countries) fell from $621 million in FY2002, to $442 million in FY2004, to $396.6
million in FY2005, to $361 million for FY2006.
The overall goal of U.S. aid to the Balkans is to prepare the countries for
integration into Euro-Atlantic institutions. U.S. programs are aimed at promoting
good governance, fighting corruption, strengthening civil society and an independent
media, enhancing market reforms, reducing threats of weapons of mass destruction,
preventing trafficking in persons and contraband, and promoting the rule of law and
human rights throughout the region.
U.S. bilateral aid plays a lesser role in assisting macroeconomic reforms,
restructuring local industries and the banking sector, and rebuilding infrastructure,
although the United States provides important advice in these areas through technical
assistance programs. Most funding for these functions are performed by international
financial institutions such as the International Monetary Fund, World Bank, and the
European Bank for Reconstruction and Development. U.S. officials see the EU as
playing the leading role in providing assistance to reform these countries along EU
lines, eventually leading to EU membership. As these countries move closer to EU
standards, the more advanced countries will “graduate” from U.S. assistance.18
Some U.S. and European experts have criticized what they view as a lack of
vision by the EU in its policy toward the region. Under its current CARDS aid
program for the region, EU allotted 4.65 billion Euro ($5.6 billion, at current
exchange rates) from 2000-2006.19 Skeptics of EU policy say this level of resources
appears at odds with commitments made at the June 2003 Thessaloniki EU summit
with the countries of the Western Balkans. At the summit, EU leaders recognized the
countries of the region as prospective EU members. Critics point to generous EU
pre-accession aid given to Central European countries and to neighboring Bulgaria
and Romania as a model, saying more extensive aid could help the Balkan countries
18 FY 2004 SEED Act Implementation Report, at the State Department website
[http://www.state.gov/p/eur/rls/rpt/c16087.htm].
19 CARDS financial statistics at the European Union website [http://europa.eu.int/comm/
enlargement/cards/index_en.htm].

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restructure their economies and legal systems more quickly to meet EU conditions
for membership, while bringing local living standards somewhat closer to EU
standards.20
The EU has taken steps in recent months that appear to be aimed at dealing with
these problems. For 2007-2013, CARDS is being folded into the Instrument for Pre-
Accession Assistance (IPA), which will help all countries seeking EU membership.
However, the program will continue to distinguish between countries that have been
chosen to begin membership negotiations (such as Croatia and Macedonia) and those
who have not yet been selected (such as Albania, Bosnia, and Serbia and
Montenegro).
EU countries have a substantial interest in the stability of the Balkans. The
region’s problems already have a substantial impact on EU countries, in such areas
as trafficking in drugs and persons. The effect could be considerably worse if the
region deteriorates into chaos and conflict. However, it is possible that the EU’s
other problems, including the financial demands of new states admitted in 2004 and
Romania and Bulgaria in 2007 or 2008 as well as budgetary pressures faced by key
member states, may make providing additional resources for the Balkans difficult.
Analysts have expressed concern that the continued differentiation between
candidates and potential candidates in the IPA aid account may lead to even less
funding going to potential Balkan EU membership candidate states than at present.21
The prospects for Balkan countries to join the EU are also clouded by public
skepticism in wealthy EU member states about the benefits of enlargement and the
rejection of a proposed EU constitution by voters in France and the Netherlands in
2005. Moreover, it may be as long as a decade or more for many of the countries to
gain membership, given their current poverty and lack of progress on reforms.22
The War on Terrorism and the Balkans
Since the September 11 attacks on the United States, the war on terrorism has
been the United States’ main foreign policy priority and has had an impact on U.S.
policy in the Balkans. In the 1990s, wars and political instability provided an
opportunity for Al Qaeda and other terrorist groups to infiltrate the Balkans.
However, U.S. and European peacekeeping troops, aid, and the prospect of Euro-
Atlantic integration helped to bring more stability to the region. Moreover, the
September 11, 2001, attacks on the United States underscored for the countries of the
region the dangers of global terrorism and resulted in increased U.S. attention and aid
to fight the terrorist threat. In part as a result, many experts currently do not view the
Balkans as a key region harboring or funding terrorists, in contrast to the Middle
East, South Asia, Southeast Asia, and Western Europe. However, experts note that
the region may play a role in terrorist plans, as a transit point for terrorists, as well
20 Discussions with U.S. and European Balkans experts.
21 For more, see the European Stability Initiative website at [http://www.esiweb.org].
22 For more information on EU enlargement policies, see the EU Commission’s Enlargement
website at [http://europa.eu.int/comm/enlargement/index_en.html].

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as for rest and recuperation. Moreover, they agree that the region’s continuing
problems continue to leave it vulnerable to terrorist groups. In October 2005,
Bosnian police captured an Islamic terrorist cell that was plotting to blow up the
British Embassy in Sarajevo. This and several other incidents have caused some
experts to be concerned that the Balkans may soon play a greater role in terrorist
plans than in the past.23
U.S. officials have cited the threat of terrorism in the Balkans as an important
reason for the need for continued U.S. engagement in the region. In addition to the
need to take steps to directly combat terrorist infrastructure in the region, U.S.
officials say that U.S. efforts to bring stability to the region also help to fight
terrorism. They note that political instability, weak political and law enforcement
institutions, and poverty provide a breeding ground for terrorist groups. U.S.
objectives are also outlined in the 9/11 Commission Report and the President’s
National Strategy for Combating Terrorism, which calls for the United States to
work with other countries to deny terrorists sponsorship, support, and sanctuary, as
well as working to diminish the underlying conditions that terrorists seek to exploit.
The United States has a variety of instruments to fight terrorism in the Balkans.
One is the direct involvement of U.S. troops in Bosnia and Kosovo. The United
States provides bilateral counterterrorism assistance to the countries of the region.
The overall U.S. aid program to the region, aimed at bringing stability through
strengthening the rule of law and promoting economic reform, also serves to combat
the sometimes lawless climate in which terrorists can thrive. U.S. aid helps to
develop Bosnia’s export control regime, including over weapons of mass destruction
and dual-use technology. The United States has encouraged regional cooperation on
terrorism and international crime through the Southeast European Cooperation
Initiative (SECI). In the longer term, efforts to stabilize the region, and thereby
perhaps reduce its attractiveness to terrorists, are also dependent upon integrating it
into Euro-Atlantic institutions.24
The Role of Congress in U.S. Balkans Policy
Congress has played an important role in shaping U.S. Balkans policy.
Members of Congress spoke out strongly against atrocities by Serbian forces in
Croatia and Bosnia in the early 1990s. Some Members pushed for lifting the arms
embargo against the Bosniaks, so that they could better defend themselves.
Congressional pressure may have encouraged the Clinton Administration to play a
bigger role in stopping the fighting in Bosnia, ultimately culminating in the Dayton
Peace Accords in 1995. Congress also played an important role in supporting the
International Criminal Tribunal for the Former Yugoslavia and pressing for the arrest
and transfer of indictees.
23 Rade Maroevic and Daniel Williams, “Terrorist Cells Find Foothold in the Balkans,”
Washington Post, December 1, 2005, 16.
24 For more information on terrorism in the Balkans, see CRS Report RL33012, Islamic
Terrorism and the Balkans, by Steven Woehrel.

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Despite the activism of some Members on these issues, many in Congress
remained cautious about U.S. military involvement in the Balkans. The deployment
of U.S. peacekeepers in Bosnia in 1995 and the air war in Kosovo in 1999 provoked
heated debate in Congress, in part due to policy disagreements, in part due to partisan
conflict between the Clinton Administration and a Republican-led Congress.
However, despite sometimes harsh criticism, both military missions received full
congressional funding. Nevertheless, concerns about the costs of open-ended
missions led Congress to try several strategies to limit these uncertainties. These
included pushing the Administration to set benchmarks for the deployments and to
report on them. Congress also sought to limit U.S. engagement by pushing for
greater burdensharing. As a result of legislation and congressional pressure, the U.S.
aid and troop contributions in Bosnia and Kosovo have been capped at no more than
15% of the total contributions of all countries.
The end of the wars in the Balkans and the shift in U.S. priorities in the wake
of the September 11 attacks have moved the Balkans to the periphery of
congressional concerns, at least when compared to the situation in the 1990s.
However, Congress continues to have an important impact in several areas. Foreign
operations appropriations bills have made modest reductions in SEED funding cuts
proposed by the President, and have shown particular support for aid to Montenegro,
in recognition of that republic’s resistance to the Milosevic regime until the Serbian
leader’s ouster in 2000.
Congress has also played a critical role in helping to bring Serbian war criminals
to justice. Since 2000, Congress has included provisions in foreign operations
appropriations bills that attached conditions to U.S. aid to Serbia, requiring
cooperation with the war crimes tribunal, ending support to Bosnian Serb structures,
and respect for minority rights. The FY2006 foreign aid appropriations bill (P.L.
109-102) also contains the aid conditions. The measure specifically calls for Ratko
Mladic and Radovan Karadzic to be transferred to the tribunal. It can be argued that
these provisions were a key catalyst for Milosevic’s transfer to The Hague in 2001,
as well as the transfer of many others since then. However, the fear of suspected war
criminals that they would be turned over to the Tribunal to comply with the aid
criteria may have led to the murder of Prime Minister Djindjic in March 2003. A
backlash against U.S. pressure to cooperate with the Tribunal may have also helped
the ultranationalist Radical Party become the largest party in the Serbian parliament
after December 2003 elections in Serbia.25 The Radicals were excluded from the
Serbian government formed after the election, but the current, weak coalition
government in Serbia has a mixed record of cooperation with the Tribunal. The
second session of the 109th Congress may also take up the aid conditionality issue in
the FY2007 foreign aid bill.
Another Balkan issue on which some Members have focused on is the status of
Kosovo. In the 108th Congress, several House and Senate resolutions (H.Res. 11,
H.Res. 28, and S.Res. 144) were introduced that dealt with the issue, some of them
supporting independence for Kosovo. However, while some Members have strongly
25 For more information, see CRS Report RL30371, Serbia and Montenegro and U.S. Policy,
and CRS Report RS21686, Conditions on U.S. Aid to Serbia, both by Steven Woehrel.

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favored Kosovo’s independence, others have been leery of taking steps that they
believe could destabilize the region. H.Res. 28 was discussed at a House
International Relations Committee hearing on Kosovo’s future in May 2003 and at
a markup session on the resolution in October 2004, but was not voted on by the
Committee and did not receive floor consideration in the 108th Congress.
The 109th Congress has also taken up the issue of Kosovo’s status. On January
4, 2005, Representative Tom Lantos introduced H.Res. 24, which expresses the sense
of the House that the United States should support Kosovo’s independence. On
October 7, 2005, the Senate passed S.Res. 237, a resolution supporting efforts to
“work toward an agreement on the future status of Kosovo.” The resolution said that
the unresolved status of Kosovo is not sustainable. It did not express support for any
particular status option but said that it should “satisfy the key concerns” of the people
of Kosovo and Serbia and Montenegro. Other resolutions may be introduced in the
second session of the 109th Congress, during status negotiations. An identical House
resolution was introduced on December 17, 2005 (H.Res. 634). The second session
of the 109th Congress may consider legislation on Kosovo’s status.

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