Greek plan for Balkan reconstruction aid is revived after long impasse

Priority given to road link to Central Europe while Foreign Ministry tidies up loose ends

By Costis Papadimitriou - Kathimerini

Deputy Foreign Minister Evripidis Stylianidis announced the reactivation of the Greek Plan for Balkan Economic Reconstruction (ESOEAB) during his visit to Belgrade this week, starting with the segment involving Serbia and Montenegro and Axis 10, Greece’s road link with Central Europe.

He also raised issues for Greek business — mostly problems relating to local red tape — for which he received “promises at high level for one-by-one solutions,” as he stressed. Officials of Greek firms appeared satisfied with both moves.

Axis 10 is a road artery linking Central with Southeastern Europe, running from Salzburg, Austria to Thessaloniki for about 2,360 kilometers and then through Croatia, Serbia and Montenegro and the Former Yugoslav Republic of Macedonia (FYROM). About 800km of the project are in Serbia-Montenegro. Work on the Nis-Belgrade-Salzburg connection is proceeding quickly. In contrast, the section from the southern Serb city of Nis to FYROM — which is perhaps of greater interest to Greece than to Serbia — is progressing slowly. ESOEAB is budgeted at about 550 million euros for six Balkan countries — Serbia-Montenegro, FYROM, Romania, Bulgaria, Albania and Bosnia-Herzegovina. It considered a strong tool for upgrading the existing road infrastructure.

“The investment promises a full return,” Stylianidis said, explaining that the size of the Greek funding of Axis 10 will be determined after a comprehensive study on the total cost and the size of the participations of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).

Until recently, Serb officials expressed dissatisfaction with the fact that they had received no answer from the Greek side after submitting, in January 2004, all relevant studies, including those concerning the protection of the environment and antiquities. Greek sources now say the studies have been returned with recommendations for improvements so that the process may be expedited.

However, ESOEAB’s problems extend to the whole program, concerning all six recipient countries. This paper pointed out three weeks ago that the plan — an inspired move but very badly planned initially — was at risk of discrediting rather than crediting the country. It was designed in 2002 as a first important step toward the fulfillment of Greece’s obligations as a wealthy aid donor country but the hasty preparation and the size of the plan led to immobilization. A spate of proposals were submitted by the recipient countries but most lacked quality. Almost half of the money has been earmarked for Serbia-Montenegro. Only 2.5 percent of the large projects segment has been implemented for all countries while most of the duration of the program has already run.

Nevertheless, an important effort seem to have got under way to cover lost time and rectify intrinsic lags.

“Five important progress steps have been taken in the 12 months,” said Argyro Eleftheriadou, formerly of EIB and now an advisor to Stylianidis. “First, a small group of experts has been formed for the technical and financial appraisal of the projects. Second, cooperation has improved at bilateral level with each country at both political and technocratic levels. Third, the setting up of a special account in the Finance Ministry where funds are credited, fourth, emphasis has been given on projects improving Greece’s image — hospitals, public and heritage buildings, schools and road and rail axes. And, fifth, securing financial help from international organizations such as EIB and EBRD.”

Sources said the Foreign Ministry is encouraging the participation of Greek companies in the projects, more of which will be announced soon.