Order Code RL32136
Future of the Balkans and
U.S. Policy Concerns
Updated May 22, 2008
Steven Woehrel
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division

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 dealing with the impact of Kosovo’s independence;
fighting organized crime, corruption, and enforcing the rule of law; bringing war
criminals to justice; and reforming the economies of the region.
The goal of the United States and the international community is to stabilize the
Balkans 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 has
reduced 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 reduced over the
past decade. In December 2004, SFOR’s mission was concluded, and European
Union troops took over peacekeeping duties in Bosnia. No U.S. combat troops
remain in Bosnia. About 16,000 troops remain in Kosovo as part of KFOR,
including 1,600 U.S. soldiers.
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 status, conditioning some U.S. aid to Serbia on cooperation
with the International Criminal Tribunal for the Former Yugoslavia, and supporting
NATO membership for the countries of the region. The second session of the 110th
Congress may consider legislation on these topics.

Contents
Introduction: The Role of the Balkans in U.S. Foreign Policy . . . . . . . . . . . . . . . 1
Current Challenges in the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Impact of Kosovo’s Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Establishing Democracy and the Rule of Law . . . . . . . . . . . . . . . . . . . . . . . 2
Economic Reform and Improving Living Standards
. . . . . . . . . . . . . . . . . . 3
U.S. Policy Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Creating Self-Sustaining Stability in the Balkans . . . . . . . . . . . . . . . . . . . . . 4
Filling a Possible Security Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Restructuring the International Role in the Region . . . . . . . . . . . . . . . . 6
U.S. and International Aid in the Balkans . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EU Aid to the Balkans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The War on Terrorism and the Balkans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Role of Congress in U.S. Balkans Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Future of the Balkans
and U.S. Policy Concerns
Introduction: The Role of the Balkans
in U.S. Foreign Policy
The United States and the international community have achieved substantial
successes in the Balkans since the 1990s. The wars in the former Yugoslavia ended,
and all of the countries are undertaking political and economic reforms and orienting
their foreign policies toward Euro-Atlantic institutions. Administration officials 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.
For more than a decade, the United States has provided significant aid and troop
deployments to the Balkans in support of this goal. Both aid amounts and the U.S.
troop commitments have declined as the region has stabilized and more pressing U.S.
foreign policy priorities have emerged. At the same time, the European Union has
increased its role, with the ultimate goal of extending EU membership to the
countries of the region. However, analysts believe the United States still may have
an important role to play in the Balkans. Observers note that the United States has
political credibility in the region, particularly among Bosniaks and Albanians, which
the Europeans may lack. In addition, the region may have a higher strategic profile
given the establishment of U.S. military bases in Romania and Bulgaria, which could
be useful for U.S. operations in the Middle East. Continued U.S. attention may also
be needed to uproot possible terrorist networks in the region.
Current Challenges in the Region
Impact of Kosovo’s Independence
On February 17, 2008, Serbia’s Kosovo province declared its independence. The
United States and at least 20 of the 27 European Union countries (including key
states such as Britain, France, Germany, and Italy) have recognized Kosovo as an
independent state. In all, at least 41 countries have recognized Kosovo so far.
Serbia, which considers Kosovo as part of its territory, sharply condemned the move,
and declared it to be null and void. Belgrade downgraded diplomatic relations with
the United States and other countries that have recognized Kosovo. Serbia has been
joined in its opposition by Russia and at least five EU countries (Spain, Greece,
Cyprus, Romania and Slovakia, which have ethnic minority concerns of their own,
and/or are traditional allies of Serbia).

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When it declared independence, Kosovo pledged to implement a status
settlement plan proposed by U.N. envoy Martti Ahtisaari. The plan calls for an
independent Kosovo to be supervised by the international community for an
undefined period.1 Kosovo would not be permitted to merge with another country
or part of another country. The document contains provisions aimed at safeguarding
the rights of ethnic Serbs and other minorities in Kosovo. Six Serbian-majority
municipalities would be given expanded powers over their own affairs. Local police
in these areas would reflect the ethnic composition of the locality. The judiciary and
central government would have to reflect the ethnic composition of Kosovo, and all
laws having a special impact on an ethnic minority could only be adopted by a
majority of that ethnic group’s representatives in parliament. International missions
led by the European Union would supervise Kosovo’s compliance with the Ahtisaari
plan.
Kosovo’s independence could lead to instability in the region. In February and
March 2008, Serbian mobs attacked U.N., EU, and Kosovo government property and
personnel in northern Kosovo. Many experts believe Serbia is aiming at a de facto
separation of the Serbian-dominated northern part of the province from the rest of
Kosovo. If there is large-scale violence between Serbs and Albanians in Kosovo,
large numbers of Serbs could leave the province, particularly those living in isolated
enclaves in the southern part of Kosovo. Some believe that Serbs in Bosnia and
Albanians in southern Serbia and Macedonia could see Kosovo independence as a
precedent for possible secession efforts of their own.2
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,
although some problems with elections still need to be addressed. Civil society
groups and independent media express a wide variety of views, but sometimes face
pressure from government authorities. The countries in the region have undertaken
efforts to redraw their constitutions along more democratic lines, but some
constitutional provisions in Serbia and other countries are still less than ideal.
Serious problems remain. The legitimacy of democratic institutions is
challenged by the weakness of government structures. The countries of the region
lack effective, depoliticized public administration. Progress toward the rule of law
is slow. The police and judicial systems in many countries are weak and often
politicized. Government corruption is a serious problem in all of the countries of the
region. Organized crime is a powerful force in the region and is often allied with key
politicians, police, and intelligence agency officials. Albania, Macedonia, and other
countries of the region have had problems in developing a stable, democratic political
culture. This has resulted in excessively sharp tension between political parties that
1 Ahtisaari’s report to Secretary General Ban Ki-Moon on the plan can be found at
[http://www.un.org/Docs/sc/unsc_presandsg_letters07.htm].
2 For more on Kosovo, see CRS Report RL31053, Kosovo and U.S. Policy: Background and
Current Issues
, by Julie Kim and Steven Woehrel, and CRS Report RS21721, Kosovo’s
Independence and U.S. Policy
, by Steven Woehrel.

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has at times hindered effective governance. Relatedly, ethnic tension remains a
serious problem in many countries of the region, particularly in Bosnia, Kosovo, and
Macedonia.
Although the international community has provided large amounts of aid and
advice to strengthen local institutions and the rule of law, it may 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, but have faced resistance and
obstruction, mainly from the Bosnian Serbs.3 In both Bosnia and Kosovo,
international officials frequently 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.
Economic Reform and Improving Living Standards
The economies of the region face the burden of a Communist legacy as well as
well as resistance to economic transparency by many 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 concern over the sanctity of contracts. In Bosnia, the lack of a strong
central government and the division of the country into two semi-autonomous
“entities” has hindered the development of a single market. Privatization in Kosovo
has been slowed by uncertainty over ownership of assets, which was a reflection of
uncertainty over the province’s status.
Substantial progress has been made in economic reforms in many countries.
Fiscal and monetary austerity, with the assistance of international financial
institutions, has permitted many countries to avoid hyperinflation and stabilize their
currencies. The countries of the region have embarked on the privatization of their
industries. However, the process remains incomplete and there have been concerns
within these countries and among foreign investors about corruption and a lack of
transparency in some deals. High unemployment and poverty are serious problems
in all of the countries of the region.
In recent years, the countries of the region have experienced substantial
economic growth and increases in real wages. They have also have attracted
increasing foreign investment, although totals remain low when compared to those
of central European countries that joined the EU in 2004. Croatia has been
particularly successful in economic reform and in attracting foreign investment, and
expects to join the EU in 2011. Indeed, in per capital income, structural reforms, and
3 For more information, see CRS Report RS22324, Bosnia: Overview of Current Issues, by
Julie Kim.

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foreign direct investment, Croatia has already surpassed several current EU member
states, particularly Romania and Bulgaria.
Although positive signs have emerged in recent years, the economic challenges
faced by the countries of the region mean that many years could be required before
the poorer countries even approach average EU living standards. As in the case of
political reform, which is closely linked to successful economic reform, a long-term
international commitment of aid, advice, and the prospect of EU membership may
be required to build and maintain a local consensus for often painful measures.
U.S. Policy Concerns
Creating Self-Sustaining Stability in the Balkans
The main 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.
Since taking office in 2001, the Bush Administration has maintained the
position that the U.S. peacekeeping forces went into the Balkans with the Europeans
and would leave together with them. Nevertheless, as the situation in the region has
stabilized, the United States and its allies have withdrawn troops from the region.
Currently, about 1,600 U.S. troops are deployed in Kosovo. 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
throughout the U.S. military, including in the Army Reserve and National Guard
units that now play a key role in the U.S. deployment in Kosovo.
In December 2004, the mission of SFOR, the NATO-led peacekeeping force in
Bosnia, came to an end. Peacekeeping duties were handed over to a European Union
force (EUFOR), now composed of about 2,500 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. No U.S. combat troops remain in Bosnia.4
Currently, there are about 16,000 NATO-led troops in KFOR in Kosovo, including
the U.S. contingent.
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
4 For more information, see CRS Report RS21774, Bosnia and the European Union Military
Force (EUFOR): Post-NATO Peacekeeping
, by Julie Kim.

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as military forces are withdrawn. 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. In Bosnia, an EU Police Mission monitors, inspects, and provides
advice to promote multi-ethnic, professional police forces that act according to
European standards. The Office of the High Representative (OHR), the leading
international civilian body in Bosnia, has attempted to increase central government
control over the police, reducing the role of the semi-autonomous “entities” within
Bosnia. The United States and the EU believe such a move would make the police
more efficient and effective, and increase Bosnia’s unity. However, progress toward
this goal has been slow, due to strong resistance from the Republika Srpska, the
largely Serb entity. RS leaders see the police as a key bulwark of their power and do
not want give up control over it. Police reforms passed by the Bosnian parliament
in April 2008 were considerably weaker than those originally urged by the
international community.
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
stop the destruction and looting of property. Some KFOR units reportedly failed
even to protect Serb civilians and U.N. police from violence.5 KFOR officers have
said the Alliance has taken steps to deal with these problems, including by supplying
its forces with non-lethal riot control equipment, establishing clearer lines of
authority, and consistent rules of engagement.
KFOR and CIVPOL performed better during the violence in Mitrovica in
northern Kosovo on March 17, 2008. U.N. police stormed a courthouse occupied by
Serbian protestors. The police and KFOR stood their ground as rioters attacked them
with rocks, Molotov cocktails, automatic weapons, and grenades. One U.N.
policeman was killed, and more than 60 U.N. police and about 30 KFOR troops were
hurt, as were 70 rioters. Further violence may occur in Kosovo as a result of
provocations by the Serbian government and/or Serbian extremists, or by ethnic
Albanians. Uncertainty over the jurisdictions of the UN police and EULEX, the EU-
led rule-of-law mission in Kosovo that is currently deploying may exacerbate
possible security problems.
EUFOR and KFOR have also played important roles in overseeing the military
forces of Bosnia and Kosovo. EUFOR inspects military arsenals in Bosnia. NATO
and the Office of the High Representative have worked together to reform the two
Bosnian entity armies and reduce them in size. These reforms include the unification
of Bosnia’s armies under a single command structure, including a Minister of
Defense and Chief of Staff. However, although Bosnia now nominally has a unified
armed forces, military units are not integrated at lower levels.
5 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?].

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KFOR’s presence deters possible Serbian aggression or military provocations
against Kosovo, although an invasion of Kosovo by Serbian troops appears unlikely.
Nevertheless, KFOR has already been deployed to deal with violence in such
flashpoints as the divided town of Mitrovica in northern Kosovo, and may face
similar or greater challenges in the future. KFOR will also oversee the establishment
of Kosovo’s new army, the Kosovo Security Force, as foreseen by the Ahtisaari plan.
Given these concerns, the presence of KFOR will be needed for some time, although
the mission may eventually be turned over to the EU and all U.S. combat troops
withdrawn, as in Bosnia, if Kosovo stabilizes and Serbia is viewed as not posing a
military threat to an independent Kosovo.

Restructuring the International Role in the Region. Another issue,
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
(the Office of the High Representative in Bosnia, the U.N. Mission in Kosovo)
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.
European Union. At the June 2003 Thessaloniki EU summit with the
countries of the Western Balkans, EU leaders recognized the countries of the region
as prospective EU members. The EU has granted EU membership candidate status
to Croatia and Macedonia. Croatia has made good progress in its membership
negotiations, and hopes to join the EU in 2011. The EU has recognized Macedonia
as a membership candidate, but has not started formal talks with Skopje, due to
concerns about the pace of reforms there. The EU has concluded Stabilization and
Association agreements (SAA) with the other countries in the region. The SAA
provides trade concessions, aid, and advice aimed at accelerating reforms and
integrating the recipients more closely with the EU, with the goal of eventual EU
membership. Albania signed an SAA in 2006, but the EU has refrained from starting
membership negotiations with Tirana, due to uneven implementation of reforms.
Montenegro signed an SAA in 2007.
The EU signed an SAA with Serbia on April 29, 2008. The move appeared to
be aimed at strengthening the hand of pro-Europe forces in Serbia’s May 2008
parliamentary elections. However, at the insistence of the Netherlands and Belgium,
the agreement will not be implemented until all EU countries agree that Serbia is
cooperating with the International Criminal Tribunal for the former Yugoslavia
(ICTY). Another obstacle to closer ties with the EU may be Serbia’s anger at the
recognition of Kosovo’s independence, especially if an ultranationalist government
takes power in Belgrade.
After the Bosnian parliament approved police reform legislation in April 2008,
the EU announced that it would sign an SAA with Bosnia on June 16, 2008. The
move was a softening of the EU’s prior approach, as the police reform was a watered-
down version of previous proposals and other EU conditions appear to have been
dropped or postponed. Like the EU’s decision to grant an SAA to Serbia, the signing

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of an SAA with Bosnia may have been intended to stabilize the region in the wake
of Kosovo’s independence.
Before Kosovo became independent, it participated in an SAA “tracking
mechanism” that provides it with advice and support, with the aim of bringing
Kosovo closer to the EU. Now that Kosovo is independent, it may be considered for
a Stabilization and Association Agreement. However, a lack of consensus within the
EU on Kosovo’s recognition, as well as Kosovo’s institutional weakness may slow
this process.
NATO. NATO’s future role in the region will take place in part through the
Partnership for Peace (PFP) program, which promotes the reform of the armed forces
of these countries and their interoperability with NATO. In addition, the
Membership Action Plan (MAP) process prepares selected PFP members for possible
future NATO membership by providing them with detailed guidance on improving
their qualifications. MAP participants Albania and Croatia were invited to join
NATO at the Alliance’s summit in Bucharest in April 2008. A membership
invitation to Macedonia, also a MAP country, was withheld due to an ongoing
dispute with Greece over the country’s name. NATO countries pledged to admit
Macedonia to the Alliance once the name issue is resolved.
Serbia and Bosnia and Herzegovina were long excluded from PFP due to their
failure to cooperate with the International Criminal Tribunal for the former
Yugoslavia (ICTY). However, in what many experts viewed as an unexpected
reversal of policy, they were permitted to join PFP by NATO in December 2006.
This may have been done for the same reasons that motivated the EU to sign SAAs
with these countries in 2008 – to bring them closer to Euro-Atlantic institutions as
Kosovo’s status was close to resolution and in order to encourage further reform.
In the case of Serbia, both moves may have also been timed to assist pro-Western
parties in upcoming elections. Montenegro is also a PFP participant.
At the April 2008 NATO summit, Bosnia and Montenegro were offered an
“Intensified Dialogue,” a step toward Membership Action Plan status. The Alliance
said it would consider Serbia for an “Intensified Dialogue,” if it requests one.
However, Serbia’s interest in NATO membership appears to have waned in the wake
of the recognition of Kosovo’s independence. As an independent state, Kosovo will
set up its own armed forces under KFOR tutelage. Kosovo may join PFP in the
future, but this decision could be subject to disagreement within NATO over
recognition of Kosovo’s independence.
International Supervisory Bodies in Bosnia and Kosovo. The Office
of the High Representative (OHR) in Bosnia may be eliminated by the end of 2008,
if the country makes sufficient progress on a package of reforms and conditions that
has been outlined by the international community. After OHR’s departure, an EU
Special Representative will remain but will not have powers to impose legislation
and dismiss officials as OHR had. OHR has used these “Bonn powers” powers more
sparingly in recent years. Nevertheless, it remains to be seen if aid conditionality and
the distant prospect of EU membership will be sufficient to move the reform process
forward in Bosnia.

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After Kosovo declared independence in February 2008, the European Union
began to deploy an International Civilian Office (ICO), which would oversee
Kosovo’s implementation of the Ahtisaari plan. The role and powers of the ICO
appear to be modeled on those of OHR in Bosnia. The head of the Office, the
International Civilian Representative (ICR) was chosen by an international steering
group of key countries. The ICR also serves as EU Representative in Kosovo. An
American serves as his deputy. The ICR is the final authority on the implementation
of the settlement, and would have the power to void any decisions or laws he deems
to be in violation of the settlement, as well as the power to remove Kosovo
government officials who act in a way that is inconsistent with the settlement. The
ICR’s mandate will last until the international steering group determines that Kosovo
has implemented the settlement. The first review of settlement implementation will
take place after two years. The ICR is expected to be operational on June 15, 2008.
A mission under the EU’s European Security and Defense Policy (ESDP),
dubbed EULEX, will monitor and advise the Kosovo government on all issues
related to the rule of law, specifically the police, courts, customs officials, and
prisons. It would also have the ability to assume “limited executive powers” to
ensure that these institutions work properly. EULEX is currently only partly
deployed.
It is unclear how these EU-led missions will relate to the U.N. Mission in
Kosovo (UNMIK). The Ahtisaari plan foresees the withdrawal of UNMIK 120 days
after the EU deployment begins. However, as the Ahtisaari plan was not adopted by
the U.N. Security Council, UNMIK appears to have no legal basis for withdrawing.
This situation could lead to a conflict over the jurisdictions of the EU and U.N.
missions. However, as a practical matter, UNMIK may eventually be shouldered
aside as cooperation between the EU missions and the Kosovo government increases.
In such a case, the U.N. Secretary General may decide to “reconfigure” the UN
mission, reducing it in size. Another concern is that Serbia and many Kosovo Serbs
reject the EU-led missions, but still support UNMIK. The Serbs may cooperate with
UNMIK in Serb-dominated northern Kosovo, but reject, perhaps violently, efforts of
the EU-led missions to extend their authority there.
War Crimes Prosecutions. Responsibilities for prosecuting most war
crimes in the region is shifting from the ICTY to local courts. U.S. and international
officials have worked with local leaders and the ICTY to create a war crimes
chamber to try lower-level war crimes suspects within Bosnia. The United States and
other countries also assisted Serbia’s efforts to set up its own war crimes court.
However, the two most notorious ICTY indictees, former Bosnian Serb leader
Radovan Karadzic and former Bosnian Serb army chief Ratko Mladic have not been
turned over to the Tribunal. In addition to Karadzic and Mladic, two other ICTY
indictees are at large, both Serbs. U.N. Security Council Resolution 1503 calls for
the ICTY to complete its trials by 2008 and all appeals by 2010. This could create
a situation where Serbia and Bosnia could “run out the clock” on cooperation with
the ICTY, if the completion strategy laid out in UNSC Res. 1503 remains in place.
U.S. Role. 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,

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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 the region’s
stability in the wake of Kosovo’s independence.
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 in the account for political and economic reform in eastern Europe
(which now almost exclusively focuses on Balkan countries) fell from $621 million
in FY2002 to just under $296 million in FY2008. For FY2009, the Administration
requested $275.6 million for political and economic aid to the region.
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. For
example, Croatia graduated from SEED assistance at the end of FY2006. In addition
to SEED funding, all of the countries of the region receive a few million dollars each
year in military aid to help their military reform and NATO integration efforts.
EU Aid to the Balkans. 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. Some U.S. and
European experts criticized what they view as a lack of vision by the EU in its policy
toward the region. Under its Community Assistance for Reconstruction,
Development, and Stabilisation (CARDS) aid program for the region, the EU allotted
4.65 billion euros ($5.6 billion) from 2000-2006.6
6 CARDS f i n a n c i a l s t a t i s t i c s a t t h e E u r opean Uni on websi t e
[http://ec.europa.eu/enlargement/how-does-it-work/financial-assistance/cards/statistics20
00-2006_en.htm].

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Skeptics of EU policy said this level of resources appeared at odds with
commitments made at the June 2003 Thessaloniki EU summit, when EU leaders
recognized the countries of the region as prospective EU members. Critics pointed
to generous EU pre-accession aid given to Central European countries and to
neighboring Bulgaria and Romania as a model, saying more extensive aid would help
the Balkan countries restructure their economies and legal systems more quickly to
meet EU conditions for membership, while bringing local living standards somewhat
closer to EU standards.7 The EU has taken steps that appear to be aimed at dealing
with these problems. CARDS has been folded into the Instrument for Pre-Accession
Assistance (IPA), which helps all countries seeking EU membership. The EU has
allocated 11.47 billion euros (over $17.81 billion) for the IPA for 2007-2013.
The prospects for Balkan countries to join the EU are clouded by public
skepticism in wealthy EU member states about the benefits of further enlargement.
While Croatia may join the EU as early as 2011, it may take much longer for other
countries to gain membership, given their current poverty and need for further
progress on reforms.8
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 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 play a greater role
in terrorist plans than in the past.9
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
7 Discussions with U.S. and European Balkans experts.
8 For more information on EU enlargement policies, see the EU Commission’s Enlargement
website at [http://ec.europa.eu/enlargement/index_en.htm].
9 Rade Maroevic and Daniel Williams, “Terrorist Cells Find Foothold in the Balkans,”
Washington Post, December 1, 2005, p. 16.

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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 presence of U.S. troops in Kosovo and intelligence personnel in Bosnia.
The United States also 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 export control regimes in the region, 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.10
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.
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 pressing 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.
10 For more information on terrorism in the Balkans, see CRS Report RL33012, Islamic
Terrorism and the Balkans
, by Steven Woehrel.

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aid and troop contributions in Bosnia and Kosovo were 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 at times moderated 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 FY2001, Congress has included provisions in foreign operations
appropriations bills that attached conditions on some U.S. aid to Serbia’s central
government, requiring cooperation with the war crimes tribunal, ending support to
Bosnian Serb structures, and respect for minority rights. It can be argued that these
provisions were a key catalyst for former Serbian leader Slobodan Milosevic’s
transfer to the tribunal 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 2003.11 Four major indicted war criminals remain at large,
including former Bosnian Serb leader Radovan Karadzic and former Bosnian Serb
army chief Ratko Mladic. Congress may consider similar aid conditions in the
FY2009 foreign operations appropriations 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
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 also took 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. An identical House resolution was
introduced on December 17, 2005 (H.Res. 634).
11 For more information, see CRS Report RS21686, Conditions on U.S. Aid to Serbia, by
Steven Woehrel.

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Legislation on Kosovo’s status has been introduced in the 110th Congress. On
January 5, 2007, Representative Lantos introduced H.Res. 36, which calls on the
United States to express its support for Kosovo’s independence. On March 29, 2007,
Senator Lieberman introduced S.Res. 135, which expresses the sense of the Senate
that the United States should support Kosovo’s independence. It says that if the U.N.
Security Council does not pass a resolution supporting the Ahtisaari proposal in a
timely fashion, the United States and like-minded countries should recognize
Kosovo’s independence on their own. A companion House measure, H.Res. 309,
was introduced by Representative Engel on April 17. On May 24, Representative
Bean introduced H.Res. 445, which expresses the sense of the House that the United
States should reject an imposed solution on Kosovo’s status and not take any
unilateral steps to recognize Kosovo’s independence. The second session of the 110th
Congress may also consider legislation on Kosovo’s post-status development.
Congress has supported NATO enlargement into the Balkan region. In March
2007, Congress approved the NATO Freedom Consolidation Act (P.L. 110-17). The
legislation offered support for the NATO membership aspirations of Albania,
Croatia, and Macedonia, and designated them as eligible for U.S. military aid under
terms of the NATO Participation Act of 1994 (P.L. 103-447). On May 19, 2008, the
Senate passed S.Res. 570, which congratulated Albania and Croatia on the invitations
they received to join NATO at the Alliance’s April 2008 summit, as well as
invitations to Bosnia, Montenegro, and Serbia to have an Intensified Dialogue with
NATO.