DAMON WILSON: Good morning everyone. Good morning. Welcome to the Atlantic Council. Thank you for joining us early on a morning despite the weather outside. My name is Damon Wilson, I’m the Executive Vice-President here at the Atlantic Council. I am particularly delighted to welcome with us today the Honorable Phil Gordon, the Assistant Secretary for European and Eurasian Affairs at the State Department. We are here this morning for a discussion about US Policy Towards the Balkans. And it makes me tremendously pleased to see such great turnout for this discussion.

Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs

Atlantic Council 
Washington, DC

November 13, 2012

Phil Gordon has just returned from a visit to the region along with Secretary Clinton, where he accompanied Secretary Clinton on a joint visit with Lady Catherine Ashton of the European Union. A trip that took them across the region to Bosnia, Serbia, Kosovo, Albania, Croatia from October 29th to November 2nd. So we couldn’t be more delighted to have Phil with us today to help follow up that visit, explain the accomplishments, the outcomes, and the way forward for Southeast Europe in the wake of this important visit. A visit that I think the timing of it, the significance of the Secretary working this into her program, so close to the end of her tenure, I think also signals the importance that Secretary Clinton committed to the region. Here at the Atlantic Council today’s discussion is part of our work and our effort to keep a spotlight shining on what we call the unfinished business of Europe. We call this our Completing Europe Programming. It’s also part of our specific work on the Western Balkans, whether it be working on the issue of Montenegro and its path towards NATO, on energy security with Serbia, strategy sessions on the Macedonia name issue.

I think many of us in our community are concerned about the uneven progress in Southeast Europe and in the Western Balkans 17 years after the Dayton Accords. There seems to be a clarity of where the region is headed over the long term, but a lot of difficulty and challenges over how to get there in the short term.

We’re here as part of a broader conversation we’ll be having over the next couple of days on a “Post-Dayton Road Map?” How do we help move the Balkans forward. And I can tell by those of you who I recognize in the audience, this is an audience to help think through and determine those issues and answer those questions.

All this is taking place against a backdrop of the United States and the European Union that in many respects has been distracted by a Euro Zone crisis. There are calls within the European Union for the rescinding of visa-free travel from countries in the Western Balkans. I think that’s why this visit was so important, this joint visit was so important, why the attention of the administration on this region is key at this moment.
I want to introduce our guest, Dr. Phil Gordon. All of you know him as the Assistant Secretary of Europe and Eurasian Affairs where he covers 50 countries including NATO, the European Union, and the OSCE. Prior to joining the administration Dr. Gordon served as Senior Fellow at the Brookings Institution where he was the Director on the Center for the United States and Europe. Previously he served in the Clinton administration as a Director for European Affairs at the National Security Council where I first had the opportunity to meet him, where he was working on issues particularly related to NATO when the alliance was engaged at a decisive moment in the Western Balkans. Prior to that he served as a Senior Fellow at the International Institute for Strategic Studies in London.

After Dr. Gordon offers his remarks, Fran Burwell will come to the stage, our Vice President for Transatlantic Relations, and lead the conversation and moderate the discussion with many of you. With that, let me turn the podium over to you, Phil.

ASSISTANT SECRETARY GORDON: Thanks, Damon. It really is a pleasure to be here. Thanks also to Fran for inviting me and giving me this opportunity to address what I know will be a valuable workshop over the next day or two.

As Damon mentioned, it’s not something — it’s not just something I would have wanted to address anyway, but it’s particularly timely given the trip that Secretary Clinton just took to the region accompanied in part by EU High Representative Ashton.

I’d like to begin with a point that Damon also stressed in his introduction which is putting this in some global context. I think it goes without saying that the United States at this moment is facing a world full of tremendous global challenges. The conflict in Syria, the transition in Afghanistan, the economic slowdown in Europe, the challenges in North Africa, and we’ve been obviously responding to those challenges on a day-to-day basis — but the point I want to begin with, that again Damon you alluded to, is even as we face these tremendous challenges all over the world, we have never lost sight of the fact that we maintain a deep and historic interest in the Western Balkans, which is a part of the world where the United States has invested so much and where we have so many friends and interests, and I think the Secretary’s most recent visit to the region just a couple of weeks ago reaffirmed that abiding American commitment to supporting democracy and stability and prosperity in that region.

Just as the United States and the European Union are working hand in hand on these global challenges, as some of you have heard me address our partnership and cooperation with Europe globally here and elsewhere, we’re doing so in the Balkans, and I can’t stress that point enough.

It’s not a competition. Indeed, on the contrary, we know, we in the United States know, we cannot succeed in the region without Europe and Europe cannot succeed without us.

The prospect of EU membership has provided a strong incentive for countries to reform their economies, to advance their democracies, and to make peace with their neighbors, and we in the United States have strongly supported that process in Central and Eastern Europe, where it’s been an enormous success, and we strongly support it in the Balkans.

Again, I think this very close cooperation was most visibly demonstrated by the joint trip that Secretary Clinton and High Representative Ashton took. Secretary Clinton hasn’t done other joint trips with foreign ministers, but here we thought it was important for them to show up in some of these countries together. They went together to Bosnia, to Serbia and to Kosovo, with exactly the same message for the peoples and leaders in the region.

Their joint visit reaffirmed our continued commitment to integrating all of the Balkan region into Europe and into the West, and we’ve said many times that in our view Europe will never be complete until all of the Western Balkans are fully integrated.

At the same time they were able to make clear that progress depends on political leaders’ willingness to overcome the divisions and the narrow nationalism and the inflexible economies that have no place in the 21st century.

So let me say a few words about how the United States sees the current situation in the region, and I’ll do so by addressing the countries in the order in which the Secretary visited them, starting with Bosnia and Herzegovina.

Earlier this year after a 16-month political stalemate, Bosnia appeared to be getting back on track with the formation of a government and the adoption of laws needed to advance its Euro-Atlantic integration. However, this progress stalled several months ago over narrow personal and political agendas as well as attempts to stoke ethnic fears.

Ongoing efforts to reshuffle the state and federation governments are an unwelcome distraction from the economic and political priorities, including EU-NATO membership, that the main parties profess to support.

The priorities are clear: a functional and sustainable government, respect for state institutions and the Dayton Framework, and completion of the steps required for advancing the EU and NATO membership processes.

Now that Bosnia has successfully held local elections, Secretary Clinton and High Representative Ashton called on political leaders to complete immediately the requirements needed in order to submit a credible EU candidacy application and to activate NATO’s Membership Action Plan this year.

While we have no illusions about the difficulty of this process, we know that it is the only path to a prosperous and stable future for the country.

In order for Bosnia and Herzegovina to keep pace with positive developments elsewhere in the region it must also be able to function as a state that can deliver results for all its citizens. Rhetoric challenging Bosnia’s sovereignty and territorial integrity continues to raise doubts about whether politicians in Republika Srpska are truly committed to the Dayton Framework and EU integration. Secretary Clinton made clear in Sarajevo that the United States strongly supports the Dayton Framework — one state, two entities and three constituent peoples. Republika Srpska is and must remain a constituent part of Bosnia and Herzegovina.

Let me say a few words about Kosovo and Serbia, both of whose Euro-Atlantic aspirations the United States strongly supports.

As you know over the last 18 months the United States has backed an EU-facilitated dialogue that seeks to normalize relations between these neighbors in order to provide stability in the region as well as the lives of people in both countries.

We agree with our European allies that a country can’t join the European Union when it lacks normalized relations with its neighbors. The dialogue, this EU-facilitated dialogue, achieved some practical results including agreements on freedom of movement, common recognition of diplomas, of land records, Integrated Border Management, and Kosovo’s participation in regional forums. While there were initially delays in the implementation of these last two agreements, we are very pleased that the new Serbian government that was elected last spring has taken the necessary steps towards resolving differences, and expressed its commitment to EU integration — signing the implementation protocols on Integrated Border Management, and allowing the agreement on Kosovo’s regional participation to move forward — these are both encouraging steps.

On October 19th the Prime Ministers of Serbia and Kosovo met together with High Representative Ashton in Brussels. At this first meeting in a new phase of the dialogue at that level, Prime Minister Dacic and Prime Minister Thaci both showed a commitment to the process and agreed to further meetings.

Secretary Clinton and High Representative Ashton’s visits to Belgrade and Pristina underscored the unity of the U.S.-EU position as they encouraged both governments to fully implement the agreement which was reached already and to take concrete steps towards solving the impasse over Kosovo’s north.

Ashton again hosted Prime Ministers Dacic and Thaci in Brussels on November 7th, further demonstrating their mutual desire to find a comprehensive solution to normalize relations between Kosovo and Serbia.

Let me be clear. The United States strongly supports Kosovo’s sovereignty and territorial integrity, as do more than 90 other countries around the world, including the vast majority of European Union members. Neither we nor the EU expect Serbia to recognize Kosovo at this point, but Serbia will have to normalize its relations with a democratic sovereign independent multi-ethnic Kosovo within its current borders — partition is not an option.

To move forward, Belgrade should end its support for the parallel security, governing and judicial structures in northern Kosovo and work with the international community to ensure freedom of movement for all. This in no way means abandoning Serbs, as some have alleged — on the contrary, rather than asserting territorial claims Belgrade could support in a transparent manner the welfare of Kosovo’s Serbs who would benefit enormously from normalization. Belgrade could work to find solutions that will give people there a normal life for the first time in 13 years. The status quo of isolation, wide-spread corruption and insecurity serves no one’s interests.

At the same time Kosovo must continue to develop multi-ethnic democratic institutions and extend decentralization in order to allow local communities in the north as well as in the south to make more of their own decisions. We also expect Kosovo to respect the rights of all communities including Kosovo Serbs, and to preserve and protect their cultural and religious heritage.

On Serbia specifically, the United States continues to work with Belgrade to strengthen economic and business opportunities, enhance our military cooperation, and counter organized crime. Serbia has the ability to become a leading force for stability in the region. It is in our mutual interest to see Serbia prosper and achieve its European aspirations.

Turning to Kosovo, the country has considerably strengthened its political institutions over the last four years. The decision by the International Steering Group to end supervised independence in September validated this progress. However, work remains to be done on strengthening the rule of law, fighting corruption and organized crime, and tackling unemployment. The EU has clearly laid out the reforms necessary for Kosovo to continue its progress towards European integration, including the benchmarks for visa liberalization identified earlier this year, and the feasibility study released in October that identified no legal barriers to establishing a Stabilization and Association Agreement.

Kosovo’s serious engagement with Serbia and active reform efforts demonstrate its desire to be a constructive partner with a clear European perspective.

Following these joint stops with High Representative Ashton, Secretary Clinton continued on to Croatia and Albania.

Croatia has proven to be a true leader in the region as its rapid reform progress led to NATO membership in 2009 and will lead to EU membership this coming July. Croatia’s successful integration into Euro-Atlantic institutions should demonstrate to other candidate countries that despite talk of so-called enlargement fatigue, the EU’s door really is open to countries that fulfill their responsibilities and meet the criteria — reform your economies, reconcile with your neighbors, meet democracy and human rights standards, and you will ultimately join the European Union.

Momentum resulting from Croatia’s transition should be cultivated as a model throughout the region.

Notwithstanding Croatia’s considerable progress to date, more work remains to be done. In Zagreb, Secretary Clinton called on the government to continue efforts to improve public administration in the justice system, fight organized crime and corruption, and implement structural economic reforms.

The Secretary completed her trip in Albania. Her visit to Tirana came at a historic moment as she helped mark the 100th Anniversary of the country’s independence in a speech to the parliament. For many years Albania was Europe’s most isolated country under an oppressive dictatorship. Over the last two decades it has worked to strengthen its democracy and reform its economy. Albania joined NATO in 2009 and has become a valued member of the Alliance.

The European Commission’s most recent progress report recommended EU candidacy status for the country pending passage of key pieces of legislation. Secretary Clinton made clear that Albania now stands at a critical juncture and she highlighted the need for free, fair, and transparent elections in 2013.

She also called on members of the parliament to work across party lines and move quickly on passing EU-mandated reforms. In particular, Albania’s leaders must choose to leverage the progress achieved thus far by passing judicial and public administration reforms and revising parliamentary rules of procedure. The government also needs to make a concerted effort in fighting corruption and organized crime.

Finally, although the Secretary was unable to visit Montenegro and Macedonia on this trip, she underscored her commitment to the Euro-Atlantic aspirations of both countries in phone calls with their leaders after her visit to the region.

Montenegro has made solid progress towards NATO membership and opened EU accession negotiations earlier this year. In addition to holding successful elections last month, the country has also made important improvements in the areas of democratic governance, rule of law and media freedom. However, Podgorica must continue to address corruption and organized crime at all levels of society.

On Macedonia, the United States remains invested in the country’s success. We continue to support the growth of civil society and strong democratic institutions as well as efforts to institutionalize principles of diversity and inclusion throughout government and society.

Although Macedonia has made progress in inter-ethnic relations, we are concerned about tension between communities and political divisions. We also remain troubled by continued reports of government interference with the independence of the judiciary and the media.

As you all know, Macedonia’s name dispute with Greece continues to thwart its aspirations for NATO membership and the start of EU accession talks. We’ve been very clear that we were disappointed last spring that NATO was unable to welcome Macedonia at the Chicago Summit as we had hoped. But as NATO is a consensus organization, Macedonia and Greece must first resolve their bilateral disagreement before the Alliance can fulfill the membership offer that was offered at the Bucharest Summit.

Recently the Greek and Macedonian Foreign Ministers have exchanged letters reaffirming each side’s commitment to resolving the name issue and we strongly support the ongoing UN process on this issue and we will embrace any mutually acceptable solution that emerges.

It is clearly in the United States’ — as in the interests of Europe and the entire Balkan region — that Macedonia plays its full role in both NATO and the EU.

In closing, let me just say a few words about the overarching challenge of economic recovery. The United States has a profound interest in Europe’s stability and growth, so I’m pleased to see that this workshop will also discuss the impact of economic issues on regional integration.

The political challenges that I have focused on today have undoubtedly been exacerbated by Europe’s economic difficulties. The economic slowdown in Europe could have been an opportunity for Balkan leaders to focus on pressing domestic challenges including the need for rule of law reforms in the promotion of a stable investment climate. Instead, it has led to a worrying increase in nationalist rhetoric and the reemergence of chauvinism as a political rallying point.

Foreign investors will continue to bypass countries plagued by corruption, cronyism, weak state structures and political instability. By strengthening their economies as well as their political institutions, Western Balkan countries can become democratic, prosperous and capable allies that can contribute to Euro-Atlantic efforts to address global challenges.

The United States, working in close partnership with the European Union, remains committed to completing the unfinished business of Europe. However, as Secretary Clinton and High Representative Ashton also made clear, local political leaders must move past ethnic divisions and personal interests and focus on delivering the genuine reforms demanded by their citizens. If they do, they can count on the continued Trans-Atlantic support until Europe’s democratic process is fulfilled.

Thank you all very much for your attention, and Fran, I look forward to continuing the discussion with you on stage.

MS. BURWELL: Thank you very much Assistant Secretary for those remarks — I think a very thorough review of this trip, which I agree was a very very strong indicator of the commitment of this administration to addressing these issues, and it sounds like particularly doing this as a joint trip with Baroness Ashton was a very strong signal of the cooperation between the two.

I wanted to just drill down on a couple of issues and then I’m going to open this up to this audience, because we have a lot of people here who are true experts on the Balkans as well as representatives from many of the countries involved.

Let me go in the same country order. You mentioned that it is a strong argument that Secretary Clinton and Baroness Ashton made in Bosnia about moving forward. And I think that in fact Secretary Clinton remarked that Bosnia was in real danger of falling behind the rest of the region.

There were two issues that seemed particularly to come up. One more European and one more US-NATO -centric, if I can put it that way. One is the European Court of Human Rights decision about the need for constitutional reform, and the other is that now there is apparently a decision in Bosnia about the defense properties and who owns them, and that has been a big holdup in Bosnia moving forward with MAP. I believe Secretary Clinton even promised that if this was resolved, if the right steps were taken, she would go to the NATO Ministerial in December and argue for MAP.

Can you tell us, how hopeful are you that either of these are going to be addressed? What kind of reaction did you get from the leadership there in terms of addressing these two issues? Are these really the only two issues that are holding up the process now in terms of legalities?

MR. GORDON: Thanks Fran. You mentioned a number of important points — let me pick them up. You also noted the presence here of foreign representatives, and as you noted in addition to the many experts in the room, we have ambassadors from just about all of the countries in the region, and I appreciate their being here. They’ve been important partners with us, not just on this trip, but throughout our common efforts to integrate the Balkans into Euro-Atlantic institutions.

To start on the Bosnia and Herzegovina issues that you mentioned, first of all, you referred to the Secretary’s allusion to potentially falling behind. We’ve been very frank about our concerns, and that’s one reason I mentioned some of the other areas of progress in the region, in particular Croatia’s soon membership in the European Union. It underscores that those countries that don’t do what they need to do in terms of domestic reform, economic reforms, and relations with their neighbors, will be left behind. The door to the European Union, to NATO, is open to those who do what they need to do. And regrettably — and it really is a source of regret — it will remain closed to those who don’t, and that was a message that Secretary Clinton and High Representative Ashton wanted to jointly carry not just to the Bosnian leaders but to the people of the country, and so that’s the context in which we can talk about some of the stumbling blocks you mentioned, and alas, no, the Sejdic-Finci European Court of Human Rights decision and the defense property MAP decision alas aren’t the only challenges and obstacles in the way, and I can say something about each of those.

But in some ways it’s even more fundamental than that and I referred to the challenges of government formation, where, if you recall Secretary Clinton’s first trip to the region was in October 2010, just weeks after the Bosnian parliamentary elections which we hoped would quickly lead to the formation of the government, and government functionality and tackling some of these problems — instead it took 16 months simply to put a government together and since then whereas again as I underscored, there was initially some progress on passing a budget and tackling some of these issues — the party leaders continued to squabble over spoils and who gets what within the government to the extent that it’s hard to describe the current situation in both the state and the federation level as functional government, so it is more fundamental than that and they need a functioning government to tackle the very specific issues that you mentioned.

One — each of those are specific criteria from two different institutions, the European Union and NATO — and on the first, I wish I could report more progress from the visit on tackling this issue, which without getting too much into details about allowing all of the citizens of the country, not just those named in the constitution, regardless of what ethnic group, to serve on the presidency and represent the country; and the leaders — it should be a pretty straightforward thing to do — but the leaders have been unable to do it and as long as that’s the case, Bosnia’s candidacy for the European Union can’t move forward.

The NATO Membership Action Plan issue is also pretty straightforward. At the Tallinn Ministerial in the spring of 2010, NATO ministers decided to give Bosnia a Membership Action Plan, but they noted that it would be impossible to activate this Membership Action Plan until the government of Bosnia and Herzegovina had registered the defense properties that once belonged to the former Yugoslavia and are still in dispute within the country. I think NATO ministers felt it was a minimum requirement for a country that wants to be on the path towards NATO to be able to decide who owns defense properties, military barracks and so on, and they’ve been unable to do so — last March there was an agreement among the party leaders to do so, and they have failed to move forward with implementation.

So on the two specific issues you mentioned and the broader question of government stability and functionality, Secretary Clinton and High Representative Ashton delivered a very clear message to the leaders of the country that the specific requirements need to be met; the broader question of cooperation among parties and ethnic groups needs to be addressed; and challenges to the fundamental Dayton Framework need to be put aside before Bosnia and Herzegovina can move forward towards Europe.

MS. BURWELL: Thank you. Let me move on just briefly to the Kosovo-Serbia conundrum. You mentioned the EU-sponsored conversations that have been going on most recently I think, just last week in Brussels. There seems to be, as you described, good progress there on some shall we say technical issues, but issues that make a real difference in the way people interact, citizens interact.

At the same time the Serbian President Nikolic has said that they cannot recognize Kosovo and will never recognize Kosovo. Is there a point, where do you move from a technical dialogue like this? Where does it become necessary to address some of the status issues? Can you really delay those for a very long time or at some point do you just have to confront them? And are we getting anywhere close to that point?

MR. GORDON: The short answer to your question is yes, you can do an awful lot short of a fundamental agreement on status, and that’s what this dialogue has been about. If we — by we I mean the United States and the European Union — had said okay, before we start talking here, let’s resolve the question of status, no one would have been in the room. We could take that position, meanwhile all of the, you can call them technical, but that sort of belittles the importance of these issues that are important in the day-to-day lives of all of these people, wouldn’t be addressed.

So instead of saying the status needs to be agreed before we talk about anything, we said the opposite. The parties don’t agree on status, so let’s put that one thing aside and let’s see how far we can get short of that and there’s an awful lot you can do.

I mentioned all of the agreements about freedom of movement, Integrated Border Management, and mutual recognitions and customs stamps, and trade, and that is important progress, and that was I think — you’re right to call it a technical dialogue –and that is what went on for 18 months facilitated by the European Union with the strong participation and involvement of the United States.

Now this is taking it to another level, following the elections in Serbia, and for the first time it’s at the political or the prime ministerial level that these new meetings are taking place. Precisely to say it — and we welcome the fact that the parties were willing to do that– just to acknowledge that the technical discussions need to go on — you need agreements on telecommunications, on electricity — all in the interest of serving the people, and there have been a couple of constructive meetings at that level so far, and there are security questions that need to be addressed. I addressed the issue of non-transparent parallel institutions, so yes; there is an awful lot that can be done short of an agreement on status. You’re right, that the Serbian President and others have said that they’re not prepared to recognize Kosovo, but I think you heard Secretary Clinton say that’s not what we’re talking about right now — we’re talking about normalizing relations in the interests of all of the people in both countries, and then we’ll tackle the harder problems further down the road.

MS. BURWELL: Thanks very much for those clarifications and more details on what is a very complicated set of issues.

I’d like to open it to the audience now and please wait for the microphone to get to you. And please, even if I know you, please introduce yourself and say who you are.

Q: [Inaudible] problem for the European Union, but they found a creative solution. You said you were sorry because Macedonia didn’t get an invitation at the Chicago Summit and you say over the years now that USA will accept any mutually reached solution with Greece, but we are tired of hearing those answers. It is five years since Bucharest and 98 percent of Macedonians support NATO membership. You value our contributions to the missions in Afghanistan and Kosovo, but how long will you let us wait in the waiting room for NATO membership?

MS. BURWELL: If I can just add to that, I believe on Friday Stefan Fule, the Commissioner for Enlargement, said in response to these letters that you mentioned that had been exchanged by the Greek and Macedonian foreign ministers, that it might be possible to start Macedonian accession negotiations to the EU without having that agreement – it would have to be done by the time they reach the end of negotiations, but as we know, EU accession negotiations can take a long time.

Do you see that as a possibility? Does it have any bearing on the NATO issue? Obviously NATO, they basically had their accession negotiations. I don’t know if that matters to the NATO question.

MR. GORDON: They’re obviously related and analogous in some ways, but I need to leave to the European Union decisions on criteria that will be set forth for beginning accession negotiations. What I can say and indeed have said, because we’ve been pretty clear about this where NATO is concerned — I underscored our regret that we weren’t able to welcome Macedonia at the NATO Summit at Bucharest. Members of the Alliance took the decision that the country had met the criteria for joining NATO. We think it would be a factor of stability. As our colleagues said, it’s very strongly supported throughout Macedonia by all ethnic groups and it will be a factor of stability for the region.

It nonetheless remains the case, and we have no means to change the fact of the matter that NATO’s a consensus organization and enlargement only happens when every member of the Alliance agrees to it, and that’s been the case from the very start and it’s unlikely to change. So we can continue to make the case that NATO membership for Macedonia would be a positive thing for Macedonia and the region and for the Alliance, we do make it, and that’s why we are willing to do whatever we can to facilitate that mutual agreement that is the prerequisite for Macedonia joining the Alliance.

Q: A question on Bosnia. Bosnia would be the country perhaps you’re most concerned about just judging from your intervention. What’s your view of the security situation if something was to break out there? At the moment there is a small EU force there that seems to be declining in size. Are you concerned that the EU wouldn’t be able to cope if things did get out of control?

MR. GORDON: On the latter, fortunately notwithstanding all of the challenges we face, and the dysfunctionalities, and the lack of progress I referred to, there are not signs of physical conflict or concerns about a resumption of war or fighting among the groups. That’s an important element of progress that not only was made in the past but seems to be holding for the future. Obviously we watch it very carefully and we would continue to monitor it and any concerns in that area would be addressed, but that’s not what the people talking about it are focused on, it’s rather the lack of — it’s not so much a return to the conflicts of the past — but a lack of ability to take the country forward.

Your first question about is that what we’re most concerned about. There are a lot of concerns in the region, and I mentioned a number of them — so long as Serbia and Kosovo haven’t resolved their differences there are security concerns in the north and we in NATO have even more security forces in Kosovo than in Bosnia because there continues to be a security challenge there — periodic road blocks and barricades and bypasses, and I think I flagged concerns in a number of different countries as well, so I don’t want to try to rank them, but clearly we are disappointed at the current state of affairs in Bosnia and Herzegovina — the country really does have much more potential than is currently being fulfilled.

Q: I’d like to turn the discussion on Bosnia to the economic dimension. You raised intramural bureaucratic fighting within the federation structures and the rhetoric that has been on the rise, but on the other hand, there is another trend which I’d like your comment on, and that is this large hydroelectric project for the Balkan region, where about 2,000 megawatts of electricity are supposed to be brought on-line through negotiations largely led by Italy to supply Italy’s east coast. Those will bring between eight and ten billion dollars in projects. In addition there’s a fairly high potential in serving the biomass industry that these, certainly Serbia and Bosnia have.

Along these lines I know that about 30 to 35 percent of the energy on the hydro projects will come out of Bosnia and will require intra-state boundary issues to be resolved. Do you see any perspective in these larger projects which clearly incentivize the leadership of these countries to get something done. They mean jobs, they mean their political futures. Do you see that as a new dimension which could be effectively and more aggressively addressed by the US and the European Union? Or do you think that the rhetorical and political vector is the dominate one?

MR. GORDON: Both. As I said in response to the last question, I think there’s enormous potential in the region and in Bosnia and Herzegovina, and energy is a potentially promising area. But I’ve talked to plenty of investors in the Balkans who don’t like government dysfunctionality, they don’t like lack of transparency, they don’t like corruption, they don’t like concerns about conflict and so the two things are parallel, and that’s why we keep, again, that’s why the Secretary took the time, even in the context of all these global challenges, to go and reinforce these messages about the potential the region has, but until they tackle some of the issues I addressed, I’m afraid investors will find other places to go.

Q: Mr. Gordon, two short questions on issues that you didn’t mention too much in your speech. One is the other integration slowing down, NATO integration. After Croatia, there will be a break in EU integration, even if Montenegro does everything right it will take them maybe ten years to get into the EU, provided that the EU integration will move on.

Is there a chance that NATO, next NATO Summit will be an enlargement summit?

The second question is about domestic development in Serbia. There is a danger, I believe, of democratic backsliding now as we have a new establishment in Serbia, the other Serbia so to speak [inaudible]. And they have [inaudible] fighting against corruption that seems as scoring with their opponents, some wiretapping and so on. Is this not the right time to talk also about domestic developments in Serbia and draw the line? Is this not a fragile moment to speak also not only about Serbia-Kosovo but also speak about what is going inside the country, in Belgrade?

MR. GORDON: Thank you. Two important sets of questions.

The first question, is there a chance that the next NATO Summit -– which by the way has not been scheduled yet — could be an enlargement summit? Sure. You know how the process works: if a country meets the criteria and the Alliance members are ready to expand, they can take the decision at the next summit to do so.

You know who the current official aspirants are: Montenegro which has a MAP and is working well with NATO; Bosnia and Herzegovina; Georgia; Macedonia. I think four very different sets of questions regarding which one of these, if any, might be ready for membership and it will simply be a question — again, there hasn’t been a summit scheduled, but in the lead-up to the summit, whenever it is, Allies will have to decide if any of those countries have met the criteria.

I would just stress that we’ve always said that each country should be treated on a case-by-case basis. I don’t think countries that are ready should have to wait for others in some group package, but at the same time all of the criteria have to be met and one of those criteria is a consensus among NATO members that it happen.

So we’ll have to watch each case and see. I would just continue to stress what the United States’ position has always been, which is that enlargement, NATO enlargement has been good for NATO, it’s good for candidate countries, and the door remains open. And in those cases I think the countries know what they have to do, and if and when they do them, we will be proud to support the next enlargement.

On Serbian democracy, I was very careful in my speech to underscore how important these issues are throughout the region. It’s not just a question of external decisions and policies, but internal ones as well. I would say though that Serbia had a free and fair election and it was monitored by the OSCE, in fact the OSCE played a major role in assuring that ethnic Serbs in Kosovo could vote as well, and the democratic process worked and we will expect of the new Serbian government — expect them to meet the same democratic standards that we expect of all of these countries if they want to move down the path towards Euro-Atlantic institutions.

Q: Phil, I’d like to ask a two-part question on Bosnia. The first one is to follow up on Mr. [inaudible]’s question about whether or not EUFOR will be prepared to meet any kind of violence. Your answer was, from what I’ve read I think it’s true, that there is no immediate threat. Nonetheless when you gave your speech, you did bemoan nationalist rhetoric in Bosnia threatening the territorial integrity of the state from the part of the RS. We no long have an SFOR so we don’t have the U.S. troops that can move. But it has been suggested in the past that one quick way to make it clear that the rhetoric simply cannot and will not have any tangible results is for a contingent at least of the remaining EUFOR troops to move up to Brcko. I realize they’re not our troops but the United States certainly cooperates, as you say, very, very closely with the EU and I think a suggestion from us to that effect might have real power.

The second question also ties in with the cooperation between the United States and the EU. I wonder if you could bring us up to date on what the future of the Office of the International High Representative is? When you spoke at our conference a year and a half ago in Sarajevo you gave the most detailed and forceful and clear criteria I think that any U.S. senior diplomat has ever given about what would be necessary before the Office of the High Rep would be abolished. I wonder if you can bring us up to date on our thinking.

MS. BURWELL: One additional point to that, it’s my understanding but please correct me if it is not the case, that ending the Office of the High Rep is a requirement for EU accession. Because it’s not a sovereign country without [inaudible] I suppose. So if you could throw that in the basket as well.

MR. GORDON: On the first Mike, we continue as I said to look very carefully not just at the political situation but the security situation and our general view – – and this is true in Bosnia and in Kosovo – is obviously the long term goal is not to need any foreign troops at all. We’re not there yet, and so long as they’re still necessary we’ll support their being there in sufficient numbers, and I think that’s the case. Again, as you say, the troops in Bosnia are not ours, and we don’t control the decisions as to where they are and how many there are. We do have ongoing concerns that security presence — and this applies not just to EUFOR in Bosnia but to KFOR and to EULEX as well — be adequate to the task, and we all know the resource constraints that apply to the European Union and to NATO and there’s constant budgetary and other pressure to draw these numbers down, and you can be sure that we have a vigorous discussion with our EU counterparts and the rest of NATO to make sure the presence be adequate and I think it is at present.

In terms of signaling, what you said a movement of EUFOR would signal, again let me just be absolutely clear, and that was one of the points of the trip, to make clear on behalf of the United States and the European Union that challenges to Dayton are not acceptable, and I think that message was heard loud and clear and it is one we will continue to make clear to the parties, which segues I think naturally into your question about the Office of the High Representative, which is part of that same message.

We are here to stay, we the United States, are not walking away. Once again, I put this is in the context of all the global challenges we face — we’ve invested too much in this region over the past 15 or 20 years to walk away.

Our criteria for the ending of the Office of the High Representative are clear, they’ve been agreed by the Peace Implementation Council, and until those criteria are met, we believe that the office needs to continue. You’re familiar with the debate in some European countries that are arguing that it should move on and Fran, you are right in the context of European integration they say that a country can’t join the European Union so long as there’s some foreign authorities there, and just to be clear we’d love to see the day when that is not necessary so that Bosnia and Herzegovina could join the European Union, but our belief is that so long as those authorities are necessary, which alas we believe remains the case, the office should continue its role.

Can it be streamlined, can it be more effective and efficient? Do we constantly need to look at it and make sure it’s appropriately staffed and playing the right role? Of course, but we believe that until the agreed criteria are met, until we could confidently end its role, it needs to stay there and the United States is going to continue to support it.

Q: Thank you especially for mentioning a very important issue for the entire region and that is fighting organized crime and corruption, and of course you underlined also that it is absolutely necessary to build democratic institutions in order to achieve that end.

Obviously the European Commission is of the same opinion and this is why they decided to start accession talks with opening the chapters 23 and 24, Justice and Home Affairs, and will keep them open until the end of the accession talks.

I wonder whether you would agree with the thesis that it will be very important in fact to start this kind of accession talks in all the Western Balkan countries, Kosovo included in a way? Because otherwise it is very difficult to imagine that they will move forward in enough speed on this topic. I would also like to remind us all that we are ahead of two important anniversaries. One is the Thessaloniki Summit in 2003 and the other one is the end of the First World War 2014. GMF’s commission on the Balkans suggested in 2005, that until 2014 it would be important to have all of the Western Balkans in the EU. That is not going to happen. But the accession talks obviously could be a mechanism to in fact move forward all the countries and the entire region I understand exactly the way you have described here.

MR. GORDON: Thank you. You raise an important question and debate about whether it would be helpful to start accession talks with more countries or whether to make it contingent on them meeting certain criteria, and that’s a debate that has gone on since the start of the concept of accession talks. I think you can argue it either way, whether it makes more sense to so-called front load the process and start the accession talks, and give countries the sense that they’re really moving forward and they need to meet criteria before those accession talks actually lead to accession; or to make the bar higher to even start the accession talks — different countries have different views on this, always have — obviously the United States doesn’t get a say, this is something the European Union is going to decide, so I can just relate to you my sense that at I know at least some key European countries want to see more up front. They are not ready to send a signal that the European Union is ready to start accession talks with a country when some fundamental criteria still have not been met and so they’re asking for a bit more of an up-front down payment: show us that you’re really serious and then you can start accession talks, and again, without having a say in the process I think we’re sympathetic to that notion.

While we want to see all of these countries move forward, the countries need to show an element of seriousness, that they are really prepared to tackle these problems or normalize with their neighbors and once they do that they can be rewarded with accession talks that show the country that look, you do something difficult and important and you make progress toward the European Union and then you do some more difficult and important things, and you eventually get membership.

So exactly where the bar should be is a matter of debate, but the general process of doing what you need to do and getting a sign of encouragement from the European Union makes sense — it’s worked in the past and it should apply in the Western Balkans as well.

MS. BURWELL: I think in fact sometimes U.S. pressure or encouragement to start the accession process early isn’t always productive. We’ve seen that with some other countries. But is there a role for a less formal dialogue — particularly on rule of law and anti-corruption — that would bring countries who have different levels of progress so they can see almost like a pre-accession checklist like the feasibility studies that are sometimes done with US engagement. Is there a role for something like that? Would it be productive? Or are we better sticking with the formal things because there’s more pressure applied to the governments who may be reluctant?

MR. GORDON: I think we’re involved in all of these things and throughout the process in an informal way, and again, the joint Clinton-Ashton trip shows how closely we are working on these things, and getting back to the accession talks bar, I would just remind that there are a lot of steps along the way between nothing and EU membership, there are so many steps that I couldn’t name them here — even if I knew them there wouldn’t be time — but you referred to in the case of Kosovo a Feasibility Study for a Stabilization and Association Agreement, then you have a Stabilization and Association Agreement, there’s the concept of candidacy status, there is formal accession talks, once you have formal accession talks there are different chapters along the way, so it’s not as if there’s just one step and the EU’s deciding do you reward with membership. There are a lot of steps along the way, and that’s the process, the sort of dialectical process, I was describing to the country: show us that you’re serious and you’ll be moved along a path, and you move along the path and you do some more. The idea is that wherever exactly you place these bars and steps you climb up the ladder, to really mix the metaphors, as much as possible, but the general process is clear and I think it’s the right one. Basically the countries know what they need to do.

Q: Phil, if there’s one bright spot in terms of the functioning of the central institutions then it has been the army of Bosnia and Herzegovina, which has acquitted itself well in both Iraq and Afghanistan, and continues to be well organized and well functioning. There is a growing drumbeat of rhetoric coming out of Banja Luka to abolish the Bosnian army. I’m wondering whether EUR or the Department has taken any kind of position on this and whether any kind of message has been passed in Bosnia-Herzegovina about what we see in terms of support for such an idea. Thank you.

MR. GORDON: Yes, and the message is the one that you suggested that we believe that one of the more positive promising things over the past 15 years has been the integration of the armed forces which has served the country well and served the world well, and we strongly oppose any rhetorical or other challenges to its integration, and once again we’re drawing the line — it comes back to why there continues to need to be a EUFOR and why the Office of High Representative and its authorities has a role — because there’s a line that can’t be crossed without challenging the fundamental institutions of the state.

Stray rhetoric here and there, there’s not a lot we can do about it other than addressing it, but we can make clear that efforts to dismantle the Dayton institutions or the other institutions of the state, that’s the red line that can’t be tolerated by the international community.

Q: I know everybody is very heartened to hear that normalization talks are taking place between the Serbs and the Kosovars. We are equally concerned that there may be some difference between the U.S. and European position in the event that the talks do move forward, are you a hundred percent convinced that the United States position the Europeans will not allow any further accession to the EU until the normalization talks are concluded and are satisfactory to both sides?

MR. GORDON: Ultimately you’ll have to ask them to speak for themselves. But I can tell you, you began by alluding to differences between the United States and the Europeans, I don’t think so. That’s one thing, if you take nothing else away from this, I want to stress is how tightly aligned we’ve been, we’ve talked about it from the start. As I said in the EU facilitative dialogue, we were present at the creation and present at the table as we have been for this next phase of talks in terms of our engagement with the EU about what they should be about and where they should lead, and as you obviously know, there are a range of different European positions among EU members, some of which don’t even recognize Kosovo, so almost by definition there are going to be different views, but if the consensus practice can be a complication in other contexts that we’ve discussed, it also applies here in the sense that it is only when all of them are satisfied that relations have been normalized or that criteria have been met so that Serbia and/or Kosovo can move towards the European Union, that they will, and so I think you can be sure, and I’ve heard it from European countries, and I know you have as well, that they want to see normalization between Serbia and Kosovo before, usually before Serbia, although it applies to Kosovo as well, can move forward with accession talks and joining the European Union, and it’s not surprising that that’s their view because if you were a member of the European Union would you want to incorporate a country whose border was ambiguous, uncontrolled, non-transparent, a source of instability? You wouldn’t, and so it’s not a threat to Serbia or to the countries that you can’t move towards the EU until this is resolved, it’s just the reality and the publics in Europe and the leaders in Europe won’t move forward with accession until those problems are addressed, and that’s why we’re pleased to see that the Prime Ministers are now starting to address them. So I am confident that we’re on the same page on this.

Q: Secretary Clinton stated in Pristina that the US commitment to Kosovo is [inaudible]. The question is how is that [inaudible]? And could the United States have a balanced approach to both countries when one of them is the personal favorite of the U.S. top diplomat?

MS. BURWELL: And one more.

Q: I have a question regarding energy and particularly gas supplies to the region and securing energy independence for Eastern Europe. As we know, GAZPROM is already starting building South Stream. In fact while Secretary Clinton was in the region, Gazprom signed finally investment decision with Serbia. South Stream will have branches to Croatia, Macedonia, Bosnia and the Republika Srpska [inaudible]. So South Stream is starting; what is the U.S. administration doing to support Nabucco or any modification of Nabucco pipeline to be able to provide true energy independence for Eastern Europe rather than just diversification of routes and not sources. Thank you.

MR. GORDON: Thank you. Obviously another potentially very long conversation. I’ll just underscore that we’ve been very clear about our priority on a southern corridor to promote energy diversification throughout the Balkans and Central and Eastern Europe — countries that are dependent for energy on sole suppliers are also dependent politically, so we think there’s a strong economic and energy and political and strategic reason to promote energy diversification and other sources. We’re not picking and choosing among pipelines — there are different alternatives — but the general concept we’ve been working through our energy envoy and now our new Energy Bureau to promote that diversification which we think will be in the interest of all of the countries in the Western Balkans.

Sir, for your question on Serbia and Kosovo, we think we do have a balanced approach. It’s not surprising Secretary Clinton has a strong personal attachment to Kosovo — we’re very proud of the role that we played in that country’s birth and as I underscored, we are strongly committed to the partnership with Kosovo – we think in just four years of existence it has made real strides on the front of democracy and fighting corruption and peace with its neighbors.

But you ask if we can be balanced. I think we’ve been equally clear how strongly we feel that Serbia’s interests need to be taken into account, how much we want to see Serbia also move down the path of Euro-Atlantic institutions. Normalization with Kosovo is not just a matter for Kosovo, it’s a matter for Serbia and Serbs as well, and we have stressed the importance as I have mentioned, of decentralization so that local communities can have the strongest possible voice in their own affairs about protection of Serbian religious and cultural sites, and about how much Serbia would benefit from the sort of normalization that we’re talking about and about the bilateral relationship with Serbia which Secretary Clinton has visited twice, and I’ve visited many more times than that, and I think that nobody should think that our support, our any personal support for Kosovo, comes at the expense of Serbia — on the contrary it’s designed to help Serbia as well.

MS. BURWELL: Two more.

Q: I just returned from Belgrade last week, so I’ve been in the region for the last six weeks. I was there prior to, during and after your visit. And what I came away with over there is complete frustration, particularly about Serbia, within the population, and where economically how things have just not gone the way they wanted to. And I had meetings with Ambassador Kirby when I was there and also prior to that when Ambassador Warlick was there, about the U.S. getting more involved in business development and attracting more companies over there.

The frustration that people have over there back in the EU, they keep saying we’re Europeans. We are Europeans. We don’t understand. I know that a lot of that comes from not the way the economic conditions are there.

So what’s surprising is, what we’re seeing, what I’m seeing is the influence of the Russians and the Chinese on the business side. They are there tremendously. For those of us that are trying to get in and trying to help a little bit, but it’s kind of a forgotten country. For those of us who go back [inaudible], remember the good old days of the former Yugoslavia when it was every American company was doing business over there. Now nobody’s there, and it’s not just for Serbia, it’s kind of a forgotten region.

So what is this administration going to do to try to up the ante a little bit to get more U.S. involvement not just in Serbia but in the entire region to try to counter what the Russians and the Chinese are doing?

Q: A follow up. One, do you actually envision a U.S.-Balkans business summit that you had a couple years ago –- do you have a vision for that in the near future? Also, what is U.S. policy on the International Court of Justice ruling in December 2011 when Greece violated the U.S.-brokered interim accord that stated that Macedonia can join NATO under the name the Former Yugoslav Republic of Macedonia?

MR. GORDON: Frustrations with the economic situation are not unique to Serbia, there’s a difficult economic situation all around the world, including in Europe, and people are understandably frustrated. That’s why one of the themes of the Secretary’s trip was indeed the need to tackle the issues of transparency, rule of law and security and political functionality to create a more favorable investment climate. It’s not good, and she specifically raised this in her discussions in Serbia and elsewhere throughout the region, so you can be sure, and it is related to your question about whether we will have any more Balkan economic summits, it is an interest of ours, it’s one that was raised on the trip and it’s one that we will continue to work on. It’s also a prerequisite for these countries moving towards European integration. That’s a sort of virtuous circle: they need to tackle these issues so they can join the EU, and the prospect of joining the EU is good for their economies.

On the ICJ opinion obviously we took note of it, are very familiar with it. It doesn’t change the fundamentals of what I described. I think the essence of the ICJ opinion was that Greece’s opinion on the subject is in violation of the interim accord. That may well be and you can read the opinion on the subject, but where NATO membership is concerned the realities that I discussed earlier — that it only happens when there’s consensus among members that it can happen — is not changed by that or another opinion, which takes us back to where I began that discussion, the absolute need for an agreement between the parties, we’re prepared to help in any way we can. We strongly support Macedonia joining NATO and if they were to reach such an agreement it would be in everybody’s interest.

MS. BURWELL: Thank you very much.