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EU to Cap Decade of Eastern Expansion by Adding Croatia

Photographer: Simon Dawson/Bloomberg

The European Union flag, left, and Croatian national flag fly from the Croatian state parliament building in Zagreb. Close

The European Union flag, left, and Croatian national flag fly from the Croatian state... Read More

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Photographer: Simon Dawson/Bloomberg

The European Union flag, left, and Croatian national flag fly from the Croatian state parliament building in Zagreb.

The European Union is set to cap nine years of eastern expansion with the July 1 addition of Croatia, which may prove to be the last ex-communist country to join the world’s largest trading bloc this decade.

With Croatia, the European Union will have added 11 nations once under communist regimes with more than 100 million people and a combined $1.4 trillion in economic output. After the entry, 45 million Balkan residents, including Greeks and Slovenians, will live under the blue-and-gold flag, leaving Albania and the rest of the former Yugoslavia outsiders on the peninsula. With the addition of Croatia, the EU will have 28 members.

The region remains peppered with potential flashpoints from Kosovo to Bosnia following the 1990s Balkan civil wars, Europe’s bloodiest conflict since World War II. The global crisis has hurt efforts to rebuild political and economic life and may delay further EU expansion by at least seven years, says Tvrtko Jakovina, a history professor at the University of Zagreb.

“None of these countries, including the candidate country Montenegro, as well as Serbia, will join before 2020,” Jakovina said in a telephone interview yesterday. That’s “primarily because they are unlikely to finish the talks before that date - - and also because there is a lack of enthusiasm for enlargement in the EU.”

Photographer: Simon Dawson/Bloomberg

A worker carries a European Union flag after it was removed from its flagpole in Zagreb. Close

A worker carries a European Union flag after it was removed from its flagpole in Zagreb.

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Photographer: Simon Dawson/Bloomberg

A worker carries a European Union flag after it was removed from its flagpole in Zagreb.

Starting Date

Serbia, Croatia’s former foe, became a candidate for EU membership in March 2012. In a concession to Serbia, the leaders said membership talks will start by January 2014 and the exact date may be set as soon as October instead of waiting until the EU’s December summit, the bloc’s president, Herman Van Rompuy, said today as EU leaders ended a two-day summit in Brussels.

It took Croatia almost eight years from the start of negotiations to achieve entry and Serbia’s talks will have to resolve issues including the status of Kosovo, its former province recognized as an independent state by 22 EU countries plus Croatia.

“This afternoon or tonight, I expect to know exactly what’s written and who requested what,” Serbian President Tomislav Nikolic was cited by Beta news agency in Belgrade as saying in response to the EU decision.

While getting a date is “good news” for Serbia, the country won’t be able to join until its relations with Kosovo are “normalized,” said Timothy Ash, an emerging-market economist at Standard Bank Plc in London.

‘Conditions’

Kosovo and the Serbian autonomous area of Bosnia may “show up as one of the conditions in the negotiating process, considering that Germany wants Kosovo to be included in some of the chapters to be negotiated,” Predrag Simic, a political analyst in Belgrade, said in a telephone interview yesterday.

Wedged between Croatia and Serbia, Bosnia-Herzegovina, divided politically into Serb, Croat and Bosnian Muslims, has been under international peacekeeping supervision since a U.S.- brokered peace agreement in 1995 ended a four-year war. Further southeast, Macedonia’s quest for EU membership stalled amid objections about the country’s name from Greece.

“EU membership and even EU talks bring, if not some great economic progress under current circumstances, then they bring order, and that’s a good thing for the western Balkans,” Jakovina said, adding that Croatia has carried out “almost all” its overhaul projects under pressure from the EU.

Changed Club

The trading bloc, grappling with the euro region’s debt crisis and rocked by anti-austerity movements undermining stability is also radically different from the rich-nation club Croatia started negotiating with in 2005.

As European leaders turn inward to find solutions for the economic and political issues, nations beyond the EU’s borders are facing the reality of expansion being put on a back burner.

Ukraine is caught in a struggle for control with Russia, which pulls the levers through energy ties, while a trade agreement with the EU is being held up by the 2011 imprisonment of ex-Prime Minister Yulia Tymoshenko for abuse of office, a move the bloc deems selective justice.

EU governments on June 25 postponed the resumption of Turkey’s membership talks by at least four months, protesting Prime Minister Recep Tayyip Erdogan’s heavy-handed treatment of peaceful dissenters.

For Albania, the European Commission last year recommended making candidate status subject to completion of “key measures” in judicial and public administration and the revision of parliamentary rules.

“Croatia has been fortunate” with the timing of its entry talks, Standard’s Ash said by phone yesterday. “Germany is now very cautious on enlargement and it’s going to be a lot more difficult for new entrants.”

To contact the reporters on this story: Jasmina Kuzmanovic in Zagreb at jkuzmanovic@bloomberg.net; Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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