Journal of Political Risk, Vol. 2, No. 4, April 2014.

Raquel Montes Torralba
Foreign Affairs Analyst

With Serbia seeking to join the European Union (EU), as did Croatia in July 2013, European officials have advanced a pre-condition to be resolution of major disputes with Kosovo. In April 2014, Serbia and Kosovo celebrate the first anniversary of an agreement meant to normalize relations. Positive developments include the March 2014 election of a pro-EU majority in Serbia’s parliament, local elections in North Kosovo held in a generally peaceful manner, as well as progress on technical issues such as border control and police transfer. Nevertheless, the political context for 2014 could be derailed by upcoming general elections in Kosovo, the creation of a Kosovo Army, and establishment of a war crimes court for Kosovo’s ethnic Albanian rebels. More particularly, all these factors could impact the creation of a Community of Serb Municipalities, the keystone of the Serbia-Kosovo Agreement.

Early Elections in Serbia

2014 is an electoral year both in Serbia and Kosovo. In the case of Serbia, early parliamentary elections took place on March 16, and were justified by the Serbian government as a necessary means of legitimizing new and further reforms.

After the Serbian Progressive Party (SNS) came to power in 2012, they immediately announced a broad program of reform.  The objective of the new agenda was twofold: to bring Serbia out of its critical economic situation –which began two decades ago with the war in former Yugoslavia – and to progress towards unification with the EU. Since these two objectives were closely related and Serbia’s main obstacle to initiate accession negotiations with the EU was its frozen conflict related to the status of Kosovo, Serbia´s new government decided to normalize relations with Kosovo. Thus, Belgrade and Prishtina brokered an agreement in April 2013, by which Serbia committed to dismantle remaining government structures in northern Kosovo in exchange for the creation of a self-governing structure comprising Kosovo´s municipalities in which Serbs are the majority. This new structure – now in the center of negotiations — has been called the Association or Community of Serbian Municipalities (hereafter The Community).

Diplomatic benefits to Serbia did not trail far behind: the first accession talks between the EU and Serbia took place on January 21, 2014. The ruling Serbian Progressive Party (SNS) especially benefited from subtle political maneuvering in the form of early parliamentary elections held in March. As anticipated, SNS won a wide victory. They garnered 158 of 250 seats in Parliament. The strongest man in the government, Aleksandar Vučić, will likely become prime minister.

Aleksandar Vučić (First Deputy Prime Minister during the last parliamentary term) is seen by the international community as strongly supporting EU membership and dialogue with Prishtina. Two of the main effects of these elections are, first, to provide wider and sounder support for the pro-European sector of government led by Vučić and, secondly, to provide additional legitimacy to the Serbian government to maneuver in negotiations regarding Kosovo. Additionally, traditional nationalist parties, such as the Democratic Party of Serbia (DSS) and Radical Party (SRS), both opposed to EU integration and dialogue with Prishtina, did not even reach the 5% threshold to have parliamentary representation. This demonstrates clear pro-EU sentiment from voters.

Even if it seems that no big changes should be expected concerning Serbia’s pro-EU position, there is a possible source of instability that could negatively impact the Kosovo talks. The goal of the SNS is to carry out a reform process oriented toward establishing a full market economy and fight against corruption. In particular, reformation of state-owned enterprises, which annually represent an unsustainable source of loss for the Serbian economy,[1] exists as one of SNS’s most urgent tasks.  This sector, however, is also responsible for about 15% of formal employment.[2] Any initiative aimed at re-structuring it should be expected to encounter resistance, especially during a severe economic crisis with high unemployment (which reached 20% in January 2014). In order to implement  market and counter-corruption reforms, the Serbian government has started to deploy a heavy-handed approach, making many political enemies. Vučić, the expected new prime minister, has been referred to by some in the opposition as a “dictator”, and many doubt whether it is possible for the SNS and its leaders, who came from the Milošević-era, to honestly undertake the necessary reforms.

The months ahead will be extremely important for the new government and its capacity to undertake reforms promised to the electorate and, of equal importance, to the international community. If these unpopular reforms are finally implemented and not matched by measures to compensate unemployment and its negative impact on citizens, popular support may be undermined, resulting in a rise in instability. The recent wave of unrest in Bosnia (February 2014) was a direct result of corruption and economic malaise. This unrest saw Bosnian citizens taking to the streets in protest of the privatization process, but were halted by fear among a population haunted by memories of instability and war in the 1990s. This situation is not exclusive to Bosnia, but a common feeling spread over a region which is still waiting for an improvement to its political and economic conditions.  If unrest spread in Serbia, Kosovo could be used by the Serbian government as a smokescreen or, by opposition parties, as a rhetorical weapon to regain parliament.

Kosovo General Elections

In contrast to the Serbian situation, parliamentary elections in Kosovo, which should take place this summer or fall, could destabilize the coalition in power and weaken the pro-dialogue position held thus far by Kosovo´s government. First of all, there is still a high level of uncertainty about the electoral system through which the electoral process will be undertaken. After elections fraught with irregularities in 2010, the main political parties in Kosovo agreed to reform the electoral system to cope with the main source of troubles. Hence, the Committee for Amending Electoral Law and its Election Reform Working Group identified five areas of intervention.[3] Among these, two main questions emerged due to their implication on the political participation of Serbs: the swift change from one single district to a multi-district system, and the question of minority seats allocation in the assembly. A single district avoids ethnic fragmentation within an electoral district and is preferred by minorities that can freely associate with other municipalities from the same minority group Kosovo-wide. Regarding minority seats allocation in the assembly, the Constitution of Kosovo set up a system with a two-term transitory period[4] designed to stimulate the participation of minority groups. Since the transition period ended, the forthcoming elections will be conducted under a system less advantageous to minorities. Still, given the level of dissension among political parties, no major decision has yet been taken.[5] Any decision at this level now could hurt the political dialogue between Serbia and Kosovo, since the primary focus is on participation of the Serbian minority in Kosovo.

Secondly, early parliamentary elections have been requested by one of the opposition leaders, Ramush Haradinaj (Alliance for the Future of Kosovo, AAK). This request followed the decision of some PDK members to leave the party. Haradinaj officially argued that the coalition for power[6] weakened and that with only 55 seats in the parliament out of 120, the government no longer has the legitimacy to rule Kosovo. In fact, the result of the municipal election held in October 2013, which increased the number of municipalities ruled by the main opposition party, the Democratic League of Kosovo (LDK), could have been a signal of political change. The Prime Minister Hashim Thaçi has ruled Kosovo since 2008, when the assembly unilaterally declared its independence from Serbia. He is a highly popular politician, known for having been a leader of the Kosovo Liberation Army. However, high unemployment (35%), negative economic indicators[7] and pervasive corruption are eroding popular support of the government. Additionally, the establishment of a process to normalize relations with Serbia, in which Prishtina has to concede a certain level of self-government to Kosovo Serbs in exchange of an (uncertain) recognition of independence by Serbi,a has fragmented public opinion and negatively impacted government. Prime Minister Thaçi is appreciated by the international community for his commitment to the process of dialogue with Serbia, but it is not apparent that he will be re-elected. If international pressure on this process (and more importantly, international economic support) makes the election of a political leader disaffected with Serbia-Kosovo dialogue very unlikely, the election campaign is an entirely different matter. The coming months could be decisive since both the government and opposition parties may find themselves tempted to use the Kosovo-Serb issue to attract votes, thus shattering progress towards normalization.

Finally, the results of local elections held in Kosovo in 2013 are warning signs of possible changes that could hamper the Serbia-Kosovo dialogue. More precisely, the victory of the Srpski list (the Belgrade-backed party) in nine of ten municipalities where Serbs are a majority raises concern among Kosovo Albanians as to possible radicalization of the Serbian minority in Kosovo[8]. This move is ambiguous enough to be seen as a way for Serbia to stimulate participation among Serbs in Kosovo (and doing so, accepting the authority of Prishtina), but, at the same time, a maneuver which will allow Serbia to keep their presence and “control” over Kosovo. As expected, this electoral result has fuelled harsh criticism of the government, which is seen by public opinion as unable to defend national interests.  By the same token, the intervention of the international community – especially the US and EU- is increasingly perceived as an obstacle for the future of Kosovo since it obliges Kosovo to make concessions to the demands of Serbia which seeks to protect the rights of Kosovo Serbs.

The Creation of the Kosovo Armed Force

In 2012, a Security Sector Strategic Review was established, in accordance with the Law on the Kosovo Security Force,[9] in order to re-evaluate the limits set to the Kosovo Security Force. After two years of work, just some months prior to the elections, this review displayed a comprehensive analysis of the entire security sector in Kosovo and suggested several proposals in order to enhance it. Among them were the 10-year transformation of the Kosovo Security Force into the Kosovo Armed Forces, and the Ministry of Kosovo Security Force into the Ministry of Defense.[10]

On March 4th, Prime Minister Thaçi iterated the decision to carry out reformation of Kosovo’s security sector following the recommendations mentioned above. Belgrade reacted immediately, underscoring that it would be a violation of UN Resolution 1244 and the principles of the Brussels Agreement. Belgrade went as far as to consider the possibility of calling for an emergency session of the United Nations Security Council, but Serbia was soon dissuaded from this course by the international community, which sought to avoid initiating such an escalation.

These declarations of Kosovo´s prime minister must be understood in the context of the pre-electoral campaign. Nevertheless the question of developing the security sector of Kosovo represents one of the “entanglements” that the Belgrade-Prishtina Dialogue needs to address. To create a Kosovo Armed Force and a Ministry of Defense, the constitution first must be amended. But amendments to the constitution can only be introduced by approval of two thirds of the Kosovo Assembly and two thirds of the members holding seats reserved for minority groups,[11]of which the Serbian minority holds 10 of 20.

Taking into consideration the incapability of the Kosovo Security Forces to access Northern Kosovo (NATO is still deployed to guarantee security in accordance with UN resolution 1244), it is hard to believe that the double majority needed to implement amendments could be reached. This may have two important consequences in the near future: It could give Serbs in Kosovo an important argument to participate in the next parliamentary elections, and it could represent a substantial trade-off in two main areas of negotiations. These negotiations concern the extension of transitional measures regarding Serb representation in the Kosovo Parliament as well as the establishment of the level of autonomy to be granted to the Community of Serbian Municipalities. The importance of this matter is such that Serbia´s President Tomislav Nikolic (still in vague terms) recently declared the necessity of a new mandate from parliament to negotiate since this question goes beyond the scope of the Brussels Agreement.

War Crimes Investigation

Following the 2011 publication by the Council of Europe of a report on war crimes and organized crime committed by the Kosovo Liberation Army (known as the “Marty Report”[12]), a Special Investigative Task Force (SITF) was established in the structure of EULEX’s (European Union Rule of Law Mission) mandate.  The objective of the SIFT, led by former US ambassador Clint Williamson, is to implementa thorough investigation into Marty´s allegations. This year should see the release of the investigation’s findings, which concern MPs and high political leaders, including Prime Minister Thaçi. A special tribunal to judge such crimes has to be established before June, when these particular crimes pass their statute of limitations. If Kosovo does not form such a court, the US and EU have threatened to refer the matter to the United Nations Security Council. Given the local and international political repercussions of such a court, the question of the framing in which those trials would necessarily be conducted is still a topic of discussion. One possibility is the creation of a special court in the shape of the International Criminal Tribunal for the Former Yugoslavia (ICTY), but Prishtina wants to avoid this possibility as it would damage the international image of Kosovo. Another possibility is to establish the court in Brussels. Since Belgium has refused to host such a court, claiming security concerns, the most likely result would be the creation of a court in The Hague with a “curtain” in Prishtina.[13]

In any case, it is expected to have strong political repercussions, whether or not Kosovo´s high political figures are condemned. The Kosovo Liberation Army members are now “founding fathers,” and any international action against them could trigger sharp reactions among the population. On the other hand, if high political leaders suspected of war crimes are released, it could reinforce the view that international action is biased against Kosovo Serbs[14]. Unlike other war crimes trials in the region, the open-question of Kosovo´s status will make it difficult for the international community to avoid a negative spill-over effect in the dialogue process, as it could bring into question the moral legitimacy of Kosovo´s independence.

The Creation of a Community of Serb Municipalities

In order to normalize relations, Serbia and Kosovo will in the near future need to  agree[15] about the nature and scope of the so-called “Community of Serb Municipalities.” The creation of such an association is one of the keys of the agreement brokered between Serbia and Kosovo last April, and the condition for Serbia to dismantle its national institutions remaining in northern Kosovo. The main difficulty here are the divergent positions that each side has concerning this association. Serbia advocates for the creation of a self-governing structure while Kosovo wants a mere non-governmental organization (NGO) to manage local affairs. Both countries as well as the international community, keep in mind the precedent of Bosnia, where a federation was created under the Dayton Agreements, with strong self-government structures according to ethnic boundaries, which brought the country into a long-term deadlock. It is highly unlikely that such an agreement could be reproduced in Kosovo, but even so the Community of Serb Municipalities is seen by experts  as an institutional challenge for Kosovo.

There are four main challenges concerning the creation of the Community of Municipalities:

1. In the short-term, it is unlikely to reach an agreement before the general elections in Kosovo. The constitutions of both Serbia and Kosovo must be amended in order to introduce the institutional changes related to the creation of a Community, and be approved by their respective parliaments. In the case of Kosovo, an agreement between the ruling coalition in power and opposition has been brokered in order to dissolve parliament two months before elections, which probably will take place in June. In practical terms, this means that the decision about the Community, in the best-case scenario, will not be taken before September. Protracting this kind of decision could be counterproductive, since it will exacerbate the feeling of uncertainty among the population.
2. Negotiations pertaining to the capacities of the Community go hand-in-hand with another major pitfall: negotiations about the judicial system. Prishtina wants the Court of Kosovska Mitrovica (the main administrative center of North Kosovo) to have jurisdiction over seven municipalities, four of them populated by Kosovo Serbs and three of them by Kosovo Albanians. Since Albanians would outnumber Serbs and the ethnic origin of judges and prosecutors must proportionally represent the ethnic composition of the population, this solution was unacceptable to Belgrade. In the most recent talks an agreement has been reached in which the question of proportionality would be “overlooked”. Serbs will enjoy a most favorable ratio (60-40, Serbs being the majority). But this solution has two implications: Albanian judges and prosecutors everyday working in “Serb territory” (as long as The Court is placed in North Mitrovica) and implicitly accepting the legal framework of Kosovo, which means to accept the jurisdiction of the Court of Appeals in Prishtina.[16] Both of these seem difficult to bring into effect, if only because of the most basic fear held by both communities: crossing ethnic borders. The most probable result would be the creation of two “buildings” for the same court, one in the North of Mitrovica (for the Serb population) and the other in the South of Mitrovica (for the Albanian population). Even if this is a separate matter, it may reinforce the negative image Kosovo Serbs have of the dialogue. If such an agreement is brokered in one of the most delicate institutional spheres, like that of justice, it still raises serious concerns as to the possibility of reaching an acceptable level of self-government for Serbs in Kosovo.
3. Another matter is the legitimacy of the agreement and the willingness of Kosovo Serbs to stick to it. Even if the International Community, OSCE, Serbia, and Kosovo consider 20% participation (in the best-case) of North Kosovo Serbs in local elections an acceptable result to validate the process, this interpretation is still doubtful. Elections were conducted in which Serbs were under high pressure to vote and even under those circumstances participation was too low to claim victory. The population of North Kosovo perceives new structures as imposed, but they have no incentives to make use of them. The creation of a Community of Municipalities has fewer benefits than their previous political situation in which they enjoyed the institutional presence of Serbia. On the contrary, Serbs in South Kosovo, living insolated and far from the border with Serbia, have participated more in local elections (around 50%) and have more to gain if this Community is created. It is a way for them to represent their interest vis-à-vis Prishtina. This political situation could develop two problems: first, the disaffection of Serbs in North Kosovo as to the future of the Community and second, internal factions among Serbs. Both situations could harm the status of the Community and encourage Kosovo – and the international Community – to find a new solution.
4. The role of Serbia in Kosovo is complex and constitutes the four challenges for the development of this Community. Through the victory of the Belgrade-backed party, Srpskia List, in nine out of ten municipalities of Serb majority, Serbia has assured its presence in Kosovo. This fact, however, still has several interpretations. On the one hand, Prishtina sees the creation of a Community of Municipalities led “in the shadows” by Serbia like a Trojan horse aimed at hampering the development of Kosovo. Therefore, it is reluctant to enhance the powers of this Community. On the other hand, the “control” exerted by Serbia through the Srpska List is presented as necessary to guarantee the implementation of all points covered by the Brussels agreement, including the creation of the Community. Still, and precisely for this reason, it raises mistrust among Serbs in North Kosovo, which perceive the hard positions of Srspka list as a façade to make them accept a solution which is against the interests of Kosovo Serbs.

It is very likely that all these interpretations hold some element of truth. Only continued normalization of relations and interactions with different actors tilt the position of Serbia to one of them. Be that as it may, handling all these diverging interests will be an extremely delicate maneuver for Serbia.

Finally we have to mention the implications of Russia’sannexation of Crimea on the situation in Kosovo and the important role which the EU has to play. Partitioning Kosovo was the long-time goal of Serbia. This position was resisted by the US and EU, and implicitly ruled out by the new Serbian government in 2012, when it decided to initiate a process of dialogue with Prishtina. Nevertheless, the declaration of independence by the Crimea, and its annexation by Russia would be Serbia’s preference for Kosovo. Since the objective of Serbia to be the 29th EU member state is not compatible with the partition of Kosovo, even less with its annexation, this possibility has been outright excluded from political discourse. If Serbia’s EU objective is not reached within a reasonable time, however, it may lead Serbia to reconsider whether its territorial, diplomatic, and political interests would be better-served by reorienting its foreign policy to that of Russia.

Raquel Montes Torralba is a foreign affairs analyst living in Serbia. She has a M.A. from the Universidad Pontificia Comillas, and has worked for Sciences Po Paris, the Spanish Foreign Affairs Ministry, and the United Nations. Dr. Anders Corr provided editorial oversight for this article. JPR Status: working paper, archived 4/18/2014.