Kosovo one year on - The European Contribution

MEMO/00/12
Brussels, 8 March 2000

On 24 March, it will be a year since NATO responded with force to Slobodan Milosevic's growing repression of the Kosovo Albanian community.

On 10 June 1999, Kosovo came under UN administration and the UN Mission in Kosovo known as UNMIK was set up under UN Security Council Resolution 1244.

The European Union both its Member States and the European Commission is playing a prominent role in the reconstruction of Kosovo.

Some thirty six thousand soldiers from EU nations are serving as members of the Kosovo Force (KFOR), some 80 per cent of the total force.

The Commander of KFOR, General Reinhardt, and the Head of UNMIK, Bernard Kouchner Special Representative of the UN Secretary General, are both from EU Member States.

Some 800 civilian police from EU member states are serving in Kosovo. More are needed and the numbers are set to increase further in the coming weeks.

Over 100 NGOs from EU Member States are working in Pristina or elsewhere in Kosovo.

The European Commission is working closely alongside them and with other international partners, including the United States, to rebuild everyday life for all the people of Kosovo whatever their ethnic background.

A year later, the challenge remains formidable for the international community and for all the Kosovo people, working together.

Kosovo has come through a harsh winter. But bitter memories of the conflict remain fresh, and many remain set on vengeance, as recent violent incidents testify.

Much remains to be done. This is a long-term endeavour, and the international community is committed to seeing it through.

But it is important, despite the difficulties, to keep a sense of perspective, and to recognise what has been achieved in nine short months, with a winter in the middle. We cannot and must not be complacent, still less starry eyed.

In March last year, conflict was raging across Kosovo. Since then:

• Nearly a million refugees have returned to their homes, and half a million people who were displaced within Kosovo have done the same.
• Kosovo has come through a harsh winter without some of the dire predictions materialising. Many have faced very difficult conditions: but the efforts of international partners, including the European Union, have alleviated matters.
• The European Union through its humanitarian agency ECHO has provided shelter to 22,500 families over the winter period. It has also delivered construction materials for the repair of badly damaged homes.
• A local administration has been established.
• From a situation of complete standstill of economic activity, with no accepted currency, no budget and no banks Kosovo now uses a stable currency, a balanced budget, a functionning system of public finances, and a Banking and Payments Authority supervising the developing banking system, to allow businesses to prosper.
• Hospitals and basic health services are now functioning in Kosovo, and nearly all children have been inoculated against childhood diseases.
• A new independent and multi-ethnic judicial system has been created with over 50 justice officials appointed, courts serving Pristina and two mobile courts to hear emergency cases. A new penal code is now being drafted by Kosovar legal experts.
  The European Union has been playing a key role in these achievements.

The European Union heads the departments of the UN interim administration in Kosovo (UNMIK), which are responsible for economic reconstruction and development.

Within days of the conflict ending, the European Commission had ECHO the EU's humanitarian agency - back in place to continue humanitarian activities, had established a Task Force to deliver assistance for reconstruction. The EU is the largest single donor and is playing a major political and economic role in the rebuilding of Kosovo.

The Task Force was established as an interim measure, pending the creation of European Reconstruction Agency. This began operations in February, and the Task Force has now handed over to it. The Agency will work closely with UNMIK to manage and drive forward EU reconstruction projects in Kosovo.

What has the EU done?

Since June 1999 the EU has:

Delivered construction materials for the primary rehabilitation of around 3,500 of the most badly damaged houses in Kosovo. This also includes transport as well as building assistance to the most vulnerable people.

Provided emergency shelter through its humanitarian agency ECHO - to 22,500 families to help them cope during the winter period.

ECHO has also:

Distributed firewood to 6,000 vulnerable families, including minorities, primarily around Mitrovica.

Provided emergency de-mining teams and contributed to a UN centre for de-mining, mine awareness, mine mapping and mine clearance certification activities.

Supplied winter/spring seed, fertiliser and tractors.

Assisted the emergency rehabilitation of 159 schools. Nearly 90% of Kosovo's children are now attending school.

Launched an emergency water and sanitation programme around Mitrovica.

Provided technical and logistical support for needy NGOs, through transport, warehousing and generators.

Facilitated the identification of individual witnesses to be interviewed by ICTY investigators and supported the Kosovo Rehabilitation Centre for Torture Victims.

Provided €9 million for drug distribution, health care, public health and vaccinations.

ECHO has provided substantial assistance to the: UNHCR (€21,876,050 for provision of non food items, fresh food distribution, shelter, protection in Kosovo), WFP and UNICEF (€4 million for an immunisation campaign and provision of furniture to schools in Kosovo).

ECHO has also helped fund operations by the Red Cross family, providing €16.7 million for the region (Albania, fYROM, Serbia, Montenegro and Kosovo) for essential relief items, hygiene parcels distribution, a public kitchen programme and schools rehabilitation.

The EU has also:

Supplied essential hardware and software for the identity cards provision, and offered similar support for the forthcoming election process;

Begun emergency repairs to Kosovo's transport infrastructure including:

• road patching
• bridge repair
• rehabilitation of the Kosovo Polje railhead (the crux of the Kosovar rail network) and providing international management to the rail network.

Delivered 22 snowploughs to help keep routes open across Kosovo during the winter.

Supplied an international management team to help run Kosovo's two main power stations and carried out repairs and supplied spare parts and vital chemicals for these power stations as well as the coal mine that supplies them.

Paid three months of salaries to some 10,000 workers in the power sector from September to November.

Agreed the provision of €20 million in February to cover the costs of buying in emergency electricity supplies during the frequent failures of Kosovo's own power supplies (one extremely old power plant Kosovo A was subject to frequent breakdowns during the winter months; the second Kosovo B was badly hit by a fire).

Made urgent repairs and supplied spare parts, vehicles and generators to the Kosovar water boards to improve the quantity and quality of the water supply. Mitrovica and Peje regions particularly targeted.

Committed funding to provide essential equipment and funding (€5 million) for the Kosovo Protection Corps (KPC).

Undertaken to make major repairs to Kosovo's landline telephone network, including the installation of a new transit facility of 5,000 trunks (extendable to 10,000) and a digital subscribers switch in Pristina.

Arranged to start providing computers, equipment and vehicles to key post offices.

Launched 40 village employment and rehabilitation projects, employing over 8,000 people.

Financed nearly 30 smaller-scale operations to support Kosovars' own reconstruction efforts from setting up cultural centres to providing computer and language training.

Helped refurbish the main building of Mitrovica hospital including structural, heating and electrical works.

Agreed to set up a Municipal and Local Investment Fund for social and infrastructure rehabilitation.

Seconded 27 experts in municipal administration to work for the UNMIK civilian administration in Kosovo. A further 22 will follow shortly.

Through its contribution to UNMIK (fourth pillar - economic reconstruction), the EU has:

Created a joint Economic Policy Advisory Board and taken responsibility for jointly (Kosovo and internationally) staffed administrative departments of Reconstruction, Central Fiscal Authority, Trade and Industry and Utilities.

Established a customs service for Kosovo with the support of a team of international experts funded by the EU. This is performing a vital function providing Kosovo with its first self-generated income and helping it to stand, eventually, on its own financially. It had already collected some DM 30 million by December.

Put in place the institutional and legislative framework for public sector finances, the Kosovo Consolidated Budget, allowing for collection of domestic revenues and expenditures through the spending departments, at central government level, and at municipal level.

Put in place the framework for the development of a flourishing banking system in Kosovo, allowing the establishment of the first commercial bank, Micro-Enterprise Bank (MEB), to help get Kosovo's small businesses going again. The commercialisation of the socially owned sector is also beginning.

Co-ordinated a major donor effort to ensure electricity supplies throughout the winter and the long term refurbishment of the power stations over the coming summer.

Organised the rehabilitation of Kosovo's water supply and sanitation infrastructure.

Played a major role at the two Donor Conferences (July and November 1999) maximising the effectiveness of pledges through prioritising of reconstruction and development requirements.

Money Matters

The European Union is, by far, the single biggest donor of assistance to Kosovo and the Western Balkan region as a whole. Since 1991, not counting contributions of member states, the European Union has provided more than €4.5 billion to the region (not including Romania and Bulgaria). Contributions by Member States are estimated to be broadly the same again.

In 1999 the EU:

• Provided a total of €505 million for people throughout the region affected by the Kosovo crisis. €378 million was in humanitarian aid to the region as a whole - €101.7 million of which was for Kosovo itself.
• €127 million of this total was specifically for reconstruction assistance within Kosovo, plus €7.7 million from 1998. Of this €65.7 million had been contracted and €34.1 million paid as at 6 March 2000.
• Exceptional financial assistance of €5 million was delivered to UNMIK in December 1999 following an urgent appeal for budgetary support by Mr Bernard Kouchner, Special Representative of the UN Secretary General, in October 1999.

Assistance to Kosovo's Consolidated Budget: Kosovo needs substantial external assistance for its budget which was drawn up by the EU-led Pillar 4 of UNMIK - in order to establish a sound market economy and a civil administration.

€80 million was pledged by the international community in budgetary assistance to Kosovo for 2000 towards a total budget of some €110 million.

The EU pledged €35 million, by far the largest contribution; and in early February it increased its contribution by an extra €10 million to €45 million, following an urgent appeal from Mr Kouchner (Special Representative of the UN Secretary General).

Of this sum, the Commission delivered €10 million to UNMIK in the first week of March; a further €20 million will arrive before the end of March; and the remaining €15 million in the summer. Payments are staggered to reflect UNMIK cash flow and for accounting purposes. Budgetary assistance finances Kosovo's budget and is used, for example, to pay teachers, doctors and other public sector workers in Kosovo.

Up to €360 million will be available for the year 2000. The Commission will return to the budgetary authority to request additional funds for this year if necessary.

This money is essential for the reconstruction effort, and laying the foundations for a viable economy is vital for Kosovo's long term future.

A more detailed breakdown of the EU's financial contribution is attached in the table below.

The Challenge of Kosovo: Overview of the EU's financial contributions

General Overview

Reconstruction assistance implementation (06 March 2000):

Humanitarian assistance in response to the Kosovo crisis 1999:

(1) Exceptional targeted support for public services was provided to UNMIK in 1999 (€5 million).

(2) Exceptional targeted support for public services was provided to UNMIK in February 2000 (€10 million) as well as funds for the purchase of electricity in February 2000 (€20 million).

(3) Allocation = budgetary provision; commitment = financial accounting of amounts for specific projects/programmes.

Contracted = implementation of commitments via contracting of services, goods.

Payments = implementation of contracts via payments made to either contractors or UNMIK.