News Release No. 99/2183/ECA World Bank Contact: Gina Ciagne (202) 458-4166
European Commission Contact: Patrick Child (32-2) 296-9750

EU AND WORLD BANK PLAN ECONOMIC HELP FOR BALKANS

The EU and the World Bank said today they had agreed a framework plan to coordinate international support for Balkan economies hit by the war in Kosovo, Reuters reports. World Bank President James Wolfensohn and acting European Commissioner Yves-Thibault de Silguy told a press conference in London there was still no clear idea of the amount of funds needed to stabilize Albania, Macedonia, Montenegro, and Kosovo. But Wolfensohn said talk of an economic package along the lines of the Marshall Plan used to rebuild Europe after World War II was overdone.

Some of the issues will be resolved at a meeting of potential donor countries and institutions on May 27 in Bonn, Wolfensohn said. "We hope to have an assessment of what is needed for the adjacent states [to Yugoslavia] and get an assessment of what our members, including the Americans, will do," Wolfensohn is quoted as saying. 

There were no plans for a reconstruction bank for the Balkans, he said. Both the EU and the Bank said Serbia would be eligible for funding, provided a settlement was reached in Kosovo. "It is open," Silguy said when asked about Serbia.

Both bodies stressed that the process of financial help was separate from the diplomatic process to resolve the conflict.

The Bank and the EU will set up a joint office in Brussels within a month to coordinate aid for countries affected by the Kosovo crisis, Agence France-Presse reports Wolfensohn said in Paris yesterday. Wolfensohn said they could not immediately establish an office in the Balkan region itself because of logistical problems. "The biggest problem is transport...how to locate [the office] with convenient transportation and convenient Internet connections. Clearly, we will have to have something in the area" but in the meantime an office can be established quickly in Brussels, he said.

A meeting of 40 countries and international organizations in Washington last month asked the World Bank and the EU to take responsibility for coordinating aid to countries whose economies have been disrupted by the Kosovo crisis, as they had already performed a similar role for Bosnia, the story notes. A study prepared for the meeting by the IMF and World Bank estimated neighboring countries would need up to $1.8 billion in economic aid this year alone, but officials said at the time the figures were already outdated. Wolfensohn said yesterday that "the numbers are all over the place" and it was very difficult to make any kind of reliable assessment of the likely amount needed.

The news comes as Hufvudstadsbladet (Finland) reports that German Minister of Finance Hans Eichel said the costs for the reconstruction of the Balkans would not do any serious damage to the economies of the EU or the rest of Europe. "The effects will mostly show in countries in the immediate vicinity, and when the conflict is over we will need a reconstruction program for the whole region, not just Kosovo", he is quoted as saying. 

The piece reports that the G7 has agreed the program will be led by the World Bank in collaboration with the European Commission, but many other international financiers will participate. Finnish Minister of Finance Sauli Niinistö is quoted as saying he hopes for a quick end to the conflict so that the reconstruction efforts can start during the Finnish EU-presidency.

Meanwhile, UN High Commissioner for Human Rights Mary Robinson, ending a three-day visit to the Balkans, said yesterday that the focus of her trip was on "the seriousness of the catastrophe from the humanitarian point of view, but also from the human rights point of view" of the situation in Kosovo. A meeting of heads of UN agencies and programs, the World Bank, and the ICRC on the Kosovo crisis in Geneva tomorrow and Friday would focus on the Kosovo crisis, humanitarian and human rights issues, and the impact of the crisis on the region, Robinson said.

In other news from the Balkans, Macedonian Foreign Minister Aleksandar Dimitrov said yesterday his impoverished country was not getting enough help from aid organizations in dealing with an influx of ethnic Albanians refugees, saying the UNHCR was particularly bureaucratic, reports Reuters.

Earlier this month, the story notes, Macedonia won a pledge of $252 million from international donors after an emergency meeting in Paris of World Bank and European officials. The Bank said donors hoped to come up with further pledges later this year which would cover the remainder of Macedonia's estimated emergency financing needs of around $400 million, but Macedonian officials yesterday complained they had received very little cash aid to deal with the huge refugee crisis, saying they had so far got mostly food.