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[Senate Hearing 110-629]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 110-629

               KOSOVO: THE BALKANS' MOMENT OF TRUTH?

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              MARCH 4, 2008

                               __________

       Printed for the use of the Committee on Foreign Relations

                   Available via the World Wide Web:
              http://www.gpoaccess.gov/congress/index.html

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45-608 PDF                 WASHINGTON DC:  2008
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                COMMITTEE ON FOREIGN RELATIONS          

           JOSEPH R. BIDEN, Jr., Delaware, Chairman          
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 GEORGE V. VOINOVICH, Ohio
BARACK OBAMA, Illinois               LISA MURKOWSKI, Alaska
ROBERT MENENDEZ, New Jersey          JIM DeMINT, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
              Antony J. Blinken, Staff Director          
       Kenneth A. Myers, Jr., Republican Staff Director          

                             (ii)          

                            C O N T E N T S

                              ----------                              
                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator From Delaware...........     1

Bugajski, Janusz, Director, New European Democracies Project, 
  Senior Fellow, Europe Program Center for Strategic and 
  International Studies, Washington, DC..........................    26

      Prepared statement.........................................    29

Fried, Hon. Daniel, Assistant Secretary of European and Eurasian 
  Affairs, Department of State, Washington, DC...................     7

      Prepared statement.........................................     9

Lugar, Hon. Richard G., U.S. Senator From Indiana................     3

Serwer, Daniel, Vice President for Peace and Stability 
  Operations, U.S. Institute of Peace, Washington, DC............    31

      Prepared statement.........................................    34

Vejvoda, Ivan, Executive Director of The Balkan Trust for 
  Democracy, Washington, DC......................................    36

      Prepared statement.........................................    38

Voinovich, Hon. George, U.S. Senator From Ohio...................     4

                                Appendix

              Additional Material Submitted for the Record

Prepared Statement of Hon. John Barrasso, U.S. Senator From 
  Wyoming........................................................    55

Remarks of Vuk Jeremic, Minister of Foreign Affairs of the 
  Republic of Serbia, Before the Committee of the European 
  Parliament, Strasbourg, February 20, 2008......................    55

                                 (iii)

 
                 KOSOVO: THE BALKANS' MOMENT OF TRUTH?

                              ----------                              

                         TUESDAY, MARCH 4, 2008

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:40 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Joseph R. 
Biden, Jr. (chairman of the committee) presiding.
    Present: Senators Biden, Boxer, Cardin, Lugar, and 
Voinovich.

        OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR.,
                   U.S. SENATOR FROM DELAWARE

    The Chairman. Welcome, everyone. To state the obvious, 
today's hearing is on Kosovo.
    Kosovo's status has been the last major challenge left 
after the dissolution of Yugoslavia. The country's legal limbo 
up to now has meant that people had no prospect of securing 
foreign investments required to rebuild their economy, or a 
political foundation on which to rebuild their society.
    For years, the United Nations tried to broker an agreement 
on Kosovo's independence. Unfortunately, Serbia and its Russian 
patron rejected a plan that would have guaranteed Kosovo 
supervised independence and provided powerful protections for 
the Serb minority.
    Not once during the 2 years of negotiations on Kosovo's 
future did Serbia make a case for how continuing Serb 
sovereignty over the province would improve the lives of the 
ethnic Albanians, who make up 90 percent--90 percent--of 
Kosovo's population.
    In the modern world, sovereignty isn't an ancestral right; 
it's a sacred trust between a government and its people. 
Slobodan Milosevic violated that trust when he tried to 
ethnically cleanse Kosovo. And subsequent Serb governments, in 
my view, have done nothing to reestablish it. Belgrade only 
wanted to hang on to Kosovo, not the Kosovars who live there.
    We live in a world where history matters, but so do human 
beings. Kosovo could not remain a territorial souvenir of 
Serbia's past imperial glory. So while resolving Kosovo's 
status through a unilateral declaration of independence is 
hardly ideal, I believe it was necessary. I am proud the United 
States was among the first countries in the world to recognize 
the newly independent Kosovo.
    Kosovo's new government has to protect the magnificent 
heritage of Serbia's past, but we must help safeguard Kosovo's 
future. Kosovo's democratically elected government has agreed 
to strong protections for Kosovo's ethnic minorities, and 
initiated a series of conciliatory contacts with Kosovo's 
Serbs. The people of Kosovo are demonstrating what type of 
country they want to create. If they succeed, Kosovo will 
prosper.
    It won't be easy. Kosovo is struggling with epic levels of 
unemployment, widespread corruption, and continuing ethnic 
tensions. But the country possesses significant energy 
reserves, a young population, and the makings of the world's 
most pro-Western majority Muslim democracy.
    If its people continue protecting human rights and 
combating corruption, Kosovo's leaders will deserve our strong 
support. And as they work to fulfill their destiny and join the 
community of nations and international institutions, we should 
be helpful. Ideally, we could offer enthusiastic support for 
Serbia's Euroatlantic ambitions, as well. Belgrade should be 
setting the pace by which other countries in the Balkans 
measure their progress in joining the European Union and NATO.
    Instead, Serbs have been victimized by leaders who, to 
misquote Abba Eban, ``never miss an opportunity to miss an 
opportunity.'' Instead of proceeding boldly toward Europe, 
leaders in Belgrade have hunkered down for a last stand amid 
the ruined policies of the recent past.
    I am particularly disappointed by the actions of the 
Serbian Government officials who came to office, having ousted 
a tyrant, but have now resorted to the same tactics and tirades 
they once opposed. Prime Minister Kostunica's continuing 
refusal to call for the arrest of fugitive war criminals, and 
his opposition to signing a Stabilization and Association 
Agreement with the European Union, have severely undermined 
Belgrade's international standing. Other Serb leaders have been 
less flagrant in their actions, but have still failed to take 
the tough stands that would allow their country to move 
forward. The violence that followed Kosovo's declaration of 
independence was predictable, was the preventable result of 
those individuals stoking fires of public rage, and then 
abdicating responsibility for the consequences. Serbia's 
Government should stop using Kosovo's independence as an excuse 
to inflict more damage on their wounded nation.
    It should start to turn the page on its foreign policy of 
the last 15 years and pursue a future as part of Europe. We 
cannot allow the dysfunction gripping Belgrade to spread to 
Kosovo and Bosnia. Americans, Europeans, and other 
international partners have invested too much in those 
countries to see their democratic ambitions thwarted.
    Any attempt by Belgrade to sow chaos in Northern Kosovo or 
Bosnia's Republika Srpska should be dealt with quickly and 
decisively by the European Union and NATO. Serbia's actions 
should also factor in the decision of foreign investors who are 
considering projects in their country.
    For 8 years now, the people of Kosovo, and the region have 
struggled to build their economy and societies on a foundation 
of uncertainty. Today, we have an opportunity to remove that 
veil of doubt. Europeans and Americans should be wary of calls 
for hasty disengagement from the region, now that Kosovo is on 
its own.
    Tensions will continue to run high during the next few 
months. Even under ideal circumstances, maintaining stability 
in the Balkans will require significant infusion of development 
aid, peacekeeping, and robust diplomacy. And I look forward to 
hearing from the witnesses today and how the United States 
plans to support Kosovo in the challenging days and weeks 
ahead.
    We should recognize Kosovo's independence for the milestone 
that it is. Managed deftly, it will remove the last major 
stumbling block standing between the Balkans and a peaceful and 
prosperous future.
    I now yield to Senator Lugar. Chairman Lugar.

              STATEMENT OF HON. RICHARD G. LUGAR, 
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you very much, Mr. Chairman. I join 
you in welcoming our distinguished witnesses.
    The February 17 declaration of independence by Kosovo is an 
important step toward putting the violence and unstable history 
of the Balkans in the past. But our work there is certainly not 
done.
    The United States and our allies must support the 
integration of Kosovo into international and Euroatlantic 
institutions. We must also be prepared to work closely with 
Serbia and assist with their goals of joining the European 
Union and engaging European institutions. In my view, lasting 
stability and security in Southeastern Europe requires the 
military, economic, and political integration of emerging 
democracies into existing European structures.
    An international mission led by the European Union will 
take over from the United Nations as the leading civilian 
mission in Kosovo. The goal must be the creation of a 
functioning democracy and free market economy based on the rule 
of law.
    I am hopeful that the United States and the European Union 
have the infrastructure in place to secure a peaceful outcome 
in the region, and to protect the minorities living in Kosovo, 
as well as their property and cultural heritage. We must not 
permit social unrest or interethnic violence to reemerge in the 
Balkans. The Transatlantic Community bears a special 
responsibility to prevent acts of violence, such as those that 
occurred in 2004 when minorities were attacked and churches and 
homes were vandalized and burned.
    This has been a difficult process for Serbia and the 
Serbian people, but this in no way justifies the events 
surrounding the attack on the U.S. Embassy in Belgrade. The 
absence of significant Serbian security forces to protect 
international diplomatic facilities is inexcusable. The 
President and the Prime Minister of Serbia are responsible for 
ensuring that the events of February 21 are never repeated.
    Despite the events surrounding the attack on the U.S. 
Embassy, NATO and the European Union must stand ready to 
accelerate engagement and consider membership in the 
transatlantic institutions upon Belgrade's fulfillment of its 
obligations to the International Criminal Tribunal for the 
former Yugoslavia. Serbia's entry into NATO's Partnership for 
Peace program was an important step.
    The international community must remain committed to the 
full and complete implementation of the Ahtisaari Plan. The 
United Nations Special Envoy, Martti Ahtisaari, describes his 
proposal as, ``A foundation for a democratic and multiethnic 
Kosovo, in which the rights and interests of all members of its 
communities are firmly guaranteed and protected by institutions 
based on the rule of law.''
    Last week I offered a resolution expressing the Senate's 
strong support for the North Atlantic Treaty Organization to 
extend invitations for membership to Albania, Croatia, and 
Macedonia at the April 2008 Bucharest Summit. The so-called 
Adriatic Three will play an important role in preserving peace 
and stability in Southeastern Europe.
    These countries occupy critical geostrategic locations, and 
are well-suited to deter efforts to destabilize the region 
through violence. NATO membership for these countries would 
continue to extend the zone of peace and stability into a 
critical region that has been encumbered by conflict.
    I am hopeful the United States, NATO, and the European 
Union have the wisdom and endurance to see this process through 
to an outcome that contributes to the security of Europe, and 
lifts a region and its people toward greater security and 
prosperity.
    I thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    One of our colleagues has done a great deal of work in this 
area of the world and has a keen interest in this subject. I'd 
like to give him an opportunity to make an opening statement.
    Governor.

              STATEMENT OF HON. GEORGE VOINOVICH, 
                     U.S. SENATOR FROM OHIO

    Senator Voinovich. Thank you very much, Mr. Chairman. 
You've been very generous with your time and the conversations 
we've had over the last several years about this situation 
there.
    As you know, Southeast Europe is near and dear to my heart. 
I have spent many hours in meetings, hearings, and briefings 
related to the area, and have traveled to the area frequently, 
perhaps more than any member of this committee.
    Like many of us here today, it's been my hope to see all of 
the countries of Southeast Europe live peacefully together, 
integrated fully under the umbrella of the NATO security 
framework and the European Union. It's my strong belief that by 
uniting all the countries of the former Yugoslavia under the 
same economic and security framework, we can bring lasting 
stability and peace to that part of the world, which has been 
in turmoil for a good part of its history.
    During my time in the Senate Foreign Relations Committee, I 
have worked very hard to promote that agenda. And I've been 
focused on Kosovo, because of the status process, and because 
of my fear that Kosovo--if not handled properly--will return 
that part of the world to violence and instability, and prevent 
the peace we all hope for from coming true.
    I'm sure that Ambassador Fried is getting tired of seeing 
me and hearing this speech, because he and I have had countless 
conversations over the last 4 years on these very issues.
    Mr. Ambassador, I want to take this opportunity to thank 
you for being so generous with your time. You have spent a lot 
of time briefing me on the issue, and it's been important for 
me to know that it is on your front burner.
    I believe strongly that the most important thing for the 
region today is to preserve stability, prevent a return to 
violence, and keep Southeast Europe on track to integration 
with NATO. While I supported an outcome on the status of 
Kosovo, based on mutual agreement between Serbia and Kosovo, 
and the support of the U.N. Security Council, and was very 
disappointed that it did not occur, I believe it is fundamental 
that the region stay on the path of full integration and peace.
    I believe that it is crucial that all sides reject violence 
and other forms of provocations that could endanger that goal 
or send the region into a full-blown economic and security 
crisis.
    Today, the Serbian people are very upset and angry. But the 
majority of the people have not expressed their emotions 
through aggression or violence. They are protesting peacefully, 
and adhering to a commitment to civility and human rights. 
Although, I agree with the chairman and others of our 
disappointment with the burning of the U.S. Embassy, and I 
think that the leadership there should have anticipated that 
something like that could have happened, and should have been 
more on the ball.
    In the south, there are many enclaves of Kosovar Serb 
communities. The Serbs do not appear to be leaving in a mass 
exodus, which many feared. They are definitely unsure of their 
future, but they're not leaving, and I hope they don't. For the 
Serbs to leave Kosovo would be a tragedy, and we must do 
everything in our power to encourage them to stay, and 
discourage Belgrade from interfering in their lives.
    Frankly, I'm very disappointed that Belgrade discouraged 
them from participating in the Kosovo Government for the last 
several years. But in order to see any level of progress in 
Kosovo and the rest of the region, we must work now to make 
serious gains in trust of Kosovo's Serb populations and other 
minorities.
    The time is now, and it will be lost if it is not seized in 
extraordinary ways by the Kosovar Government, at the heavy and 
constant urging of the United States and the European Union. 
The Kosovar Government needs to act immediately to implement 
the promises in the Ahtisaari Agreement, and we need to 
pressure them to do so. Because of the leading role the United 
States played in Kosovo, we have a primary responsibility of 
making sure the agreement is implemented, and the 
infrastructure is in place to support it.
    We must see concrete, extraordinary actions to show the 
Kosovar Serbs and other minorities that they can live 
peacefully in Kosovo without any physical harm or fear of 
discrimination. We need to see real actions to implement a plan 
for bringing back refugees and internally displaced people who 
are not likely to return, unless they know they will be settled 
in places where they can have actual jobs, and access to 
hospitals, police, and freedom to move about without KFOR 
protection, which is still the case in some parts of Kosovo.
    We need to see real actions to stand up a fair judiciary 
system that is capable and willing to prosecute criminals who 
commit ethnic violence and crimes, showing minorities that 
attempts to attack them will be punished swiftly. It's 
outrageous that there are still criminals from the violent 
attacks of March 2004 who still have not been brought to 
justice and punished.
    And we need to see real action to establish the protective 
zones around Serbian Orthodox Churches, per the agreement, and 
to provide physical security where needed based on the request 
of the churches. We need to see real actions by the Kosovo 
Government to show minorities that they are going to have a 
chance at a life in Kosovo, because that is key to making 
Kosovo work in the long run, and key to their acquiring the 
respect of the international community and all the benefits 
that go with true independence, which they desperately want.
    And because the United States and the European Union have 
played such a large role in the creation of Kosovo, it's our 
responsibility to make sure it happens.
    In spite of my urging to let the Europeans take the 
leadership on the discussion on the future of Kosovo, the 
United States has been at the forefront of the movement for 
Kosovo's independence, as so eloquently stated by the chairman 
of this committee. And we must be in the forefront of making it 
work for everyone, and insisting that the European Union 
fulfill its obligations under the Ahtisaari Agreement.
    In a final comment, I believe we need to recognize how 
difficult this experience has been for the people of Serbia. 
This is emotional and traumatic for the country, and shouldn't 
be written off lightly by our country.
    And with your permission, Mr. Chairman, I'd like to insert 
in the record the full written statement by Vuk Jeremic, the 
young new Foreign Minister of Serbia, whom I have known and 
respected for many years, and was a leader in the young Otpor 
group that defeated Slobodan Milosevic at the polls and sent 
him on his way to The Hague. This is an outstanding young man, 
who is now their Foreign Minister.
    It is clear that our Nation's friendship and relationship 
with Serbia will not be repaired overnight, but we must stay 
focused on the goal of repairing it, which is in our mutual 
interest. I say this to the administration and my colleagues 
here today, as well as to my friends in the Serbian diaspora 
and Serbia; we cannot forget the importance and value of the 
United States/Serbia friendship.
    We must do everything in our power to heal the wounds 
created by the outcome in Kosovo and to avoid making them 
deeper or irreparable. We must look to the future and remember 
our shared goals and values as friends, looking to the brighter 
days ahead of us, and sustaining the bridges that will get us 
there, for ourselves, for stability in Southeast Europe, and 
peace in the world.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator.
    Our first witness today is the Honorable Daniel Fried, 
Assistant Secretary of State for European and Eurasian Affairs. 
Ambassador Fried is a career Foreign Service officer. He's held 
very prominent positions in both Democratic and Republican 
administrations. He's currently acting Under Secretary for 
Political Affairs, following Nick Burns's departure.
    I welcome him today, and look forward to his testimony.

STATEMENT OF HON. DANIEL FRIED, ASSISTANT SECRETARY OF EUROPEAN 
   AND EURASIAN AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Fried. Thank you, Chairman Biden, Ranking Member Lugar, 
members of the committee. And thank you for the opportunity to 
discuss Kosovo.
    We stand today at the end of one of Europe's most tragic 
episodes, the violent breakup of Yugoslavia. Kosovo's 
declaration of independence concluded that agonizing process, 
but opens a new chapter. It brings Europe closer to the goal of 
being whole, free, and at peace, but brings new challenges. Our 
work there is not done.
    As you saw on television 2 weeks ago, emotions have run 
high over this issue in Serbia. Serbia strongly opposes 
Kosovo's independence. We have understood this and are trying 
to reach out to Serbia. This makes the mob attack on our 
Embassy and other embassies in Belgrade all the more 
disgraceful.
    The role of some of Serbia's leaders in that violence is 
not clear and may never be. But beyond doubt, some Serbian 
leaders incited the population, creating the environment of 
hostility that led directly to the attack. We hold the Serbian 
Government responsible for what happened on February 21, as 
well as for future such incidents. I remind the Serbian 
authorities of their responsibilities to provide for the 
security of the embassies under the Vienna Convention.
    Within Kosovo, we have also witnessed provocations and even 
Serbian incitement of violence. Serbs and anyone else have the 
right to protest Kosovo's independence, but there is no right 
of violence or intimidation. We urge leaders throughout the 
region to show responsibility. The United States opposes, and 
will continue to oppose, attempts to partition Kosovo.
    The choices we've faced with Kosovo were limited, and we've 
made the best of them. It's important to recall how we got here 
to understand how we go forward.
    The breakup of Yugoslavia was nonconsensual and exceedingly 
violent. It started when Slobodan Milosevic became a dictator. 
His aggressive nationalism tore apart the country. In Kosovo, 
Milosevic first instituted an apartheid-like system of Serbian 
ethnic rule, stripping Kosovo of its autonomy within 
Yugoslavia. And initially, marginal resistance in Kosovo grew, 
propelled by these tactics.
    By the end, Milosevic's actions were savage. Entire 
villages were shelled, civilians were executed, families were 
massacred, hundreds of thousands of civilians were deported or 
forced to flee.
    In 1999, NATO took action, and Milosevic capitulated. In 
June 1999, the U.N. Security Council adopted Resolution 1244, 
which suspended Belgrade's rule of Kosovo, placed Kosovo under 
interim U.N. administration, and authorized a NATO-led 
peacekeeping force to provide for a secure environment. That 
resolution also envisioned a political process to determine 
Kosovo's future.
    Kosovo, under U.N. administration, made progress but its 
unresolved status cast a dark shadow. The U.S. administration 
sought a diplomatic solution. In early 2006, with U.S. support, 
the U.N. appointed former Finnish President Martti Ahtisaari as 
Special Envoy, with a mandate to negotiate Kosovo's final 
status.
    After 14 months, President Ahtisaari concluded that the 
parties were deadlocked. He presented to the Security Council a 
plan which recommended that Kosovo become independent, but 
subject to a period of international supervision, and included 
detailed and extensive measures to protect Kosovo's non-
Albanian communities, especially the Serbian community.
    Kosovo's leaders accepted this compromise. Serbia's leaders 
did not. An overwhelming majority of U.N. Security Council 
members agreed with his recommendation, as did most states in 
Europe. The administration and our European allies did all we 
could to secure U.N. Security Council endorsement of the 
Ahtisaari Plan, but were blocked by Russia.
    We supported one last effort to negotiate a solution, the 
so-called Troika of European Union, United States, and Russian 
negotiators. And our mission ended last December, also without 
success.
    The people of Kosovo understandably refuse to endure 
perpetual uncertainty. On February 17, they brought closure to 
this issue by declaring Kosovo to be an independent and 
sovereign state. In response, the United States and key 
European allies have recognized Kosovo's independence.
    The decision to recognize Kosovo was necessary. The reality 
was clear. Serbia was never going to rule Kosovo again. U.N. 
administration was never meant to be a long-term solution.
    From this point, the people of Kosovo have the 
responsibility to create a state that meets the standards of 
the democratic community of nations. Kosovo committed in its 
declaration of independence to fully implement its obligations 
under Ahtisaari, which contains broad safeguards for 
minorities, especially the Serbian community; a plan for the 
decentralization of government; constitutional guarantees for 
all citizens; and the protection and promotion of cultural and 
religious sites, particularly those of the Serbian Orthodox 
Church in Kosovo.
    Since independence, I can report that Kosovars have moved 
swiftly to implement their Ahtisaari obligations. The Kosovo 
Assembly has passed, in one of its very first sessions, nine 
key Ahtisaari-related laws. Kosovo has prepared a draft 
constitution we believe fully consistent with the Ahtisaari 
Plan.
    Prime Minister Hashim Thaci and President Fatmir Sejdiu 
have reaffirmed repeatedly and publicly their commitment to all 
aspects of the Ahtisaari package. Prime Minister Thaci has 
appointed two ethnic Serbs to his Cabinet.
    With its consent, Kosovo will be supervised for a period 
ahead by an International Civilian Office, primarily a European 
undertaking, but with strong U.S. participation. The United 
States will cover 25 percent of this office's operating costs, 
and the deputy will be a Senior U.S. Foreign Service officer.
    The European Union is deploying a Rule of Law Mission to 
Kosovo, with around 1,900 international staff and over 1,000 
local staff, the largest such endeavor the European Union has 
ever undertaken. NATO, in its KFOR mission, will continue to 
provide security on the ground, authorized under U.N. Security 
Council Resolution 1244.
    With our assistance, and the support of the World Bank and 
IMF, Kosovo will be viable. It has massive lignite coal 
reserves, and a young, motivated population yearning to join 
the European family. The United States will participate in a 
major donors' conference planned this summer. Kosovo will also 
require support across the board as it establishes institutions 
of good governance.
    Thankfully, and with the help of many--with the help of 
this committee, the United States has learned much since 1989 
about how to help post-Communist countries who choose the path 
of reform.
    I want to address how Kosovo's independence affects 
relations with Serbia and Russia.
    Serbia has every right to participate in providing for the 
welfare of Serbs in Kosovo, as provided in the Ahtisaari Plan. 
But Serbia must put aside politics of nationalism. In the end, 
Serbia faces the choice of whether to move toward Europe or 
self-imposed isolation.
    Russia was a close part of the diplomatic efforts on Kosovo 
and closely involved in the Ahtisaari process, including the 
plan to provide protection from the Serbs in Kosovo. We urge 
Russia to explicitly call for calm and responsibility in ways 
that will be heard unambiguously by Serbia and by the Serbs in 
Kosovo and Bosnia and Herzegovina.
    Let me address concerns that independence for Kosovo sets a 
precedent for other separatist conflicts. In our view, it 
simply does not. Kosovo's independence is the result of the 
breakup of Yugoslavia into many successor nations. The Kosovo 
situation includes many a factor simply not found elsewhere, 
including this and the fact that Kosovo has been administered 
by the U.N. for 9 years.
    Let me urge, in particular, the leaders of Bosnia and 
Herzegovina to remember that their country's future lies with 
Europe. The constitutional structure of Bosnia needs improving, 
and the United States and European partners support the 
improvement, but not the apparition of the Dayton 
arrangements--and this, only through negotiations, not threats 
or ultimatums. We are prepared to work cooperatively with the 
leaders of the Bosnian-Croat Federation, Republika Srpska, and 
Bosnia and Herzegovina as a whole, on this basis.
    The United States and our European allies have done and 
will do all within our power to bring a sustainable solution to 
the Kosovo challenge. In Kosovo, as with other Yugoslav 
problems, the United States did not have a choice among risk-
free options, but I believe that the path we took was the right 
one.
    Mr. Chairman, I look forward to your questions.

    [The prepared statement of Mr. Fried follows:]

 Prepared Statement of Hon. Daniel Fried, Assistant Secretary of State 
 for European and Eurasian Affairs, Department of State, Washington, DC

    Chairman Biden, Ranking Member Lugar, members of the committee, 
thank you for giving me the opportunity to discuss Kosovo. We stand 
today at the end of one of Europe's most tragic episodes: The violent 
breakup of the former Yugoslavia. Kosovo's declaration of independence 
on February 17 concluded the agonizing, years-long process of that 
nation's disappearance.
    Kosovo's declaration of independence ends one chapter but begins 
another. We must deal with short-term challenges of security and longer 
term challenges of Kosovo's development. These are serious. Many things 
can go wrong and some things probably will. But the status quo was 
unsustainable; and seeking to sustain it would have led to even greater 
challenges.
    Kosovo's independence brings Europe closer to the goal of being 
whole, free and at peace. Three American Presidents--Presidents George 
W. Bush, Bill Clinton, and George H.W. Bush--articulated and advanced 
the strategic objective of helping Europe become whole, free, and at 
peace. Kosovo is one of the last unresolved problems preventing 
completion of this goal.
    Now, as you saw on television 2 weeks ago, emotions have run high 
over this issue in Serbia. Serbia strongly opposed Kosovo's 
independence. We have understood that, and have tried to reach out to 
Serbians diplomatically during what has been a painful period for them.
    This makes the mob attack on our Embassy and other Embassies in 
Belgrade all the more disgraceful. What happened was reprehensible and 
some Serbian authorities bear full responsibility. The role of some of 
Serbia's leaders in the mob violence against our Embassy and other 
Embassies in Belgrade is not clear and may never be. But beyond doubt, 
some Serbian leaders incited the population with nationalist rhetoric, 
creating the environment of hostility that led directly to the attack. 
We therefore hold the Serbian Government responsible for what happened 
on February 21 as well as for any future incidents. I want to use this 
forum, as I have used others, to remind the Serbian authorities of 
their responsibilities to provide for the security of embassies under 
the Vienna Convention.
    Within Kosovo, there has also been Serbian incitement to violence. 
Serbs and anyone else have the right to protest Kosovo's independence. 
But there is no right of violence or intimidation. Attacks in northern 
Kosovo on international personnel have occurred. They are unacceptable. 
So are statements that provoke or condone such violence. We ask leaders 
throughout the region to show responsibility.
    The choices we had with Kosovo were limited, and we made the best 
of them. It is important to recall how we got to Kosovo independence to 
understand how we go forward.
    The breakup of Yugoslavia was nonconsensual and exceedingly 
violent. It started when Slobodan Milosevic became dictator of Serbia 
and started to bully the other constituent parts of Yugoslavia. In 
1989, he stripped Kosovo of the autonomy it had enjoyed within 
Yugoslavia. This sowed the seeds of the Kosovo conflict. Milosevic's 
tactics caused Slovenia to leave, to be followed by the other 
constituent republics, Croatia, Macedonia, Bosnia-Herzegovina, and 
Montenegro. Milosevic responded by instigating conflicts of varying 
intensity.
    Throughout the 1990s, Milosevic's constant stoking of nationalist 
flames wreaked havoc with Yugoslavia. So Yugoslavia no longer exists. 
Kosovo's declaration of independence was the final act of its 
dissolution.
    Milosevic policy toward Kosovo from 1989 to 1999 is a sad tale of 
destruction, even by the terrible standards of the Yugoslav wars. 
First, the Serbian dictator instituted an apartheid-like system of 
Serbian ethnic rule in Kosovo. Kosovo's ethnic Albanians, over 90 
percent of the population, endured systematic discrimination and 
dismissal from their jobs. At first, the people of Kosovo resorted to 
nonviolent resistance, hoping to avoid the horrors unleashed in nearby 
Bosnia and Croatia. When some of them turned to armed resistance, 
something the United States did not support, Milosevic's response was 
savage: Entire villages were shelled; civilians were executed; families 
were massacred. Refugees streamed into the mountains, unsheltered in 
the snow.
    Starting in 1993, the U.N. Security Council began to meet to 
discuss the situation in Kosovo and started issuing resolutions. By 
1999, the Council had issued no fewer than seven demanding a halt to 
massive human rights violations. The Milosevic regime ignored them all.
    Finally, in 1999, with the Government in Belgrade refusing to halt 
its ethnic cleansing in Kosovo despite an intensifying series of 
warnings, NATO's then-19 allies reached a unanimous decision to take 
collective action to remove Serbia's police and military forces from 
Kosovo.
    President Clinton and his European counterparts rightly decided 
that ethnic cleansing could not be allowed to continue. After 
exhaustive diplomatic efforts failed to end the violence, NATO launched 
an aerial bombing campaign against Milosevic's forces in March 1999. 
Milosevic responded with an unrestrained campaign of terror against 
Kosovo's civilians. By April, the U.N. was reporting 850,000 Kosovo 
Albanians had fled their homes, and this was a conservative estimate. 
Serb paramilitary groups organized pogroms and marched Kosovo Albanian 
citizens to train depots to be forcibly deported to Macedonia; these 
images and their reminders of an earlier period of ethnic crime in 
Europe were chilling.
    After 79 days of bombing, Milosevic capitulated. In June 1999, the 
U.N. Security Council adopted Resolution 1244, which suspended 
Belgrade's governance of Kosovo and placed Kosovo under interim U.N. 
administration. In that same resolution, the Security Council 
authorized a NATO-led peacekeeping force to provide for a safe and 
secure environment. From that time forward, Kosovo was administered by 
the United Nations under UNSCR 1244. The resolution also provided for 
local self government and envisioned a political process that would 
determine Kosovo's future. That process has now resulted in Kosovo's 
independence.
    This is something that needs emphasizing. Resolution 1244 removed 
Serbia from having any remaining role in governing Kosovo. That was 9 
years ago, which was already 10 years after Slobodan Milosevic first 
started his destruction of Kosovo. The vote for Resolution 1244 was 14-
0, with China abstaining but with Russia's full support.
    UNSCR 1244 specifically envisioned a U.N.-facilitated process to 
address Kosovo's future status, a way forward which the U.S. actively 
supported. Additionally, while 1244 sought an agreement between the 
parties, it did not require one. Its drafters did not rule out any 
possible options for status and the resolution itself even contemplates 
the possibility of independence as an outcome.
    The resolution also placed Kosovo, for a limited time, under 
international administration. After the war, Kosovo made progress under 
U.N. tutelage. Those whom Milosevic had expelled returned quickly to 
Kosovo. The U.N. helped the people of Kosovo build local governments, a 
Kosovo Assembly and a multiethnic police force. Bitterness and fear 
still pervaded much of Kosovo, but progress was made.
    Nevertheless, the unresolved question of Kosovo's status continued 
to cast a dark shadow. The administration has deliberately and 
systematically sought a diplomatic solution to this vexing question. We 
supported negotiations between the parties, which lasted 2 years.
    In early 2006, the United Nations appointed a respected European 
statesman, former Finnish President, Martti Ahtisaari, as Special Envoy 
with a mandate to negotiate a solution to the problem of Kosovo's final 
status.
    Ahtisaari worked intensively with the parties, discussing in 
particular a wide range of measures to protect Kosovo's minorities in 
general and the Serbian community in particular. They also discussed 
measures to enhance good governance, including decentralization of 
local government, protection of religious and cultural heritage, 
including Serbian sites in particular, and to promote economic 
development.
    After 14 months, in April 2007 Special Envoy Ahtisaari concluded 
that the parties were at an unresolvable impasse. In his view, no 
additional negotiations, no matter their duration, would be able to 
produce an agreement between the parties. Therefore, he presented to 
the U.N. Security Council his own recommendations for Kosovo's future 
status. His plan included a comprehensive set of measures to protect 
Kosovo's non-Albanian communities. He also recommended that Kosovo 
become independent subject to a period of international supervision. 
Kosovo accepted this compromise package; Serbia did not.
    An overwhelming majority of U.N. Security Council members agreed 
with his recommendation, as did all of the EU members who were on the 
UNSC at the time and most other states in Europe--the region most 
affected by new instability in the region. The administration did all 
it could last summer to try to secure U.N. Security Council endorsement 
of the Ahtisaari Plan. We believed that prompt Security Council action 
would send a positive message of global unity on this issue and pave 
the way for a smoother transition for Kosovo. The EU and United States 
desire to manage the Kosovo situation through the UNSC was stymied by 
Russia.
    In one last-ditch effort to explore every conceivable basis for a 
negotiated settlement, we then participated directly in an additional 4 
months of negotiations under the auspices of a Troika composed of the 
United States, the EU and Russia, a proposal made by French President 
Nicholas Sarkozy. This Troika--with Ambassador Frank Wisner as the U.S. 
representative--explored all imaginable status outcomes--including 
confederation, independence, and substantial autonomy--but no agreement 
between the parties was found.
    After the Troika talks ended last December 10, it became clear that 
the potential of negotiations to reach an agreement was exhausted. The 
central issue under discussion--whether Kosovo was ultimately ruled by 
Belgrade or Pristina--simply did not lend itself to compromise or 
splitting of differences.
    Russia's position was that no solution was possible without 
Serbia's consent. Serbia made clear that no proposed solution without 
Serbian sovereignty over Kosovo would have Belgrade's support.
    The people of Kosovo understandably refused to endure perpetual 
uncertainty about their future political status.
    On February 17, they brought closure to this issue themselves by 
declaring Kosovo to be an independent and sovereign state. In response, 
the United States and its key European partners coordinated our action 
and recognized Kosovo's independence, in line with the recommendations 
of U.N. Special Envoy Ahtisaari.
    Since independence, the Kosovars have moved swiftly to implement 
their Ahtisaari obligations. The Assembly passed in one of its very 
first sessions nine key Ahtisaari laws on issues including the 
protection of minorities, diplomatic immunities, police, and local 
self-government. Additional laws are in various stages of drafting. 
Kosovo has prepared a draft constitution that we believe is fully 
consistent with the Ahtisaari Plan and could be approved within weeks. 
Prime Minister Hashim Thaci and President Fatmir Sejdiu have reaffirmed 
repeatedly their commitment to all aspects of the Ahtisaari package. 
Prime Minister Thaci has appointed two ethnic Serbs to his Cabinet. One 
has been placed in charge of the sensitive portfolio of Labor and 
Social Welfare. The Government also has pledged repeatedly to develop 
good neighborly relations with Serbia. The Kosovar leaders have 
consistently reached out to the Serbian community in Kosovo and to 
Serbia.
    The decision to recognize Kosovo's independence was not taken 
lightly. But it was the only responsible decision to take. The reality 
was clear: Kosovo was never going to be ruled by Serbia again. The 
status quo in Kosovo was unsustainable and undesirable. Although UNMIK, 
the interim U.N. mission in Kosovo, had done much to help Kosovo 
recover from war and build democratic institutions, the U.N. 
administration was never meant to be a permanent or even long-term 
solution for Kosovo. While in the limbo of U.N. administration, Kosovo 
has been unable to access loans from international financial 
institutions, or attract much-needed foreign direct investments. 
Uncertainty deters investors and businessmen. U.N. rule retarded 
development of responsible Kosovo institutions. If left unaddressed, 
Kosovo would have turned into an incubator for frustrations, extremism, 
and instability, which would then threaten to infect all of southeast 
Europe.
    So the United States and our key European allies--the U.K., France, 
Germany and Italy--working with EU, made the decision to move forward.
    The people of Kosovo have their independence. From this point, they 
have the responsibility, though with our help, to create a state that 
meets the standards of the democratic community of nations: We seek a 
Kosovo that is a functional, multiethnic society with strong, 
functioning institutions and respect for the rule of law. Kosovo's 
leaders have made a good start in their declaration of independence. In 
that critical document, Kosovo undertook serious and comprehensive 
commitments, including pledges to achieve the highest standards of 
democracy, including freedom and tolerance and justice for citizens of 
all ethnic backgrounds. As President Bush said, ``These are principles 
that honor human dignity; they are values America looks for in a 
friend.''
    Kosovo also committed in its declaration of independence to 
implement fully its obligations under the Ahtisaari Plan. We believe 
this is essential. The Ahtisaari Plan contains broad safeguards for 
minorities, especially the Serbian community; a plan for the 
decentralization of government to empower minority communities; 
constitutional guarantees for all citizens; and the protection and 
promotion of cultural and religious heritage, particularly that of the 
Serbian Orthodox Church in Kosovo.
    Principles of democracy and multiethnicity must be realized in 
practice. And we cannot expect Kosovo to achieve what it seeks without 
support and guidance. We welcome therefore that Kosovo has invited 
international entities and organizations to supervise its 
implementation of the Ahtisaari Plan and help Kosovo meet these 
principles.
    With its explicit consent, Kosovo will be ``supervised'' for a 
period ahead by an International Civilian Office (ICO). This will 
primarily be a European undertaking, but with strong U.S. 
participation. In late February, a newly formed International Steering 
Group for Kosovo appointed Pieter Feith to be the International 
Civilian Representative for Kosovo to head the ICO. In this capacity, 
Mr. Feith will possess certain executive powers to ensure the Ahtisaari 
Plan is fully implemented.
    In addition to mandating rights and protections for ethnic 
minorities and safeguarding cultural and religious heritage, the 
Ahtisaari Plan also: (a) Promotes sustainable economic development with 
attention to property claims, privatization, restitution, and debt 
management; and (b) requires a security sector that is democratic, 
professional, and multiethnic. The International Civilian 
Representative has ultimate authority to supervise implementation of 
all aspects of the plan. He can void laws and regulations and sanction 
and remove officials if necessary.
    The ICO deputy will be a senior U.S. Foreign Service officer and 
the U.S. also will second a number of other State Department staff and 
contractors to the operation. The U.S. will cover 25 percent of ICO 
operating costs, with the remainder coming from contributions from the 
EC, and other states.
    The EU will deploy a rule-of-law mission, called ``EULEX,'' to 
Kosovo, with around 1,900 international staff and around 1,100 local 
staff. This multiyear mission will be the largest such endeavor the EU 
has ever undertaken. Its mission will include support and training for 
the Kosovo police and judicial system. The administration has made a 
political commitment to participate in this European Security and 
Defense Policy mission. The EU will bear the brunt of the 190 million 
euro annual operating cost of the mission as well as additional 
personnel costs.
    NATO, through KFOR, has continued to provide security on the 
ground. It remains authorized to operate in Kosovo so long as UNSCR 
1244 remains in force. We expect that NATO will also play a key role in 
the establishment of a new Kosovo Security Force and a civilian agency 
to oversee it. Kosovo is eager to contribute to NATO, the organization 
that intervened to save the people of Kosovo during their darkest hour.
    These three institutions--The ICO, EULEX, and KFOR--will help put 
Kosovo on the right trajectory: Toward Europe and away from the Balkan 
cycle of dictatorship, nationalism, and war.
    Is Kosovo viable? It may not be a strong country now, but with our 
assistance, and the support of the IBRD and IMF, Kosovo will be viable. 
It has massive lignite coal reserves. It has a young, motivated 
population, yearning to join the European family. GDP and tax revenue 
this year have exceeded Kosovo's own ministries' expectations as well 
as the international community's estimates. We need, however, to focus 
international resources on realizing the economic potential of Kosovo's 
industrious people.
    To do this, the United States will participate in a major donors' 
conference this summer. Although Europe will contribute the majority of 
assistance to Kosovo, the United States and other international 
partners will play a role to lift Kosovo out of the economic stagnation 
of the last decades.
    We anticipate that EU and its Member States will provide roughly 50 
percent of the assistance that Kosovo needs over the first 3 to 4 
years.
    Kosovo will also require support across the board as it establishes 
institutions capable of good governance. Happily, we know how to help 
post-Communist countries who chose the path of reform. We have learned 
since 1989 how to do this reasonably well. Most of the countries of 
Central Europe that emerged after 1989 from Soviet domination have now 
graduated successfully from our assistance. Kosovo will be responsible 
for its own future, but the United States and Europe will be on the 
ground to help in the way I have described.
    I earlier mentioned Serbia, and the role it played in the Kosovo 
process. I now want to expand on this topic and also speak about 
Russia.
    We have no ill will toward Serbia. On the contrary. Some of us, 
like myself, served there and speak Serbian. Serbia is a great nation 
that stood with the United States during two world wars. Serbia could 
have a great future as part of an undivided Europe. Europe has made 
clear that it will welcome Serbia following its European trajectory.
    Now, Serbia faces a choice: Whether to move toward Europe or self-
imposed isolation. Serbia's authorities may not agree with the 
international community's decision about Kosovo, but they must exercise 
leadership from this point forward. They must not allow themselves to 
be caught up in a cycle of incitement and violence, which recalls the 
previous decade.
    Serbia has every right, and indeed every opportunity, to 
participate through the provisions of the Ahtisaari plan in providing 
for the welfare of the Serbs in Kosovo. But to exercise those 
opportunities, it must put aside policies of disruption and 
destruction.
    Serbia can, if it makes wise choices, look forward to the day with 
Kosovo and Serbia find themselves together within the EU. The EU has 
been the institution through which seemingly intractable national 
conflicts in Europe have been resolved, and it can be so for Serbia. It 
is Serbia's choice.
    Let me discuss Russia's role in this matter. Russia's opposition to 
Kosovo's independence under the Ahtisaari plan is public knowledge. 
Much less well known is that Russia was part of the contact group and 
was intimately involved in the Ahtisaari process, including the plan to 
provide protection for the Serbs in Kosovo and for their cultural 
sites. Russia's contribution was valuable, and we regret that Russia 
was unable to support a compromise resolution at the U.N. Security 
Council last summer.
    We must look ahead. I hope that Russia will play a responsible role 
toward Kosovo, despite its objections to Kosovo's independence. While 
we have a disagreement with Russia over Kosovo, we surely can agree 
that violence and instability do not help anyone. Therefore, we urge 
Russia to explicitly call for calm and responsibility in ways that will 
be heard unambiguously by Serbia, and by the Serbs in Kosovo and 
Bosnia-Herzegovina. We hope, in short, to contain our disagreement with 
Russia over Kosovo and we further hope that Russia will work with us to 
help bring stability to the region. We will be far better off working 
with Russia than not.
    Last, I want to address the concern some have raised that 
independence for Kosovo would set a precedent for other conflicts in 
the world.
    In the view of the United States, Kosovo does not constitute any 
precedent whatsoever. The Kosovo situation includes factors simply not 
found elsewhere. These include the violent, nonconsensual breakup of 
Yugoslavia; the ethnic cleansing that accompanied Yugoslavia's 
collapse; brutal crimes against and the forced expulsion of civilians 
in Kosovo; the U.N. Security Council's decision in 1999 to remove 
without doubt any remaining Belgrade governance of Kosovo; the 
establishment of a U.N. interim administration; and the political 
process, as envisioned in Resolution 1244, designed to determine final 
status. Again, these factors are not found elsewhere. Foreign 
governments which claim to worry about precedent should refrain from 
speaking as if there is one. Governments and separatists should refrain 
from hijacking Kosovo for their own ulterior motives and interests. 
Each conflict in Eurasia will be handled on its own unique conditions, 
and the United States will continue to work with partners in the region 
seeking to peacefully resolve these separatist conflicts.
    But despite this, the possibility exists that some may chose to 
exploit developments in Kosovo. In particular, we urge the leaders of 
Bosnia-Herzegovina to remember that their country's future lies with 
Europe, and that the only barriers between them and that good future 
are those they may construct for themselves. While the constitutional 
structure of Bosnia is complex and needs improving, the United States 
and our European partners have been clear: We support the improvement 
of the Dayton arrangements through negotiation and consensus, not 
ultimatums. And we do not and will not support or tolerate radical 
calls to abolish the Dayton arrangements or the integrity of Bosnia-
Herzegovina. We are prepared to work cooperatively with the leaders of 
the Bosniak-Croat Federation and Republika Srpska on this basis, and 
have made that clear.
    We have also worked closely with leaders of other nations in the 
region: Macedonia and Montenegro especially, and believe that Kosovo's 
independence will not pose a significant problem for them.
    The United States and our European allies have done all within our 
power to bring a sustainable solution to the Kosovo conundrum. We have 
done so in a way that is legitimate, moral, and advances the highest 
values of the Euro-Atlantic community. Yugoslavia's collapse, a great 
tragedy of post-World-War-II Europe, has often presented the United 
States and Europe with difficult choices. In this complex brew of 
nationalism, conflict, and mistrust, any course of action--including 
the decision not to act--brought risks and consequences. In Kosovo, as 
with other problems, the United States did not have the choice among 
risk-free options. I can tell you, without equivocation, that the path 
we took was the right one.

    The Chairman. Thank you very much. Mr. Secretary, what I'm 
going to do is the 7-minute rounds here. And let me begin by 
asking you a few short questions.
    The administration and the European Union have largely 
staked their policy in the region on the ability of Serbian 
Democrats to pull their country toward the West. And, however, 
in terms of Belgrade's progress on benchmark issues, like 
capture of fugitive war criminals and signing the Stabilization 
and Association Agreement, to move toward the EU membership the 
policies--thus far, at least--has not produced the desired 
results.
    There is, as you know, criticism of what some would suggest 
is Washington and Brussels continuing to ``Airbrush the bad 
behavior of the Serb leaders.'' Should we be reassessing 
whether they deserve the support they've been getting, before 
anymore is offered? Or is it better to just move forward with 
continuing to provide the kind of support that's been offered?
    And I add, as an adjunct to that, staff tells me that 
Kostunica has--they've just flat rejected the stabilization and 
association agreement, and that may prompt elections. How does 
this all factor in?
    Mr. Fried. The United States has a strategic interest in 
Serbia finding its way to Europe. And we have an interest in 
helping them, but we can do so only to the extent they want 
this, too. We see it as our responsibility to open all the 
doors for Serbia to achieve a European future, but it is 
Serbia's responsibility both to want to do this and to take the 
necessary steps. We hope that Serbia does not choose a path of 
self-isolation. That danger does exist.
    There is a vigorous debate about how to handle the issue of 
Serbia's cooperation with the War Crimes Tribunal, and the 
apprehension of Ratko Mladic and Radovan Karadzic. Serbia's 
actions have been more than nothing. They did turn over 
Milosevic, himself, to The Hague. They have not been fully 
satisfactory.
    But the larger issue, and one we will really have to face 
in the weeks and months ahead, and for which I don't have an 
answer, is what will Serbia choose to do? And it seems to me 
we're best positioned to make clear to the Serbian people that 
they do have a European future.
    The Chairman. What's your instinct about where the Serbian 
people are? I could ask this to my colleague as well. What's 
your instinct about where Kostunica has been? Some of his 
rhetoric hasn't been very far off of the rhetoric off the very 
person they've just deposed.
    If, in fact, the President got up the courage to actually--
that may be a presumptive way to say it--to pull out of the 
government, his party, and there was an election? I know we're 
not very good at predicting elections here in the United 
States, let alone in other countries, but talk to me about the 
debate you think that would ensue in Serbia?
    Mr. Fried. Predictions are hard to make, and dangerous to 
make----
    The Chairman. Not about who would run. I just want to 
know----
    Mr. Fried. I know. It's----
    Mr. Chairman [continuing]. I want the committee to----
    Mr. Fried. I will--no. I'll try to answer this straight, 
with that caveat.
    Boris Tadic just won reelection as President, against an 
overtly Nationalist opponent. Polling data in Serbia shows that 
most Serbs do not support Kosovo's independence, but they do 
not support Serbia's isolation. They support a European future 
for Kosovo.
    Now, with all the caveats necessary, it's clear that there 
is a constituency in Serbia for a European future. We are not 
asking the Serbian people to stand up and say they agree with 
or support Kosovo's independence. We are asking them to support 
a European future for themselves, and to work with Europe and 
with us toward that future.
    It is possible that, with strong, determined leadership, 
that potential constituency could be mobilized.
    The Chairman. Last question, because I only have 2 minutes 
left.
    One of the criticisms years ago, when I uttered the 
blasphemous suggestion that Kosovo should be independent, was 
that it is not capable of sustaining itself economically.
    Talk to the committee about what are the economic prospects 
for Kosovo, including raw materials that they possess, and why 
you think, if you think, they have the ability to sustain 
themselves and have a growing economy.
    Mr. Fried. Kosovo possesses large coal reserves and other 
minerals, especially in the North. It has a young 
entrepreneurial-minded population. That said, there have been 
two things that have prevented Kosovo from moving ahead 
economically.
    One is the absence of clarity on status which has retarded 
investment in Kosovo. And second, by all accounts, 
international administration has not been as successful as we 
had hoped, and the U.N. would acknowledge this.
    Kosovo will require international support for some time. We 
have to help the Kosovars get modern institutions up and 
running. We have to help them create an investment climate. We 
have to help them slowly force out corruption, which is going 
to be a drain on the whole economy. And finally, we have to 
start thinking of Kosovo on the path to Europe. Their future 
ultimately is going to lie within Europe, at which point their 
economic viability will no longer be a question.
    So we have short-term challenges, long-term prospects, and 
we're working hard at tackling some of these economic issues.
    The Chairman. Thank you.
    Senator Lugar.
    Senator Lugar. Mr. Secretary, I wanted to pursue the 
chairman's last question in this way.
    In the midst of all the negotiations about the security of 
Kosovo and its independence, what efforts have been made to 
develop a business plan? How in the world will Kosovo generate 
economic growth, quite apart from being able to sustain 
whatever level of income and economy they now have?
    You pointed out correctly the reticence of outside 
investors to come in while the status was undetermined. But now 
that it's determined, who are the logical investors? Are 
European countries that are providing troops--that at least 
bring some security and physical stability--likewise prepared 
to make investments? Are people in the United States prepared 
to make investments in the country? And, if so, in what would 
they invest?
    In other words, what I'm trying to get at is people point 
out independence has been declared, and we have welcomed that, 
but at the same time, an independent country really has to be 
able to sustain itself. And how that is to occur is not 
apparent.
    Likewise, last week Russian Foreign Minister Lavrov said, 
due to instability, Russia might necessarily need to intervene 
in Kosovo, even militarily, due to lack of--or failure of NATO 
to make its mission successful.
    He doesn't give any timeframe for when that intervention 
might come about, or at what stage a judgment is made about the 
success or lack of success of NATO efforts.
    Why, in your judgment, would Foreign Minister Lavrov be 
commenting on instability at this point, suggesting Russian 
intervention? Not economic intervention, mind you, or 
investment, but military intervention to bring about stability?
    Can you make an overall comment about the business plan, 
and likewise, the Russian intent?
    Mr. Fried. The donors' conference scheduled this June is 
intended to do two things. One is to bring to bear the major 
potential sources of support for Kosovo. It is also intended to 
focus the Kosovo Government on a developmental mindset.
    I will be in Kosovo at the end of this week, and one of my 
messages will be, that having achieved independence, they need 
to make it a success, and they need to not worry as much about 
the issue of status, which is resolved, and worry about the 
success of their independent country. And in that effort, they 
will have the active support of Europe and the United States.
    Now, to answer your business plan question, we know 
something about post-Communist developments, so I'll say the 
following.
    I see two kinds of investments coming into Kosovo in the 
short and the medium term. One is from the Kosovo diaspora in 
Western Europe, which has some money and is already investing 
in the country, but will do so more now under better 
conditions. So you'll see a lot of investment from below--gas 
stations, restaurants, hotels--but that's where it starts. We 
know from post-Communist economic experience, that's not where 
it ends.
    The better entrepreneurs start small. They don't end small. 
So they get into manufacturing. We've seen this before. And the 
ability of this bottomup investment to make a difference 
depends on whether institutions work, whether there's an 
honest, decent banking system.
    The second is investment from above, and there I think 
you're going to see some multinationals interested in the 
energy-generating sector, because Kosovo could make a fair 
amount of money exporting electricity. It's coal. There are 
environmental issues and anybody who has been in Pristina in 
the winter knows how, you know, what coal smoke does.
    So there are a lot of issues, and this will require 
investment. But we're looking at the possibilities, and not 
just the problems.
    On Russia, well, I cannot imagine that outside military 
intervention by Russia would be a stabilizing factor, but you'd 
have to ask Minister Lavrlov what he meant. If Russia is 
concerned about stability in Kosovo, they could play a very 
helpful role by urging Serbia not to engage in provocations in 
the North.
    There is an irony, of course. Russia has denounced the 
Ahtisaari Plan. It is not as well known that Russian diplomats 
played a very constructive role in helping put together some of 
its best provisions to protect the Serbs. They ought to take 
pride in some of their handiwork, but again, that's a question 
for them.
    We have to be clear, no evidence that Russia is actually 
contemplating military intervention, given the fact that NATO 
has 15,000 troops on the grounds, including near or at the 
borders in all parts of Kosovo. I find that unlikely.
    Senator Lugar. In the past month, Russia now has made an 
agreement--or Gazprom, specifically has--to provide natural gas 
to Serbia and, as I read the accounts, taking control of 50 
percent of the energy pipelines in Serbia. What is the energy 
source? You've mentioned coal in Kosovo, but to what extent are 
Kosovars vulnerable to energy cutoffs? And how does the new 
agreement with Gazprom in Serbia affect that?
    Mr. Fried. We actually studied this in the runup to the 
declaration of independence. Kosovo has indigenous sources of 
energy. It has some generating power, both coal-fired and 
hydro. It can develop more. It also has potential sources of 
electricity from some of its neighbors, like Macedonia.
    It is not as easy as it might appear, for Serbia to simply 
turn off the electricity. After all, the Kosovo Serbs would 
also suffer. The Kosovo economy does have vulnerabilities, but 
it also has a certain tough resilience. These people are used 
to living under very, very difficult conditions. There is a 
great deal of work to be done. And in the months and even years 
ahead, we will have to be involved in helping them.
    Senator Lugar. Thank you very much.
    The Chairman. Thank you very much.
    Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman. Secretary Fried, 
thank you very much for your testimony and for keeping us 
informed as to what's happening in Kosovo.
    Ten days ago, I was in Europe, attending the OSCE 
Parliamentary Assembly, and Kosovo was our main subject. I 
support the U.S. decision, but I must tell you I think we need 
to do a better job in explaining our reasoning for our support 
of Kosovo's independence, and its background.
    I'll start first with a point that you just mentioned, and 
that is our support for the Ahtisaari Plan. It's not just the 
independence of Kosovo, it's also under very unusual 
conditions, strong support for the rights of the minority 
communities and a supervised independence, including, I hope, 
the continuation of the OSCE mission in Kosovo.
    So I just really want to give you a moment just to point 
out that our support for independence of Kosovo is truly 
unique, as it relates to the protection of minority 
communities. And you mentioned the Russian diplomats had a 
major role to make sure that the municipalities that are 
majority Serb are controlled by the Serbs, that decisions 
affecting minority communities can only be made with the 
effective consent of the minority communities. That there's 
unusual support for protection of all the people of Kosovo.
    Mr. Fried. Senator, you accurately described many of the 
Ahtisaari Plan provisions. It was an extremely forward-leaning 
document. It provides what, to my knowledge, are the most 
extensive protections for a minority community in Europe, 
perhaps in the world. And most astonishingly, it was accepted 
in full by the Kosovo authorities, and they are busy 
implementing it. They are passing laws, and they have said that 
this is one of their highest priorities.
    So it is ironic that Serbia has ignored these provisions, 
and doesn't seem to be taking actions to exercise its own 
rights under the Ahtisaari Plan. But we shall see what happens 
in the future.
    With respect to European opinion, this has been hard for 
many European countries, especially for those who have had in 
the past separatist issues of their own. In our view, Kosovo is 
not a precedent.
    Senator Cardin. And on that point, I think we need to do a 
better job in pointing that out internationally. That's another 
area in which I agree with your assessment, but I think we 
could do a better job in making it clear that this is not a 
precedent for any other area in the world.
    Kosovo is truly unique in its history, and the NATO 
mission, the U.N. administration, the process it went through, 
and the Ahtisaari Plan. There's so many unique aspects to 
Kosovo, such as the ethnic cleansing and the tragedies to a 
large part of the population.
    And I think that we need to make sure that we emphasize 
that to counter the arguments of countries that are looking at 
this--not because they're concerned about precedence--but 
because they just don't support Kosovo's independence.
    Mr. Fried. I agree with you. I look forward to making those 
points.
    Senator Cardin. Let me mention one other issue of major 
concern to me, and that is the impact--this is in your written 
statement--on Bosnia. We've invested so much in Bosnia. I know 
that we support the integration of Bosnia into Europe.
    I am concerned that as we look at Serbia and making a 
priority Serbia's integration into Europe. Knowing full well 
that Serbia has yet to cooperate with the War Crimes Tribunal 
in the manner that we expect, and knowing that the history of 
Bosnia, particularly the Muslim population, the concern that 
they could be once more abandoned by Europe as we move forward 
in this process.
    I would just like us to make sure this is a major part of 
our strategy in Kosovo, that we don't lose sight of Bosnia and 
its integration into Europe.
    Mr. Fried. Senator, I've been in Bosnia a couple of times 
over the past years. You are certainly right that we can't lose 
sight of Bosnia's future integration in Europe, nor of the 
internal political strains between the two constituent 
elements, the Republika Srpska and the Croat-Bosniak 
Federation.
    We have made clear to all of the leaders of Bosnia, all of 
the constituent communities, that we want to see Bosnia realize 
a European future for itself, and it can do so only if it 
improves its institutions and doesn't overturn them. There are 
voices in Bosnia, on both sides, who speak radically of 
overturning Dayton.
    We don't support that. We support Bosnia moving ahead, 
improving its governance, and joining Europe. But you're right 
to point out that Bosnia requires our attention. Before Kosovo 
independence, we were in contact with Bosnian leaders so they, 
of all communities, could make sure they understood what was 
happening. We'll have to continue to work with them.
    Senator Cardin. And I agree with what you said. I think we 
have to be very strong in making sure that Bosnia's reform 
commitments are adhered to, carried out, and advanced. They 
still have a way to go, and we need to make sure that that 
continues.
    My concern is that I find Europe holds a different standard 
for Muslim majority countries than it does for others. And it 
concerns me that we aren't more vocal in making it clear that 
the same standards are applied, and that countries should not 
be given a priority or held back because of its ethnic 
population.
    Mr. Fried. I agree with that entirely, and we have--we 
happily have a number of countries in the Balkans with large 
Muslim populations. I was with President Bush in Albania last 
summer, and I can attest to the overwhelming pro-American 
sentiment in that country, which has looked at us as a friend 
since Woodrow Wilson.
    The Kosovar-Albanian community looks at the United States 
as having kept its word throughout both the previous 
administration and this one. These are countries that are 
extraordinarily infertile ground for extremism to penetrate.
    Senator Cardin. Thank you. Mr. Chairman, I would ask that 
my entire statement be made part of the record. Thank you, Mr. 
Chairman.

    [The prepared statement of Senator Cardin follows:]

           Prepared Statement of Senator Benjamin L. Cardin,
                       U.S. Senator From Maryland

    Slightly more than one week ago, I was in Vienna for a meeting of 
the OSCE Parliamentary Assembly. Kosovo was a topic for the debate 
which took place the day after the protesters in Belgrade attacked the 
U.S. Embassy. I essentially supported the U.S. position on Kosovo's 
declaration of independence and international recognition. The U.S. 
delegation, which included four House Members in addition to myself, 
sought to engage our Serbian counterparts, but they declined an 
opportunity to exchange views bilaterally. I did discuss the issue with 
the Russian head of delegation.
    I would like to raise three points on Kosovo from my perspective as 
Co-Chairman of the Helsinki Commission. First, I do not support 
Kosovo's independence alone and in isolation. I support the Ahtisaari 
plan, which includes supervised independence but also extends a great 
number of rights and benefits to the Serb and other minority 
communities. It's a package deal, and we need to make sure the Kosovo 
authorities and people understand the need for comprehensive and full 
implementation of the plan.
    We need to make sure the OSCE Mission, which has engaged in 
incredible outreach to the isolated, minority communities across 
Kosovo, stays in place. And we need to be sure that implementation is 
not just a brokered deal between the Albanians as the majority and the 
Serbs as the largest, most influential minority population.
    The Roma in particular, but also the other minority groups, must be 
included and integrated in Kosovo, and the Helsinki Commission intends 
to make this the priority for its future work.
    Second, I support efforts to engage Serbia and keep it on a 
European track, but frankly my concerns about Bosnia are far greater 
right now. The United States and Europe have invested much in that 
country, which was Milosevic's single greatest victim, yet it appears 
to be last in line for European integration.
    We can criticize the country's politicians in part, but a European 
effort to fast track Serbia and not Bosnia is a serious mistake. 
Especially important is the need to hold Belgrade to account for war 
crimes cooperation as long as Ratko Mladic (ROT-ko MLOD-itch) and 
Radovan Karadzic (ROD-o-von KA-rod-zitch), who are responsible for 
genocide in Bosnia, remain at large. Otherwise, Bosnian Serbs will look 
to Serbia for their access to Europe, just as Bosnian Croats have 
largely done regarding Croatia. At the same time, Bosnia's Muslim 
population will feel itself abandoned by Europe, again, delaying their 
own ability to move forward and perhaps becoming more vulnerable to 
dangerous, outside influence.
    Finally, there is the issue of precedence. In Vienna, I noted that 
Kosovo once had all the autonomy Serbia seems willing to promise it 
now, but it was unilaterally revoked by Belgrade and replaced with 
years of very brutal repression by Serbia. The international community 
may not have been able to agree on the outcome of recent status 
deliberations, but it did agree in a 1999 UN Security Council 
resolution that the status of Kosovo needed to be reconsidered. This 
has not been the case for other regions claiming Kosovo to be serving 
as a precedent.
    Frankly, we do not do a very good job in defining the differences 
between the case for Kosovo and those for other breakaway regions, 
based on fair, objective reasoning on the right to self-determination. 
We need to do better.
    Our arguments are unlikely to change the minds of the people in 
these regions, but we need to convince our friends and allies when 
coordinating a response. All too often the response among NATO and EU 
countries has been based on their own historical affinities or internal 
situations, and we need to find some common ground.
    I look forward to hearing Assistant Secretary Fried and the other 
witnesses talk about these and other issues relating to Kosovo and the 
Balkans.

    Senator Voinovich. Ambassador, we have talked in the past 
about the commitment that Europe and the United States have 
made to the U.N. mission in Kosovo. First, I'd like you to 
comment on the status of the UNMIK personnel in Kosovo.
    It's my understanding that they are going to be withdrawn. 
Senator Cardin indicated that the OSCE is involved, which I 
think has more people in Kosovo than any other place in the 
world--I think over 1,000 people. And it's my understanding 
that, because of Russia, that the OSCE is going to terminate 
that commitment to Kosovo.
    I'd like to know what's being done to replace the mission 
staff in Kosovo when OSCE withdraws.
    Second, I'd like you to comment on the EU commitment to the 
Ahtisaari Plan. Who's really going to take the leadership? It's 
my understanding, at least from the grapevine, that the EU's 
foreign policy representative Javier Solana is not that 
enthusiastic and wants somebody else to do it. The 
International Civilian Office and the International Steering 
Group are both involved with overseeing the settlement 
proposal, and the Ahtisaari Plan calls for a progress report 
after 2 years.
    I think most people would agree that UNMIK's involvement in 
Kosovo has been uneven, to say it in the most complimentary way 
possible, in terms of the participation of European leaders in 
the region.
    I have called on the floor of the United States Senate for 
one UNMIK leader's resignation because of the terrible job he 
was doing. It seems sometimes that people are sent there as a 
sinecure.
    Finally, how serious are the Europeans in their commitment 
to guarantee that the Ahtisaari Plan is enacted?
    Mr. Fried. I think the Europeans are now very serious. I 
think they realize that Kosovo is going to be principally a 
European responsibility, though also with the United States.
    There are almost 16,000 NATO troops in Kosovo; 90 percent 
of them are European. All of the NATO allies--except Iceland, 
that doesn't have a military--are present. You are correct that 
UNMIK will be drawing down, but it will not leave Kosovo 
entirely. It will remain there.
    The EU mission is ramping up. It will have about 2,000 
people there. The United States will support that mission. 
We're sending about 80 police, and some prosecutors, some 
judges, but most of the personnel--the overwhelming majority of 
the personnel will be European.
    Pieter Feith, a Dutch diplomat, will be ``double-hatted.'' 
He will be the head of the ICO, the International Civilian 
Office, with a mandate to oversee the Ahtisaari Plan. He will 
be double-hatted as the head of the EU mission. The European 
Union has pledged several hundred million dollars of assistance 
for Kosovo, so they're putting a reasonable amount of money in 
this.
    I anticipate the United States will fund about 25 percent 
of the ICO costs, and the Congress has appropriated, oh, 
about--now, about $350 million of assistance for Kosovo. 
Europe, quite a bit more, as I've said.
    I'm happy to report that although we had feared the OSCE 
would be forced out of Kosovo, that's no longer certain. I'd 
expected the Russians might veto it, but now the mission has 
been extended for some time. We will see how this develops.
    However, Senator, to answer your question, if the OSCE is 
forced out, we believe that the European Union will pick up 
many of the most crucial--the crucial functions, because the 
OSCE has done some good work.
    Senator Voinovich. And at the same time, we'd pick up 25 
percent of the cost.
    Mr. Fried. Well, the United States is going to pay a 
minority of the costs, you know, no matter where the mission is 
located. The Europeans will, as I said, pick up about three-
quarters of it.
    Senator Voinovich. Well, I remember after the war was over 
that we created a Stability Pact.
    Mr. Fried. Uh-huh.
    Senator Voinovich. There were significant promises made by 
the Europeans to fund various projects in the region. And I'll 
never forget visiting Brussels--and I won't mention the name of 
the individual that I talked with, but he said to me, ``Well, 
we said that but we really weren't sincere about it.''
    The question I have is are the Europeans going to come up 
with the money and the commitment needed to get the job done in 
Kosovo?
    Looking back at past instances, the EU has not been 
forthcoming. They talk a good game, but their actions don't 
speak as loud as their words.
    Mr. Fried. I think the Europeans understand that if--that 
Kosovo's success will be a European success, and if Kosovo is a 
generator of problems, Europe will suffer disproportionately. 
So, on that basis, I have confidence that Europe will invest in 
Kosovo.
    Now, that being said, ``trust but verify,'' and we will 
keep at this--working with our European friends.
    Senator Voinovich. From my perspective, I don't want to 
wait for 2 years to find out if things are going the right way.
    And I would respectfully ask you to periodically report 
back to me and, frankly, the members of this committee on 
whether the Europeans are doing what they say they're going to 
do, and whether or not the Kosovar Government is doing what it 
has promised to do. I know from past experiences that one way 
or another we're going to be getting anecdotal reports out of 
Kosovo by various groups here in the United States.
    We need to make sure that we know the facts on the 
situation there in Kosovo, rather than letting rumors circulate 
on what is supposedly going on.
    Mr. Fried. Senator, I look forward to working with you, 
with this committee, and other members to do exactly what you 
said, to give periodic briefings at your request about the 
situation, both with respect to the performance of the Kosovo 
Government, our work with our European allies, and how the 
Serbian community is faring, also, how they are behaving, 
especially in the North, because this--Serbia's actions may 
continue to be a problem. But I look forward to working with 
you.
    We cannot simply assume that Kosovo is on autopilot, and 
walk away. This is going to take high-level, sustained 
attention through the end of this administration and into the 
next.
    The Chairman. Thank you very much.
    Senator Boxer.
    Senator Boxer. Thanks, Mr. Chairman.
    Well, I certainly agree with your comments. And I support 
this independence, as I think most of us do, if not all of us--
but I wanted to note that since this occurred without explicit 
U.N. Security Council approval, the opponents are saying it's 
not legal.
    As such, do you believe it's important that Kosovo's 
independence be recognized by a large number of countries? On 
February 27, the Serbian Foreign Minister wrote in the New York 
Times that, ``the number of countries that will recognize an 
independent Kosovo will plateau at around 40, leaving it 
unrecognized by a vast majority of the close to 200 members of 
the United Nations.''
    Now, I understand that less than two dozen countries have 
recognized Kosovo's independence, thus far. Do you have a 
prediction of how many countries will, in fact, recognize an 
independent Kosovo? And do you think this is a very important 
indicator as to the future?
    Mr. Fried. We have now, I believe, 22 countries that have 
recognized Kosovo. Most--two-thirds of the European Union 
countries have already recognized, including most of the larger 
ones. I think countries outside of Europe have looked to Europe 
to take the lead on recognition, which is actually appropriate. 
I think other recognitions will come in.
    The fact is, it would have been preferable to have this 
done through the Security Council, which is why we tried last 
summer, through repeated comprise resolutions, and it became 
very clear that Russia would exercise its veto, so we had to 
proceed. But, for the record, it's quite clear that Security 
Council action would have been the best way forward.
    It was a hard decision for the Europeans to move ahead. But 
they, like we, faced--had to face a reality that the status quo 
was not sustainable, return to the past was impossible, we had 
to move forward, and we did so with our European allies.
    Senator Boxer. Right, right. I think you're missing my 
question. I support that.
    I'm asking, Do you have a prediction of how many countries 
will, in fact, recognize an independent Kosovo? And do you 
think that number is important going forward?
    Mr. Fried. I think that, to be plain, I think the most 
crucial number is how many European countries in the first 
place, is how many European countries recognize. And there, we 
have the vast majority. We will have--we're still getting more.
    Countries outside of Europe? Very good to have. We're 
working on that diplomatically. We have a number of 
recognitions outside of Europe, but it is less crucial. These 
will come in time.
    I don't care about a specific number. You know, the 
arguments of Foreign Minister Jeremic notwithstanding, there 
are very few people who believe that--in fact, no one, outside 
of Serbs and Russians, who believe that Kosovo could ever be 
ruled by Belgrade again.
    Senator Boxer. OK. Well, I think that's a good answer. So 
your answer is, basically, the regional support is what's 
really key in Europe. That's key, as opposed to the number of 
countries. OK.
    Now, I think this is where Senator Voinovich was going with 
his question. In your opening statement, you state that the EU 
and its Member States will provide roughly 50 percent of the 
assistance that Kosovo needs over the first 3 to 4 years.
    How much funding will the EU and its Member States need to 
pledge--if you could--in dollars, in order to meet the 50-
percent goal?
    Mr. Fried. Well, we needed kind of a rough benchmark figure 
to go on. I mean, these are crude estimates, so forgive me.
    Senator Boxer. Yeah. Sure.
    Mr. Fried. But sort of a benchmark of $2 billion over the 
first few years felt about right. You know, again, that is a 
soft number. We're----
    Senator Boxer. OK.
    Mr. Fried. The World Bank, the IMF, the European Union, and 
some from the United States are a good basis to begin. And 
also, as I said, we've gotten a lot----
    Senator Boxer. So $2 billion total?
    Mr. Fried. Yeah. Up----
    Senator Boxer. And half of that would come from the 
Europeans?
    Mr. Fried. The Europeans, the World Bank, the United 
States, that's about right.
    Senator Boxer. Well, wait. You said 50 percent from Europe, 
and now you're saying $2 billion. So 50 percent would be $1 
billion from Europe. And then, the others would be the other 
remaining 50.
    Mr. Fried. I think that's right.
    Senator Boxer. OK.
    Mr. Fried. And----
    Senator Boxer. OK.
    Mr. Fried. I have to be careful about the numbers, because 
the Europeans, like we, have to go through a budgetary process.
    Senator Boxer. I understand. We're just--I'm just trying to 
get----
    Mr. Fried. No. That's the order of magnitude that's pretty 
fair.
    Senator Boxer. OK. I want to pick up on another issue. I 
believe, Senator Biden, before I got here, was talking about 
the split between President Tadic and the Prime Minister.
    Mr. Fried. Kostunica. Yes.
    Senator Boxer. Yes. And what Tadic said--I don't know if 
this was out here, ``We're all angry, depressed, and humiliated 
because of Kosovo, but we have no right to put these feelings 
above the interest of the people.'' Great statement.
    And the administration said that, ``The U.S. will work with 
Tadic and the Serbian people to see Serbia firmly set on a path 
to prosperity, enjoying a market-oriented economy, and guided 
by the Rule of Law.''
    Now, can you explain in greater detail how the United 
States will work with the President there, and what happens 
with this split? How serious is this split? I mean, just to 
take it to our own shores here, because normally--with 
exceptions, and unfortunately we've had too many now--we've 
always had a foreign policy that was pretty much agreed to by 
the Congress and the President.
    But this seems to me to be serious, but I don't know enough 
about what's going on and if this is just the Prime Minister 
playing politics or what.
    Can you give us an assessment of how we work with Tadic and 
avoid the Prime Minister to make this happen?
    Mr. Fried. You have put your finger on the major challenge.
    How do we help Serbia realize its European future when so 
many political forces there seem intent on self-isolation of 
the country? And to be clear, President Tadic firmly and 
consistently has opposed Kosovo's independence.
    Senator Boxer. Yes.
    Mr. Fried. He also has been a proponent of Kosovo's 
integration into Europe despite--of Serbia's integration into 
Europe, despite Kosovo's independence. Kostunica seems to have 
a different view.
    Senator Boxer. Uh-huh.
    Mr. Fried. And he seems--I think policy of self-isolation 
is, unfortunately, an accurate way to describe what he is 
doing. The Serbs will have to sort this out. We can't reach 
inside Serbian politics and figure it out.
    What I said earlier was that there is a latent, but very 
large, constituency for a European future for Serbia within the 
Serbian population. And it will take leadership to mobilize 
that constituency, and we look forward to working with the 
leaders who can do it.
    Senator Boxer. So we won't work--we're not going to work 
with the leaders who won't do it, and we have to finesse this--
--
    Mr. Fried. Well, they don't want to work with us.
    Senator Boxer. Well, right. I just--I'm still--I don't know 
enough about it to really get a sense of whether this a huge 
issue among the populace? Is there a split--the split that's 
reflected between the two leaders, is it reflected in the 
populace?
    Or is this just something that people are talking about, 
but they don't really feel that strongly about?
    Mr. Fried. Serbs feel very strongly that Kosovo should not 
be independent. But after that, you get a split. Many Serbs 
don't believe Kosovo is--should be independent, but they want 
to get on with life, to put it that way. They want to go to 
Europe. There is a hardcore--a hard radical core that wants to 
be destructive.
    Senator Boxer. Uh-huh.
    Mr. Fried. ``If we can't have Kosovo, we'll take down the 
temple. We'll smash up everything we can.'' My words, not 
theirs, but you saw the rioting.
    Senator Boxer. OK. I see.
    Mr. Fried. And so, the trick is to--not the trick--the 
challenge is to reach out to Serbs and say, ``Look, we don't 
expect you to embrace Kosovo independence, but that's not the 
choice you face. The choice you face is whether, having lost 
Kosovo in 1999'' which is when they really lost it--they will 
embrace a European future for themselves, or they will simply 
sit where they are.
    Senator Boxer. Uh-huh.
    Mr. Fried. That's the way we have to frame this up.
    Senator Boxer. Thank you very much. Appreciate it. Thank 
you, Mr. Chairman.
    Senator Cardin. Mr. Chairman, can I just make one just 
brief comment in response to Senator Voinovich's point about if 
the OSCE mission is not allowed to continue, that NATO will 
pick up the slack? I'd--European Union would pick up some. The 
European Union.
    Mr. Fried. The European Union.
    Senator Cardin. The European Union will pick up slack. 
Excuse me. I just really want to add a caveat to that.
    I think OSCE is uniquely positioned to help protect the 
human rights of the different communities, and has credibility 
that I'm not sure the European Union would be able or has the 
interest in following up or not. And I just really wanted to 
underscore Senator Voinovich's point about monitoring the 
respect for minority rights within Kosovo, that if OSCE is not 
permitted to continue, I think our challenges are going to be 
greater.
    Mr. Fried. You're right that OSCE has a body of knowledge 
and expertise. We're better off with OSCE on the ground. If we 
have to choose a second-best, we can pick up some of that 
expertise. There would be a loss, so we'd prefer OSCE to 
remain, performing its mission. They're good at it.
    The Chairman. Thank you very much. Thank you, Mr. 
Secretary. I appreciate your time and testimony.
    Mr. Fried. Mr. Chairman, members, thank you very much for 
the opportunity.
    The Chairman. Next, we have a distinguished panel, and I 
hope I pronounce the names correctly. If I do not, you can call 
me Chairman Biden.
    Mr. Bugajski, Director of the New European Democracies 
Project, the Senior Fellow of European Programs at the Center 
for Strategic and International Studies. We'll welcome him.
    Mr. Daniel P. Serwer, vice president at the Center for 
Post-Conflict Peace and Stability Operations and the Centers of 
Innovation at the United States Institute of Peace.
    And, Mr. Vejvoda. He's the executive director of the Balkan 
Trust for Democracy, in Washington, DC.
    We thank you, gentlemen. We look forward to hearing your 
testimony. Why don't you proceed in the order in which you were 
recognized?

     STATEMENT OF JANUSZ BUGAJSKI, DIRECTOR, NEW EUROPEAN 
 DEMOCRACIES PROJECT, SENIOR FELLOW, EUROPE PROGRAM CENTER FOR 
      STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON, DC

    Mr. Bugajski. Good morning. Thank you, Mr. Chairman, 
distinguished Senators. It's always a pleasure and an honor to 
be here.
    I'll try and keep my comments as brief as possible. I will 
refer directly to the four questions that were posed.
    The first question: What will be required for Kosovo to 
develop into a functional, multiethnic society with strong 
institutions and respect for the rule of law?
    I would say that the first step has already been 
accomplished, and that's removing the ambiguity of the status 
quo, establishing Kosovo's statehood, and launching the process 
of international recognition, which now stands at 23, but is 
growing each day.
    The priorities of the new administration in Pristina must 
include the full implementation of the Ahtisaari package, 
focused particularly on decentralization, the rule of law, and 
assurance of minority rights.
    Second, launching an effective anticorruption program, with 
full transparency in government operations. I think that's 
essential in Kosovo.
    Third, comprehensive judicial reform, and of course, that's 
a long-term process and even NATO and EU members are having 
some difficulties with; nevertheless, that process has to be 
launched.
    And, last but not least, the passage of laws to encourage 
foreign investment. And I think Pristina here needs to work 
very closely with the EU's International Civilian 
Representative, as well as with EULEX, the EU mission, working 
closely with police officers, judges, prosecutors, customs 
officials, and so forth.
    However, I would say that supervised independence must 
avoid heavy-handed interference that, as we saw in the previous 
UNMIK administration, creates confusion and paralysis in 
government decisionmaking. EULEX must avoid turning the new 
mission into a replica of UNMIK, in which the foreign presence 
undercuts political responsibility and self-sustaining economic 
development. Dependency relationships--and we've seen this in 
Bosnia--do not encourage sovereignty development, economic 
prosperity, and investment.
    A longer term priority for Pristina is to gain an EU-SAA 
state--a Stabilization Association Agreement, similar to most 
of the other West Balkan States. And with regard to the 
question of economic viability--it's not a reflection of size, 
or even location, but of Kosovo finding its niche.
    And this is a consequence of the rule of law, 
entrepreneurship, encouraging investment, and innovation. And 
the young population in Kosovo is a positive factor. Many of 
them have worked abroad. They're very adaptable and mobile. 
Kosovo does not have too many old Communist industries that 
have to be restructured; modernization will involve training a 
new population for the new globalized economy.
    The role of the ICR should also focus on integrating all 
minority groups, particularly the Serbian population, which 
suffers now from a sense of loss and the lack of unified 
leadership, and pressure from Belgrade.
    I do fear that the Serbian communities in northern Kosovo 
may increasingly support separation or a parallel structure 
controlled by Belgrade. And here the Government of Pristina has 
to be restrained. Up until now, they've been extremely well-
behaved and have not overreacted.
    NATO and the EU Mission has to make sure that northern 
Kosovo is also part of an independent Kosovo, that it's not 
separated, that it does not become an unstable enclave within 
Kosovo.
    Second question: How to improve prospects for Serbia in its 
Euroatlantic integration? I think Dan is going to address this 
quite comprehensively.
    I would just say that it's going to take time for Belgrade 
to regain its European Union focus and accept the new realities 
in Kosovo. We have to show a certain patience. At this point, I 
don't think there's anything specifically that can be offered 
to Belgrade, in terms of EU cooperation, as the Kostunica 
administration claimed that this legitimizes the EULEX mission, 
and even legitimizes the loss of Kosovo.
    But we must continue to urge dialog with Serbia to prevent 
the country's isolation and its exploitation by a resurgent 
Russia. Reengagement is unlikely to be rapid, given divisions 
in the Serbian Government. We may indeed have to wait for the 
new elections. It's going to take awhile, I think, for those 
lingering nationalist resentments to be dispelled in Belgrade.
    I do think, though, NATO enlargement at the April summit in 
Bucharest, and the inclusion of Albania, Croatia, and 
Macedonia, will demonstrate to progressive forces in Serbia 
that NATO is serious in expanding throughout the region. And 
second, that it's beneficial to each of the new members.
    I think Serbia can then monitor the progress of its nearby 
neighbors. And Montenegro also, I believe, should receive a 
membership action plan very soon. This will also encourage 
reform in Serbia.
    Let me just add one important means for reaching the 
Serbian and Albanian publics that should not be neglected. And 
this is the media. And unfortunately, while the Serbian media, 
the independent media, is under pressure, there is talk now of 
closing Radio Free Europe Broadcasting. I think this would be a 
mistake.
    I think the South Slavic and Albanian-language programming 
should be continued. This is essential, as one of the most 
important avenues for objective information in the Balkans.
    Third question: How to manage the implications of 
independence in other areas?
    I think the stabilization of the rest of the Western 
Balkans is manageable. However, NATO, European Union, and the 
United States have to work in tandem in each of the neighboring 
countries--Bosnia, Macedonia, Montenegro. NATO entry would help 
this process, would help stabilize the region, particularly if 
the Adriatic Three enter NATO.
    Also, the commitments of the international community to the 
integrity of Bosnia has been reaffirmed in recent days, with 
the extension of the mandates of the higher representatives. 
That's a very important step.
    With regard to Macedonia and Montenegro, border treaties 
need to be signed as soon as possible between Pristina and 
those two countries, to make sure there is no lingering fear of 
pan-Albanianism in the region.
    My last question, as I've run out of time, the last 
question was: How to manage relations with Russia?
    And that's really a subject for another hearing, of course. 
But let me add my few thoughts about this. Although Moscow does 
exploit Kosovo as a pawn in its strategic struggle with the 
United States, it is unlikely to provoke a major confrontation 
with the West.
    Recognition of Kosovo's independence serves the Kremlin's 
aims because it can raise its international stature by claiming 
that it is the defender of international legitimacy, whereas 
the United States and the European Union are unilateralist 
powers seeking to break up states. This has been Moscow's 
public relations propaganda drive all along, and I think it's 
been intensified since Kosovo's independence and recognition.
    Kosovo enables Russia to elevate its international position 
to interpose in Balkan affairs, where it had very little 
leverage just a few years ago; to promote splits within the 
European Union, not only in Kosovo, but over numerous issues; 
to try and gain veto powers over Europe's enlargement in the 
Balkans; and to construct, in the longer term, what they would 
call a Eurasian Pole of Power, as a counterbalance to the 
United States.
    And for the Kremlin, the birth of new democracies is the 
problem, because this is a long-term threat to Russia's 
interests, Russia's strategic designs. Independent democratic 
governments invariably seek membership in NATO and the European 
Union. They want close relationships with the United States, in 
order to consolidate the reform process, and to provide 
permanent security. This is a threat to Russian national 
expansionist interests.
    I will stop there, simply by saying the best way to deal 
with Russia is not to retreat, but to develop a united and 
resolute strategy between the European Union and the United 
States, particularly on issues that are central to allied 
interests, such as security, stability, democracy, and 
international integration in Southeast Europe.
    Moscow exploits weakness and division but ultimately it 
respects strength and resilience.
    Thank you.

    [The prepared statement of Mr. Bugajski follows:]

     Prepared Statement of Janusz Bugajski, Director, New European 
    Democracies Project, Senior Fellow, Europe Program, Center for 
           Strategic and International Studies, Washington DC

    I will briefly address the four questions posed concerning the 
strategic challenges facing the United States and Europe in the 
aftermath of Kosova's independence.

   What will be required for Kosova to develop into a 
        functional, multiethnic society with strong institutions and 
        respect for the rule of law?

    The first step has already been taken by removing the ambiguity of 
the status quo, establishing Kosova's statehood, and launching the 
process of international recognition. The priorities for the new 
administration in Pristina over the next year must include: The 
implementation of the Ahtisaari package focused on decentralization and 
the assurance of minority rights; launching an anticorruption program 
with full transparency in government operations; comprehensive judicial 
reform; and the passage of laws to encourage foreign investment. 
Pristina needs to work closely with the EU's International Civilian 
Representative (ICR) and with the EULEX mission of police officers, 
judges, prosecutors, and customs officials.
    The EU needs to take responsibility for the provision of targeted 
economic and technical assistance. However, supervised independence, 
involving protective security and the EU rule-of-law mission, must 
avoid heavy-handed interference that creates confusion and paralysis in 
government decisionmaking. EULEX must avoid turning the new mission 
into a replica of UNMIK in which the foreign presence undercuts 
political responsibility and self-sustaining economic development. 
EULEX must be a short-term operation with specific objectives and not 
an indefinite presence or a substitute for sovereignty. Relationships 
of dependence do not encourage development and international 
integration.
    There is a danger that politicians and public alike may see the EU 
as a benefactor and the EU mission as a dispenser of assistance that 
brings with it the promise of Union membership. Kosova must wean itself 
off foreign aid and establish a productive economy and develop its 
infrastructure to enhance regional cooperation and eventual European 
integration. A longer term priority for Pristina is to gain an EU 
Stabilization and Association Agreement (SAA), similarly to other West 
Balkan States. Economic viability is not a reflection of size or 
location, but a consequence of entrepreneurship, the rule of law, 
innovation, and efficient government. Kosova needs to attract investors 
now that its status is settled. Hence, it must introduce clarity in 
property rights, transparency in legal contracts, and incentives for 
foreign capital.
    The role of the ICR should also focus on integrating all minority 
groups, including the Serbian population, into Kosova's body politic. A 
multiethnic society needs to be cultivated among all communities in 
which minorities can benefit from incentives to remain in Kosova. 
However, given the sense of loss, the lack of a united Serbian 
political leadership, and the incessant pressure from Belgrade, Serbian 
communities in the north may support separation while those in the rest 
of Kosova may seek to move northward. Over the coming weeks, the 
Kostunica government could pursue the partition and annexation of 
Kosova's northern municipalities by reinforcing parallel political 
structures on the territory. Some officials in Belgrade may calculate 
that such a scenario could precipitate more tangible Russian 
assistance. Pristina must not react to such provocations but allow NATO 
and the EU mission to maintain Kosova's territorial integrity. 
Partition is the policy of last resort for Belgrade as it would 
indicate that the government is resigned to Kosova's independence. 
However, Belgrade cannot bank on a consistent and supportive Russian 
role as Serbia is only one piece on a much bigger chessboard for the 
Kremlin.

   How to improve prospects for Serbia's Euro-Atlantic 
        integration?

    It will take time for Belgrade to regain its EU focus and accept 
the new realities in Kosova. Russia's regime has complicated matters by 
emboldening the Serbian Government to resist decisions by an increasing 
number of states to recognize Kosova. In reality, both sides are 
exploiting each other: Russia is regaining a foothold in the Balkans 
through Serbia, while Serbia is leveraging Moscow to oppose Kosova's 
independence.
    At present there is nothing sufficient that can be offered to 
Belgrade in terms of EU cooperation as the Kostunica administration 
claims that this would acknowledge the legitimacy of the EULEX mission 
and even the loss of Kosova. Belgrade has withdrawn its ambassadors 
from Washington and several EU capitals that have recognized Kosova 
although it has not severed diplomatic relations. The U.S. and the EU 
must continue to urge dialog with Serbia to prevent the country's 
isolation. Reengagement is unlikely to be rapid, given the divisions in 
the Serbian Government and the unwillingness of senior politicians to 
discard lingering national resentments and negative Russian influences.
    NATO enlargement at the April 2008 summit in Bucharest and the 
inclusion of Croatia, Albania, and Macedonia would help demonstrate to 
progressive forces in Serbia that a cooperative relationship with the 
alliance promotes modernization and provides a stimulus toward future 
EU entry. With NATO's further enlargement, Serbia will be enveloped by 
the alliance and can carefully monitor how its neighbors benefit from 
inclusion.
    One important means for reaching the Serbian and Albanian publics 
in the Balkans at a time of uncertainty and potential instability is a 
free media. Unfortunately, while the independent media in Serbia is 
experiencing increasing pressure with more frequent attacks on 
journalists, the Radio Free Europe/Radio Liberty Broadcasting Board of 
Governors has proposed the closure of its South Slavic and Albanian 
language programming over the coming year. This is a premature and 
short-sighted approach as the western Balkans have still to achieve a 
sufficient level of stability, in the absence of a fully protected free 
media in Serbia, which would warrant the closure of one of the most 
important vehicles for objective reporting.

   How to manage the implications of Kosovo's independence in 
        other areas of South East Europe, particularly in Bosnia's Serb 
        Republic?

    The recognition of Kosova's statehood will generate some regional 
tensions that require competent handling by the trans-Atlantic powers. 
The stabilization of the western Balkans is manageable if NATO, the EU, 
and the U.S. work in tandem to prevent Belgrade and Moscow from 
exploiting latent tensions and militant expectations in Bosnia-
Herzegovina, Macedonia, and Montenegro. Belgrade no longer possesses 
the capabilities or intentions to export armed conflict to neighboring 
states, but a display of diplomatic and military resolve may be 
necessary by NATO and the EU to convince local actors that the West is 
serious about stability. Closer cooperation with the governments in 
Sarajevo, Skopje, and Podgorica will enable Washington and Brussels to 
contribute to their security requirements.
    NATO entry for Albania, Croatia, and Macedonia will contribute to 
consolidating regional security. Inclusion will prevent these countries 
from feeling isolated and vulnerable to any negative effects stemming 
from Kosova's statehood or Serbia's reaction. Their accession would 
mean that almost the entire Balkan Peninsula is either within NATO or 
moving in that direction. Montenegro, which is committed to trans-
Atlanticism, must also become a credible candidate in the near future 
and receive a Membership Action Plan (MAP), while Bosnia-Herzegovina 
and Kosova will remain under EU and NATO supervision for several years.
    The commitment of international players to the integrity of Bosnia-
Herzegovina was recently reaffirmed with the extension of the mandate 
of the High Representative to oversee judicial, economic, and security 
sector reforms. Bosnia is also on the verge of receiving an EU 
Stabilization and Association Agreement (SAA) once the country's two 
entities implement reforms to unify their police forces. The U.S. and 
the EU may also need to restrain Sarajevo's reaction to potential 
provocations by militants in Bosnia's Serb Republic, while periodic 
demonstrations of EU resolve may be necessary to discourage 
partitioners. With regard to Macedonia and Montenegro, border treaties 
with Kosova will be essential to build confidence and remove any 
lingering fears of pan-Albanianism. The new NATO members can also work 
more effectively with Kosova to combat cross-border criminal and 
militia networks and promote free trade and other forms of economic 
cooperation.

   How to manage relations with Russia in the aftermath of 
        Kosovo's independence?

    Although Moscow exploits Kosova as a pawn in its strategic struggle 
with U.S. and EU interests, it is unlikely to provoke a major 
confrontation with the West. In protesting the recognition of Kosova's 
independence the Kremlin aims to raise its international stature by 
claiming that Russia is a major defender of international legality and 
the protector of state integrity. At the same time, Moscow depicts the 
U.S. as a unilateralist maverick to disguise its own imperial ambitions 
among former satellites. Kosova enables Russia to elevate its 
international position, to interpose in Balkan and European affairs, to 
promote splits within the EU, to gain veto powers over Europe's 
enlargement, and to construct a Eurasian pole of power as a 
counterbalance to the United States.
    Russia will continue to pursue its expansionist agenda more 
vigorously in several neighboring regions and intensify its anti-
American alliances. Moscow's policy will remain assertive and President 
Dmitry Medvedev may even seek to prove his Greater Russia credentials 
by heating up one or more conflict points with the U.S. or the EU. The 
list of disputes expands almost every week and includes such 
contentious questions as the U.S. missile defense shield, the CFE 
(Conventional Forces in Europe) treaty, ballistic missile accords, the 
role of the OSCE (Organization for Security and Cooperation in Europe), 
NATO enlargement, and energy security.
    For the Kremlin the birth of new democracies in former Communist 
territories presents a long-term threat to Russia's strategic designs. 
Independent democratic governments invariably seek membership in NATO 
and the EU in order to consolidate the reform process and provide 
permanent security and the assurance of state sovereignty. For Moscow, 
such steps undercut its influences in neighboring countries, shrink its 
regional power projection, and retard its ambitions as a revived 
superpower. Russia feels more confident in realizing its aspirations 
where its neighbors are either predictable authoritarian states, 
isolated countries with populist governments, or weak states that are 
internally divided and therefore cannot qualify for NATO or EU 
membership.
    The Balkans are useful for Moscow in disrupting democratic 
expansion in the wider European theater and injecting the Kremlin's 
corrupt business practices and its disregard for the rule of law. 
Serbia is a valuable bridgehead to further its economic and political 
interests, especially through the expansion of monopolistic energy 
networks. The U.S. and the EU need to develop a more united and 
resolute strategy in dealing with Russia particularly on issues that 
are central to allied interests, such as security, stability, 
democracy, and international integration throughout the Balkans. Moscow 
exploits weakness and division but ultimately respects strength and 
steadfastness.

    The Chairman. Thank you.
    Mr. Serwer.

   STATEMENT OF DANIEL SERWER, VICE PRESIDENT FOR PEACE AND 
 STABILITY OPERATIONS, U.S. INSTITUTE OF PEACE, WASHINGTON, DC

    Mr. Serwer. Thank you, Mr. Chairman, for this opportunity 
to testify before you again, offering my personal views--not 
those of the U.S. Institute of Peace, which does not take 
positions on policy issues.
    I am going to submit my full statement for the record, if 
you'll permit. In this oral testimony, I'll skip over the 
initial points, which concern how the Kosovars have celebrated 
their independence, but have not fundamentally misbehaved, and 
how Belgrade is trying hard to turn back the clock.
    You are all familiar, I think, not only with the burning of 
the U.S. Embassy, but with various statements that have been 
made by the Prime Minister, the Supreme Court, the President, 
and various other authorities, including threats to retake 
Kosovo made by a prominent Serbian Bishop.
    The situation in northern Kosovo is particularly dangerous. 
If NATO and the European Union allow continued Serbian control 
there, as the U.N. and NATO have allowed for 9 years, there 
will be division along ethnic lines, with consequences for 
Bosnia and Macedonia. Pristina cannot assert its sovereignty in 
the North without creating big problems. The European Union and 
NATO need to do it on Pristina's behalf, blocking Belgrade's 
partition plans.
    My main point, Mr. Chairman, is that Serbia--not Kosovo--is 
the problem in the Balkans. Its leadership promised to hold on 
to Kosovo and cannot now deliver. By keeping the issue open, 
the Prime Minister aims to strengthen nationalists, whose most 
extreme political party is already the largest in the Serbian 
Parliament, as well as slow Serbia's democratic transition.
    Belgrade's refusal to accept a sovereign Kosovo will limit 
its influence in international bodies and scare off foreign 
investors. Serbia's current path leads to isolation from Europe 
and the United States, as well as alignment with Russia, which 
has been paid off for its role in blocking a U.N. Security 
Council resolution on Kosovo with advantageous Serbian energy 
deals.
    Brussels and Washington tried to prevent this sad turn of 
events by offering, upfront and without conditions, a series of 
incentives. These included normal trade relations, membership 
in NATO's Partnership for Peace, negotiation of a Stabilization 
and Association Agreement, opening European markets, over 1 
billion Euros in assistance for 2007 to 2011, facilitated visas 
for EU entry, and extensive protection for Serbs remaining in 
Kosovo.
    Since Milosevic's fall, the European Union has provided 
billions of Euros in aid and preferential credits. The United 
States has provided $635 million in assistance. Serbia has 
pocketed these incentives and provided little in return since 
2003.
    It's time for Washington and Brussels to get smarter. While 
hoping that Serbia will come to its senses sooner rather than 
later, both need to plan for a long period in which Belgrade 
aligns with Moscow and tries to block NATO and the EU expansion 
in the Balkans.
    Transitional democracies in Croatia, Macedonia, Albania, 
and Kosovo will have to share the Western Balkans with a 
backward-looking, resentful, and ill-spirited Serbia. NATO and 
the European Union should move quickly to welcome as members 
those countries that are doing the right thing, in the hope 
that they will encourage Serbia to come along. Washington and 
Brussels should also signal that they are determined not to 
give Serbia any more freebies.
    Ambassadors should be recalled for consultations on a new, 
coordinated United States and European Serbia policy. The still 
unsigned Stabilization Association Agreement should be taken 
off the table. The people, including Serbian security 
officials, who participated in attacking checkpoints inside 
Kosovo should be brought to trial in a Pristina courtroom, 
under EU supervision.
    At the same time, Brussels and Washington need to make 
clear that there is a route out of the dead end into which 
Serbia has driven itself, provided it meets reasonable 
conditions.
    American and European ambassadors should return to Belgrade 
once Serbia ends violence against the legitimate forces of law 
and order in Kosovo, and begins to cooperate with NATO and the 
European Union there. I note here that this morning's news is 
that rather than doing this, Serbia has urged Serbian employees 
of the authorities in Kosovo to leave their jobs.
    If Serbia turns indicted war criminal Ratko Mladic over to 
The Hague Tribunal, the Stabilization and Association Agreement 
should proceed. Serbian candidacy for EU membership should be 
conditional on Kosovo's entry into the United Nations, 
currently blocked by a Russian veto at Belgrade's behest.
    By laying out a clear path forward to improved relations 
conditional on Belgrade's behavior, Brussels and Washington can 
over time bring Serbia out of its funk and enable it to occupy 
its rightful place in Europe. Offering more freebies without 
conditions will have the opposite effect, encouraging 
reactionary forces in Serbia and strengthening its alliance 
with Russia.
    I hasten to add that generous support should go to the 
courageous Serbs who have continued, despite the prevailing 
winds, to advocate human rights, free media, dialog with 
Kosovars, and doing what is necessary to get Serbia into the 
European Union. Likewise, Voice of America, and Radio Free 
Europe should continue to broadcast in Serbian and Albanian.
    Mr. Chairman, I consulted with a Serbian journalist just 
before this hearing, in this very room, who noted to me that 
from the point of view of the media, things are less free today 
than they were under Milosevic.
    I'm going to skim over my discussion of collateral damage 
in Bosnia and damage to our relations with Russia and only note 
that in Bosnia I think the only potential source of trouble is 
not the Bosnians themselves, but Belgrade troublemaking.
    And with respect to Russia, our relations with Russia are 
much bigger and more important than Kosovo, and there have to 
be things in that relationship that we can give up without high 
cost to signal to the Russians that we want to put Kosovo 
behind us.
    Let me conclude by saying that we've done the right thing 
to join our European partners in recognizing Kosovo as a 
sovereign state, a move that has prevented much worse violence 
and instability than we've seen so far.
    We need now to repair relations with Serbia by delineating 
a clear path forward and patiently awaiting Belgrade's 
realization that its citizens will be far better off if their 
government embarks on it. It may take a long time for that to 
happen.
    Thank you, Mr. Chairman.

    [The prepared statement of Mr. Serwer follows:]

   Prepared Statement of Daniel Serwer, Vice President for Peace and 
 Stability Operations, Centers of Innovation, U.S. Institute of Peace 
                             Washington, DC

    It is a pleasure to be here today to offer my personal views--not 
those of the U.S. Institute of Peace, which does not take positions on 
policy issues--on the challenges facing the United States and Europe in 
the aftermath of Kosovo's independence.
    My main point is this: Kosovo isn't the problem, Serbia is. I will 
offer a policy on Serbia that departs from what we have been doing. I 
call it the Clear Path Forward, because it makes clear what Belgrade 
needs to do to make its way toward Europe.
Kosovars celebrate but have not misbehaved
    Independence generated excitement and celebration in Kosovo, but 
its Albanian population--about 90 per cent of the total--has refrained 
from violence against minorities. Despite provocations, Kosovars have 
not sought, as some feared they might, to chase Serbs from the new 
state. This correct behavior needs to continue.
    Kosovo needs massive assistance, but it also needs wise restraint 
to develop as a state. While providing international judges and 
prosecutors as well as police monitors, we need to be careful not to 
create dependency: Politicians who feel no obligation to take on tough 
issues because they know the internationals will act. States need to 
make their own mistakes. We should intervene only to prevent the 
potentially fatal ones.
Belgrade is trying to turn back the clock
    While Albanians celebrate, Serbs are protesting. Serb police 
supported rioters who burned U.N. and Kosovo police checkpoints near 
the now international border. Serbia's Minister for Kosovo hailed these 
efforts as consonant with government policy, thus disrespecting U.N. 
Security Council Resolution 1244, to which Belgrade often appeals, and 
causing Kosovo Serbs to ask him to resign. Young extremists attacked 
the U.S. and other Embassies, left unguarded during a government-
endorsed demonstration. There have also been riots outside Belgrade, as 
well as attacks on independent media.
    The Serbian Government is trying to turn back the clock. 
Parliament, where no Kosovar has sat since Milosevic deprived the 
province of autonomy almost 20 years ago, announced it had annulled the 
independence declaration and declared deployment of an EU mission to 
maintain rule of law unacceptable. The Supreme Court failed to act when 
the Serbian Government struck Kosovars from the voter rolls to ensure 
approval of a new constitution prohibiting recognition of Kosovo's 
independence, but it quickly denounced the independence declaration as 
illegal.
    The Prime Minister praised the youthful rioters after the U.S. 
Embassy attack, accused the President of the United States of violence 
against Serbia and claimed, ``As long as the Serbian people exist, 
Kosovo remains Serbia,'' no matter what its population wants. Serbia's 
Ambassador to Washington has been recalled. Serbia's President has 
pledged he will never accept Kosovo independence. One of its leading 
bishops has called for the Serbian Army and police to retake Kosovo, 
after rearming with Russian supplies. Belgrade has encouraged secession 
rumblings in the Serb half of Bosnia.
    The situation in northern Kosovo is particularly dangerous. If NATO 
and the EU allow continued Serbian control there--as the U.N. and NATO 
have for 9 years--there will be division along ethnic lines, with 
consequences for Bosnia and Macedonia. Pristina cannot assert 
sovereignty in the north without creating big problems; the EU and NATO 
need to do it on Pristina's behalf, blocking Belgrade's partition 
plans.
Serbia is the problem
    Serbia, not Kosovo, is the problem in the Balkans.
    Its leadership promised to hold on to Kosovo and cannot now 
deliver. By keeping the issue open, the Prime Minister aims to 
strengthen nationalists, whose most extreme political party is already 
the largest in the Serbian Parliament, and slow Serbia's democratic 
transition. Belgrade's refusal to accept a sovereign Kosovo will limit 
its influence in international bodies and scare off foreign investors. 
Serbia's current path leads to isolation from Europe and the United 
States as well as alignment with Russia, which has been paid off for 
its role in blocking a U.N. Security Council resolution on Kosovo with 
advantageous Serbian energy deals.
    Brussels and Washington tried to prevent this sad turn of events by 
offering, up front and without conditions, a series of incentives. 
These included normal trade relations, membership in NATO's Partnership 
for Peace, negotiation of a Stabilization and Association Agreement 
opening European markets, over one billion euros in assistance in 2007-
11, facilitated visas for EU entry and extensive protection for Serbs 
remaining in Kosovo. Since Milosevic's fall, the EU has already 
provided billions of euros in aid and preferential credits; the U.S. 
has provided $635 million in assistance.
    Serbia has pocketed these incentives and provided little in return 
since 2003.
We need better policy
    It is time for Washington and Brussels to get smarter. While hoping 
that Serbia will come to its senses sooner rather than later, both need 
to plan for a long period in which Belgrade, aligned with Moscow, will 
try to block NATO and EU expansion in the Balkans. Transitional 
democracies in Croatia, Macedonia, Albania, and Kosovo will have to 
share the Western Balkans with a backward-looking, resentful and ill-
spirited Serbia. NATO and the EU should move quickly to welcome as 
members those countries that are doing the right thing, in the hope 
that will encourage Serbia to come along.
    Washington and Brussels should also signal that they are determined 
not to give Serbia any more freebies. Ambassadors should be recalled 
for consultations on a new, coordinated EU/U.S. Serbia policy. The 
still unsigned Stabilization and Association Agreement should be taken 
off the table. The people, including Serbian security officials, who 
participated in attacking checkpoints inside Kosovo should be brought 
to trial quickly in a Pristina courtroom, under EU supervision.
    At the same time, Brussels and Washington need to make clear that 
there is a route out of the dead end into which Serbia has driven 
itself, provided it meets reasonable conditions. American and European 
Ambassadors should return to Belgrade once Serbia ends violence against 
the legitimate forces of law and order in Kosovo and begins to 
cooperate with NATO and the EU there. If Serbia turns indicted war 
criminal Ratko Mladic over to the Hague Tribunal, the Stabilization and 
Association Agreement should proceed. Serbian candidacy for EU 
membership should be conditional on Kosovo's entry into the U.N., 
currently blocked by a Russian veto threat at Belgrade's behest.
    By laying out a clear path forward to improved relations 
conditional on Belgrade's behavior, Brussels and Washington can over 
time bring Serbia out of its funk and enable it to occupy its rightful 
place in Europe. Offering more freebies without conditions will have 
the opposite effect, encouraging reactionary forces in Serbia and 
strengthening its alliance with Russia.
    I hasten to add that generous support should go to the courageous 
Serbs who have continued--despite the prevailing political winds to 
advocate human rights, free media, dialog with Kosovars and doing what 
is necessary to get Serbia into the EU. Likewise, Voice of America and 
RFE/RL should continue to broadcast in Serbian and Albanian.
Collateral damage
    Let me briefly address the issue of collateral damage due to 
Kosovo's independence, in particular in Bosnia and in American 
relations with Russia.
    In Bosnia, the only serious risk arises from Belgrade encouraging 
Serb separatists. Left to their own devices, Bosnia's Serb leaders 
prefer being someone in Sarajevo to being no one in Belgrade. The U.S. 
and EU need to make it clear that Republika Srpska can either exist 
within Bosnia, or not exist at all and have its territory--which was 
home to a Muslim majority before the war--become part of a unitary 
Bosnian state.
    With Russia, it is time to put Kosovo in the past, starting at the 
April NATO Summit in Bucharest. This can be done by considering 
Russia's interests across a wide spectrum of issues--including 
antiballistic missile radars, NATO enlargement and Moscow's ties to 
South Ossetia and Abkhazia. We need Moscow to abstain from using its 
veto to block Kosovo's U.N. membership. Without caving to the Russians, 
we need to ask ourselves what they will value that the U.S. can give up 
without high cost.
Conclusion
    We have done the right thing to join our European partners in 
recognizing Kosovo as a sovereign state, a move that has prevented much 
worse violence and instability than we have seen so far. We need now to 
repair relations with Serbia by delineating a clear path forward and 
patiently awaiting Belgrade's realization that its citizens will be far 
better off if their government embarks on it. It may take a long time 
for that to happen.

  STATEMENT OF IVAN VEJVODA, EXECUTIVE DIRECTOR OF THE BALKAN 
              TRUST FOR DEMOCRACY, WASHINGTON, DC

    Mr. Vejvoda. Mr. Chairman, thank you very much for this 
invitation to speak before the committee.
    I was here for the first time 4 years ago, in 2004. And 
reviewing what I had submitted then, things have greatly 
changed and, in other ways, have not changed. The theme then 
was the unfinished business in the Balkans. I think we are 
seeing the tail end of that unfinished business, as others have 
said.
    But let me say that, as the director of a grant-making 
organization supporting democracy throughout the Balkans, and 
sitting, in fact, in Belgrade, and being a citizen of Belgrade 
and Serbia, I would like to condemn, with others, the regretful 
events in the attacks of the United States???? and other 
embassies, and the violence that occurred on the night during 
which there was a peaceful demonstration where 200,000 people 
took part, and I am ashamed of what went on.
    I would also like to note that, unfortunately, we are going 
to commemorate next week the fifth anniversary of the tragic 
assassination of Prime Minister Dindic, with whom I worked 
during the last year of his life on all of these Euroatlantic 
orientations with Serbia.
    I mentioned that, because I would like to highlight the 
fact that we are dealing with a difficult legacy, as other 
post-Communist countries. And it's that legacy that bears on an 
accelerated path of Serbia and the region toward Europe. And 
there's nothing, of course, easy about that. And I would say 
that, given that legacy of communism and of the Milosevic 
1990s, Serbia has made important strides, clearly understanding 
that it could have gone much faster and could have done more in 
other respects.
    If we take The Hague Tribunal, 42 indictees have been 
handed over. Four have been left, of course; the major one, 
Ratko Mladic, should have been in The Hague many, many months 
ago, and hopefully, as the Serbian Government says, it will see 
to it that it advances.
    But clearly, we are now just barely 2 weeks after February 
17, and the declaration of independence of Kosovo, and this is, 
let's face it, a moment of difficult truth for Serbia, an 
emotional moment in which the links--the cultural and 
historical links of the Serbian people to Kosovo--
notwithstanding the reality after 1999 which de facto Serbia 
lost its practical sovereignty over Kosovo, and the moment of 
emotion, anger and mourning, I think, is still with us.
    But I would like to submit to you that we have an extremely 
vibrant discussion in the public opinion of Serbia, all over 
the press and the media, and in cafes, over what is the course 
that Serbia has to take. And this question of whether Serbia is 
going to toward the European Union or will choose an alliance 
with Russia is basically a nonquestion.
    The resounding victory of President Tadic on February 3, in 
the second round of the elections, speaks to the question that 
was asked a little while before, ``What do the Serbian people 
think?'' Time and time again, since 2000 and the victory over 
Milosevic, all opinion polls, deep and shallow, have shown that 
70 percent average Serbian opinion wants to go to Europe.
    Most recently, a poll showed that again, asking, ``What 
were the reasons?'' The reasons are, very simply, certainty 
about tomorrow, jobs, freedom of travel, and I think the 
European Union is absolutely right on working on a visa-free 
regime that hopefully will be concluded, or come close to 
conclusion, under the French Presidency of the European Union, 
which begins on July 1.
    I would beg to differ with my friend and colleague, Dan 
Serwer, on the issue of the Stabilization and Association 
Agreement. I think that Serbia should be offered, as it was--
because Serbia has, to remind you, initialed the Stabilization 
and Association Agreement--it has to sign it.
    Now officially, 26 Member States were for it on January 28; 
Holland, the Netherlands, were against it, and thus, it fell 
through.
    Why do I say this? For the same reason that many of us 
advocated Partnership for Peace, which I think rightfully NATO 
gave to Serbia, Montenegro, and Bosnia, and Herzegovina during 
the NATO Summit of Riga in 2006. I simply think that the 
principle to include is better than the principle to exclude, 
being on the European Continent, being the unfinished business 
of the European emphatic political peace project after 1945.
    Serbia is, in certain ways, of course, at a difficult 
moment with this reckoning of the Kosovo decision. But the 
victory of President Tadic, which I remind you won on a ticket 
together toward Europe. The government, I think it is important 
to say for the record here, is a majority government of pro-
European Union and pro-Euroatlantic parties. It is the 
Democratic Party of the President, and the G17+ Party of Mr. 
Mladjan Dinkic.
    The minority group is the Prime Minister's party, the 
Democratic Party of Serbia, and of course, the Prime Minister, 
being what he is, has a loud voice, and thus that voice is 
sometimes heard more loudly than that other equally significant 
part, both of the policy of Serbia and of the society that do 
want to go to Europe.
    I would even say that those who voted for the radical 
candidate in the Presidential election are also not against 
Europe, at least a good part of them. They voted for the 
radical party in a majority because of a strong social protest 
vote of dissatisfaction with the way transition has laid a cost 
at the door of many people who have lost their jobs and who do 
not see the future forward.
    Let me go on to say that with the events of the declaration 
of February 17, something that all of us feared did not happen, 
and that is the departure of Serbs from Kosovo. If you recall, 
that was very high on the list of everybody's preoccupation. 
Will we see another exodus of people?
    And I would say that that is the result of the joint 
efforts of everyone in the region, including the Serbian 
Government, that went down there and told people, ``Stay, we 
will see to it that your security.'' But, of course, the 
Pristina authorities, of NATO, and of Vanic.
    Second, I think we need to highlight--and it hasn't been 
mentioned here this morning--the excellent relationships that 
the Serbian military and the Ministry of Defense have with 
NATO, with the American military, and it is the Ohio National 
Guard that is the bilateral cooperation on the military side 
with the Pentagon here.
    I think that is very important to highlight as we address 
this issue of the Balkan's moment of truth, because I think 
that we can see through that relationship where the real 
substantive direction of the country is. And the Minister of 
Defense, Mr. Jorgen Shutanovitz, has played an extremely 
important role, as has the Chief of Staff, General Ponish, who 
is in constant contact with KFOR commanders.
    I dare make a comparison, just to give us a reality check 
here, to see the unfortunate events in Viaza these days, to see 
what has happened after the Armenian Presidential election 
where eight people were killed.
    I think we need to put things into perspective, that given 
the long arc after the fall of Milosevic, the Balkans have done 
rather well compared to other parts of the world, and there is 
one simple reason for that, and that is the word ``Europe.'' 
Because Europe with its soft power, the European Union 
attraction and magnet, have been doing their job, often in a 
messy and difficult way, but have in the end delivered.
    And I would say that the citizens of the Balkans, whether 
they're from Pristina or Belgrade or Zagreb or Sarajevo or 
Podriza or Sculpia, wants a peace and stability. We have done 
wars, we have done sanctions, we have done bombings in the 
1990s, and we've had hyperinflation.
    It is up to our leaders, which we have to push, as citizens 
and friends from the outside, to deliver on their promises of 
that future. And I think that we are close to that moment when 
we will go over the tipping point, and when countries become 
candidates. Serbia, Bosnia, and Montenegro have to become 
candidates. Hopefully, Albania, Macedonia, and Croatia will be 
invited. I think it is extremely important for the security of 
the region and for that path forward. We have many challenges 
ahead, and civil society is an important part of that.
    If I may add just one word, I think that, in Kosovo, and my 
organization, as others, have been working to foster 
development, we will need to Kosovo society to see to it that 
the advocacy and watchdog functions, not only of Kosovo 
authorities, but of international agents there, to see that the 
money of the European and other taxpayers are well being used.
    So I maintain, as I did 4 years ago in this hearing, that 
the glass is half-full and that we have to continue filling it 
with all our efforts.
    Thank you, Mr. Chairman.

    [The prepared statement of Mr. Vejvoda follows:]

 Prepared Statement of Ivan Vejvoda, Executive Director, Balkan Trust 
     for Democracy, the German Marshall Fund of the United States, 
                             Washington, DC

    Mr. Chairman, Senators, it is a great honor to be invited to speak 
today before this committee of the U.S. Senate at this important 
juncture in the history of the Balkans. As we confront the challenge of 
the status of Kosovo, stability and peace and the further consolidation 
of democracy and political modernity in the region are at stake. I am 
here to offer my personal views on the current situation and future 
outlook for the Balkan region
 introduction: the movement of the western balkans toward euroatlantic 
                              integration
    The region has made significant strides over the past 8 years 
toward Euroatlantic integration: Croatia and Macedonia are candidate 
countries for membership in the European Union (EU); Albania and 
Montenegro have signed Stabilization and Association Agreements (SAA) 
with the EU; Serbia and Bosnia and Herzegovina have initialed SAAs with 
the EU. All the countries of the region are members of NATO's 
Partnership for Peace Program (PfP). I believe it was an extremely 
prudent and judicious move to give PfP membership to Bosnia and 
Herzegovina, Montenegro and Serbia at the NATO Riga Summit in November 
2006. NATO's summit in Bucharest in April will most likely see 
invitations for NATO membership for Albania, Croatia, and Macedonia.
    Becoming part of Europe's post-World War II peace project--the 
European Community/Union is probably the single most important goal for 
the entire region. Becoming part of the collective security framework 
that is NATO for additional countries in the region will mean acquiring 
guarantees for further stability and peace. In fact, after the EU 
accession of Romania and Bulgaria to membership of the EU just over a 
year ago, the western Balkans have become somewhat of an inner 
courtyard of both the EU and NATO, being completely surrounded by 
Member States.
    The region has also moved ahead very significantly in terms of 
regional cooperation in many fields, most notably in establishing a 
common zone of free trade--CEFTA. There is an understanding that the 
western Balkans which have a joint population of approximately 20 
million people, must endeavor jointly to find their rightful place in 
the European and eventually global economy. Joining a European Union of 
close to half a billion people that is one of the strongest economic 
players in the world is of the essence.
    The integration dynamic is thus being pursued by the different 
countries at varying speeds and intensity. This positive dynamic has 
encountered and is encountering a number of obstacles that other 
transition countries have seen. All the countries of the western 
Balkans have significant unfinished business to accomplish. I had the 
honor, Mr. Chairman, of testifying in front of this committee in July 
2004 when the theme of our hearing aptly drew attention to the 
unfinished business.
    We are paradoxically both far beyond where we were 4 years ago, and 
confronted by many of the outstanding challenges. Why is this the case? 
Principally because this part of Europe underwent a unique dynamic 
after the fall of the Berlin Wall in 1989 different to other post-
Communist countries. Something happened in Europe that should not have 
happened: The violent breakdown of a European country--former 
Yugoslavia. This conflict lasted through the last decade of the 20th 
century and ended with the birth of six new countries, and now the 
unilateral self-proclamation of a seventh one has created a set of 
difficult challenges for the transatlantic community.
    It is essential that this remaining part of a more narrowly defined 
European Continent become as soon as possible, following the prescribed 
rules and conditions, each country on its own merits, a member of the 
European Union and of the Euroatlantic community. This will ensure the 
pillars of a lasting stability and peace.
    Finally, before beginning I would like to mention with great regret 
two events. I joined the President of Serbia and others in expressing 
my deep regret and condemnation of the violence and violent attacks on 
the U.S. and other Embassies in Belgrade on the night of February 21, 
2008. The second is to mention that in 8-days time, on March 12, we 
shall commemorate the tragic assassination of Zoran Djindjic, the Prime 
Minister of Serbia, a true statesman and leader whose vision of a 
democratic, prosperous, modern Serbia inspired a whole generation of 
Serbian society. I had the great honor of working with him during the 
last year of his endeavors.
                                 europe
    I believe that we have to state the obvious at the outset. It is 
the word Europe, the concept of an emphatically political peace project 
after a century of European killing fields that defines the framework 
in which we are discussing today's topic. The Balkans' moment of truth 
is Europe and the European Union.
    We unfortunately only need to look at the latest developments in 
the Middle East, or the current events in the aftermath of the recent 
Armenian elections (the tragic death of several individuals), to see 
that in comparison, notwithstanding all of the huge difficulties, the 
Balkans have their anchor in a much more stabilizing environment. The 
behavior, erratic at times, of all Balkan actors is being tempered by 
both the terrible consequences of the war-torn 1990s and by the 
concrete prospect of becoming part of that vast, however complicated, 
family of the European Union.
    The desire to become part of a success story which ultimately, 
through thick and thin, with all of its imperfections, nonetheless 
brings greater certainty and security, overrides other more irrational 
temptations.
                                 serbia
    Serbia is in many ways the key to the region's stability, security, 
and prosperity. All other countries are also fundamental to the process 
of stabilization and the creation of conditions for a lasting peace. 
But Serbia by its sheer size and geographical position is crucial to 
this process. It is the peaceful, electoral victory over Milosevic and 
his regime in 2000 that opened the road for the Balkans to fully embark 
on the Euroatlantic integration project. Serbia has reconfirmed at 
every subsequent election it democratic, European choice for the 
future.
    The resounding victory of President Boris Tadic in the second round 
of the Presidential election on February 3, 2008, just a month ago, was 
once again proof of this. His slogan of ``Together to Europe'' won the 
day; 2.3 million voters delivered a clear message to the political 
elite that there was no alternative to Serbia's future. I would submit 
to this committee, Mr. Chairman, the view that whatever is the 
temporary perceived interruption of Serbia's road to Europe--that road 
will continue.
    The strong showing of the opposition candidate from the Serbian 
Radical Party (SRS) bore at least a twofold message. It was in my view 
principally a strong voice of discontent from the part of Serbian 
society that had lost out in the preceding years of the transition 
process, citizens who had lost their jobs and who do not see a secure 
and certain livelihood for themselves in the coming years. The prospect 
of EU integration seems far flung for them. It was thus a vote of stern 
warning to the current and past democratic coalitions that have been in 
power since 2000 that they must begin delivering more jobs and a better 
standard of living, that they must show greater commitment to the 
public good. There is also a portion of that SRS vote that is not 
content with the way things have preceded with Kosovo's future status 
and the conditionality of the Hague Tribunal. In the election campaign 
the SRS candidate made an attempt to show a more moderate face of the 
nationalist party that it still is.
    In this overall context one needs to understand that Serbia is in 
its eighth year of transition. One has to hark back to 1997/98 to 
compare Serbia to where, for example, Poland or Hungary was. Yes; 
Serbia is a laggard and should be moving much faster. I am convinced, 
as I was with the victory over Milosevic's regime, and of the victory 
of Boris Tadic in the recent Presidential election, that Serbia will 
find it in itself to continue its reform process and path to EU 
integration.
    The current state of play in Serbia may not convince observers of 
this. The incumbent coalition government in Serbia, composed of the 
Democratic Party (DS) of President Tadic, of the Democratic Party of 
Serbia (DSS) of Prime Minister Vojislav Kostunica, and of G17+ Party of 
Minister Mladjan Dinkic--is in a state of crisis and discussion. The 
unilateral declaration of independence by Kosovo and Metohija on 
February 17, 2008, has put an immense strain on the coalition. The 
Government voted in May 2007, after the January 2007 elections, on a 
five-priority program: Defending the integrity of Serbia including 
Kosovo, EU integration, the fight against corruption, creation of jobs, 
and cooperation with the International Criminal Tribunal for Former 
Yugoslavia (ICTY).
    The majority of the government is composed of the DS and G17+ who 
are staunchly pro-European while at the same time defending Serbia's 
claims to territorial integrity and sovereignty and insist on the 
immediate resumption of the EU integration process. The Prime Minister 
and his party are holding a position that Serbia can only continue on 
its EU path by asking that Kosovo be an integral part of Serbia on that 
path.
    On March 2, President Boris Tadic reiterated the key point that 
Serbia should not and will not in any case isolate, self-isolate 
itself, because it would only do detriment to itself. He recalled that 
Serbia has 60 percent of its trade with the EU while only 5 percent 
with Russia and that Serbia must look to its well-understood self-
interest. The Deputy Prime Minister Bozidar Djelic just yesterday 
announced that the government will pursue implementation of the SAA 
while waiting to sign it. Minister Mladjan Dinkic has taken a strong 
line in invoking the need for realism and Serbia's economic and 
investment priorities. All these statements can be summarized in the 
following way: Serbia must not waste any more time in its democratic 
and economic reforms and its road to the EU.
    The debate has been out in the open, ongoing and very clear. Just 2 
weeks after Kosovo's unilateral declaration of independence that both 
the Government and Parliament of Serbia have declared null and void, 
this debate testifies to the vibrancy of the Serbian public sphere: 
Politicians, business people, journalist's, and civil society actors 
are all involved. The most regretful events of February 21, 2008, when 
violence occurred in Belgrade brought a sense of deja vu and a 
throwback to the 1990s with attempts at identifying ``traitors'' to the 
national cause and singling out particular civic leaders and media 
(B92) who are accused by nationalists of not towing the nationalist 
line. The response of strong public opinion was very important.
    Business leaders and investors have insisted for the greater part 
(the American Chamber of Commerce in Serbia for example) that nothing 
changes in their view as far as continuing business is concerned, 
provided basic conditions don't change and that Serbia resumes its road 
to EU integration without delay. Other facts though indicate that even 
this 2-week interruption lull in Serbia's EU intentions, have sent 
worrisome signals. The Belgrade stock exchange has lost percentage 
points, a certain number of potential investment arrangements have been 
put on hold and there is with some economic actors a wait-and-see 
attitude.
    What does all this signify? First is that Serbia is locked into a 
framework of relationships of mutual dependency, economic foremost, and 
it will only do detriment to itself if it decides to stay outside them. 
Reality presses strongly at the governmental door. Geopolitically the 
EU is without alternative, and the so-called Russian alternative is a 
nonstarter in spite of certain nationalist voices who believe that 
Serbia can relinquish the EU road, maintain certain commercial 
relations with the EU, and choose other allies (Russia, China, India). 
Russia is clearly, for other European countries, an important partner 
in energy. Just as Germany, Austria, or Bulgaria have signed 
significant arrangements on gas in particular, so has Serbia recently 
signed a deal on the South Stream gas pipeline. There are also many 
questions raised by government actors on the probity of the contract to 
sell the Serbian oil company NIS. This is still ongoing.
    Local elections are slated for May 11, 2008, and I believe that the 
Serbian governmental coalition will hold until then in spite of the 
severe turbulence it is going through--all coalition partners are 
saying that they are doing everything to maintain the coalition, 
although all have drawn their red lines. We will be wiser to the fact 
whether we will have early parliamentary elections as some analysts 
think in September or by years end, by the time of the local elections. 
The main question is when (in days or weeks or months) does Serbia 
resume its EU road, take advantage of the French EU Presidency 
beginning on July 1, because France is committed to helping Serbia gain 
formal candidacy for membership of the EU by the end of the year, and 
also finalize an agreement on full visa. liberalization for travel to 
Europe.
                                 kosovo
1.
    This was and will remain an enormous challenge. It comes at the 
tail end (as many surmised it would at the beginning of the breakdown 
of former Yugoslavia in 1991) of a series of wars and interventions. As 
the region and its individual countries have slowly found their 
foothold in the post-conflict and Euroatlantic integration dynamic, so 
have all stakeholders awaited the moment of the Kosovo decision. Now it 
has come. A unilateral (or coordinated) declaration of independence 
(that some European analysts have called more of a declaration of 
dependence) that was celebrated by the Albanians of Kosovo and with 
anxiety experienced by the non-
Albanian population in Kosovo. Serbia rejected, as it had announced 
this declaration and declared it illegal, and as one that tramples 
international law and the Helsinki Accords, and said that it would not 
recognize the independence of Kosovo.
    There is much uneasiness and wariness on the part of a number of 
states even within the EU with this move that has not been ``covered'' 
by the United Nations. To date about 14 EU Member States have 
recognized Kosovo as well as about 10 other non-EU states, including 
the United States. Although all EU Member States including Spain, 
Romania, and Slovakia have endorsed the EU mission, EULEX, and will 
send their personnel to be part of it. One might say it is still early 
days, but judging by commentaries in major daily press in the United 
States and Europe there seem to be many more questions than answers.
    Also the fact that the EULEX has been sent to overview and 
supervise judicial, police, and customs affairs, but without U.N., or 
U.N. Secretary General's (UNSG) endorsement begs many a query. In fact 
the exchange between Pieter Feith, the EULEX mission leader, and the 
spokesperson of the UNSG reveals the state of international legal 
confusion at the moment.
    I wrote in my testimony to this committee on July 14, 2004:

          When domestic actors are incapable of solving a contentious 
        issue and require a third party to mediate then all parties 
        become stakeholders. The crucial stakeholders are the domestic 
        ones and unless they arrive at a solution based on compromise 
        through negotiations then no solution will be found, or only 
        half measures will be achieved. The lack of a solution in 
        Cyprus because one of the key communities was not on board the 
        agreement is an example of this, again all things being equal.
          In Kosovo as in other similar/dissimilar seemingly 
        ``intractable'' conflict or post-conflict situations (Northern 
        Ireland, Kashmir, Sri Lanka, Basque country, Israel-Palestine, 
        etc.) the solution is in bringing the voices of moderation, 
        pragmatism, and realism forward while blunting the arguments 
        and basis of grievance of the extremists wherever they may be. 
        The engaging of the dialog is essential--in this case between 
        Albanians and Serbs. This long and arduous dialog had just 
        begun, but was interrupted. It should be resumed, reengaged, 
        and broadened.

    Negotiations that were engaged 2 years ago, and then continued 
under the auspices of the troika (U.S., EU, Russia) bore no results. 
This is the result and the reality we have today.
    Mr. Chairman, however satisfactory this outcome for some, 
principally for the Albanians in Kosovo, and unsatisfactory to others, 
principally Serbia, allow me to dwell on several aspects.
    I mentioned above the fundamental importance of the overall 
European framework of these developments. All actors agreed to not 
engage in violence. The key interlocutors from the Belgrade and 
Pristina side signed off on such a pledge during the troika talks. The 
Serbian side many times over said and kept its promise that the army 
would not be engaged, nor used in any way whatever the outcome. 
Moreover, the intensity of the contacts between the Serbian Ministry of 
Defense, the Minister, and the Serbian military with NATO and KFOR 
commanders has been crucial to the relatively stable and peaceful turn 
of events during this whole very precarious process. There is a clearly 
defined political desire to maintain as fully as possible the 
conditions of stability and peace established over the last 4 years, 
i.e., since the most regrettable events of March 17-18, 2004, when 
another 4,000 Serbs were cleansed from Kosovo, churches burned and 
Serbian property destroyed. This is a major wakeup call about how badly 
things could go if unattended to, and all parties interests catered to.
    Since 2004 the level and intensity of communications between 
international and domestic actors have proven to have had a positive 
effect. The EU perspective opened for the whole region at the EU 
Thessaloniki Summit in June 2003 holds firm and has been reiterated and 
helps maintain clarity of purpose.
    Also, one the greatest fears were that we all might witness another 
exodus of the remaining Serbs from Kosovo once a unilateral declaration 
of independence occurred. This has fortunately not happened, again 
thanks to all involved including the Serbian Government that in the 
final days of the runup to the declaration went to the Serbian enclaves 
and spent time with the people to reassure them that their security 
would be respected and enforced. We have overall seen, again 
fortunately, little degree if no violence. All of these are important 
achievements that must not be underestimated or forgotten because they 
speak to the deeper and more substantive intentions of the actors.
2.
    There is another reality in Kosovo, which is that the northern 
municipalities where Serbs are the dominant population are not under 
the control of authorities in Pristina, but under UNMIK. Overall in the 
north in Kosovska Mitrovica events have been relatively peaceful, 
except again for the very regrettable, but isolated events, of the 
burning of the two customs posts in Jarinje and Barnjak, on the 
administrative border with Serbia proper.
    A majority of Serbs living in Kosovo live south of the Ibar river 
in bigger or smaller enclaves and have decided to stay. The EULEX 
mission is beginning to install itself while U.N. Security Council 
Resolution 1244 and UNMIK remain in office under the U.N. SRSG Joachim 
Ruecker. This maintenance of UNMIK is, I believe at this moment, 
extremely important because it allows for normal communications between 
all the parties present and especially in the north. The Serbian 
Government and its Ministry for Kosovo and Metohija have pledged to 
Serbs that they will help them in their daily lives. It is crucial that 
the ongoing contacts between the U.N., UNMIK and the Serbian 
authorities are intense and constant, just as those between the 
military, for the sake of maintaining the peace.
    What will happen eventually with the North--remain part of Serbi, a 
reintegrate into Kosovo (which it has not been for all of these years) 
or have some lasting in-between status--is very hard to predict with 
certainty at this moment. As is well known even the negotiators of the 
troika at certain moments spoke of partition as a possible solution if 
the parties directly between themselves agreed to it. Both Belgrade and 
Pristina have officially rejected this as a possibility. But the 
reality on the ground is that the north is separate from the center and 
south of Kosovo. What will this reality lead too? At this stage it is 
most important that in the lives of people living there nothing changes 
for the worse, that their sense of certainty and security be 
progressively enhanced.
    The overall movement of the Balkans toward the EU will or should 
overtime temper some of the outstanding tensions and unresolved issues. 
Timothy Garton Ash in a recent article wrote: ``Indeed, if things go 
well in Europe's southeast and badly in its northwest, Belgium and 
Kosovo may yet converge: The Balkanization of Belgium meets the 
Belgianization of the Balkans.'' In other words the coming and 
strengthening EU framework can help continue to diffuse tensions and 
maintain them in a political setting.
3.
    The Albanian leadership will very soon be confronted with the dire 
reality of the (non) economy of Kosovo. It is the least-developed 
region with the lowest income in Europe, even more so than Moldova. It 
has the highest unemployment and the most youthful population. The 
pressure on the labor market is enormous. Remittances are one of the 
most important income resources. Kosovo is plagued, as other countries 
in the region, with problems of corruption, trafficking, drugs and arms 
smuggling and often with elements of collusion between political 
parties and their own private security services.
    Some analysts are talking of a potential failed state and a very 
long-term responsibility that the EU is taking over--in fact the 
creation of a long-term EU protectorate. The lack of success of the 
UNMIK mission in creating full security and managing infrastructure 
(electricity has been a dismal failure), and the failure of the 
``Standards before Status'' policy are stark warnings to those who 
follow. Whatever the reality that will develop and whatever the legal 
wrapping that will be found, a huge investment in all areas will be 
required for the region at large, all of its states and Kosovo in its 
new form to begin seeing the contours and the effects of the European 
peace and prosperity project. The stabilization of the Balkans is 
conversely also a test for the EU's security strategy.
    In Kosovo much needs to be done on strengthening civil society as a 
countervailing force to that of the political actors. The need for 
advocacy and watchdog activities will be paramount.
    Investing in good governance, the rule of law, and human rights in 
all of its dimensions must go hand-in-hand with serious efforts of 
investment into infrastructure. The fight against corruption and for 
greater transparency is the precondition for the creation of an 
investment climate conducive to new investments creating jobs. All this 
requires focus, resources, and time.
    The role of bilateral and multilateral donors as well as 
international financial institutions is essential to the success of the 
region as a whole. Were it possible to invest in regionwide 
infrastructure projects the result would potentially be more 
effective--alongside in-country projects.
    One word on the endeavors of the Balkan Trust for Democracy (BTD), 
which is a project of the German Marshall Fund of the United States in 
a public-private partnership with USAID, and the C.S. Mott foundation 
(Flint, Michigan). This 10-year project launched in 2003 is active in 
all of the western Balkans as well as in Romania, Bulgaria, and 
Moldova. It has been joined over the past 4 years by European donors, 
including the Greek, Dutch, Swedish, and Danish Governments that have 
made significant contributions; and also private European foundations, 
including the Compagnia di San Paolo (Turin, Italy); Robert Bosch 
Foundation (Stuttgart, Germany); Tipping Point Foundation (Sofia, 
Bulgaria). Thus BTD is now a truly transatlantic effort at democratic 
institution and capacity building for governance and civil society 
projects in the Balkans. It has been met with great enthusiasm and 
expectations. As certain donors prepare to scale down and leave, others 
such as the Balkan Trust are contributing to the long-term effort of 
democratic consolidation and empowering the citizens of the region.
                               the region
    All countries of the region are approaching the question of 
recognition of Kosovo's independence with great circumspection, wishing 
to contribute to stability by their cautious approach and waiting for a 
significant number of principally EU Member States to recognize before 
they do, if they do.
    Bosnia and Herzegovina is particularly exposed to the turbulence of 
the Kosovo decision. The Parliament of Republika Srpska, an entity of 
Bosnia and Herzegovina, has made a decision on a possible referendum if 
its status in BiH were threatened to change. Very briefly, I believe 
that at this point in time the Dayton Accords and the resulting 
constitution of BiH stand firm and there is no immediate danger of 
seeing Bosnia and Herzegovina disintegrate. If the entities of Bosnia 
and Herzegovina are respected then it will continue peacefully into the 
future with all the challenges that it has.
    The region, as I mentioned earlier, is part of a regatta moving 
toward EU integration. Macedonia, a candidate member, will hopefully 
get a date in 2009 so as to start the long negotiation process for 
entry into the EU. Macedonia and Greece additionally must find it in 
themselves to overcome the 16-year-old dispute over the name of the 
country--because this will additionally stabilize the region.
    The invitation for NATO membership to Albania, Croatia, and 
Macedonia will help give additional guarantees for security, stability, 
and peace. The 50th anniversary of the existence of the EU last year 
speaks to the fact despite many obstacles it has managed to incorporate 
27 members, constituting nearly one-half billion people. The EU has the 
potential to historically diffuse the powder keg of Europe and possibly 
bring the region, in a positive virtuous circle effort, into or close 
to membership by 2014.
                         citizens and democracy
    Citizens in one part of the Balkans have experienced extreme 
hardships since the early 1990s while other post-Communist countries 
rushed to secure their long lost place in Europe. It will be 20 years 
since the fall of Communism and yet the Balkan region is still not 
completely secure from backsliding.
    The citizens of the Balkans--wherever they may find themselves--do 
not wish to see a repeat of wars, sanctions, hyperinflation, or 
bombing, and they do not wish to feel fear, uncertainty, and 
insecurity. Through the democratic process, citizens now have 
legitimate democratic leaders. They wish their leaders to be 
responsible and in the words of Isaiah Berlin do what responsible 
governments do: ``Avoid the extremes of suffering.''
    The immediate and mid-term future is about consolidating these 
initial democratic foundations, further strengthening the sense of 
certainty and security about tomorrow through the creation of jobs and 
incrementally improving living standards. These are again historical 
crossroads for a part of the Balkans, yet because some lessons have 
been learned and Europe is the framework, we could be very cautious in 
saying that the glass is still half full.
    Mr. Chairman, Senators, let us humbly try to continue to help fill 
it.

    The Chairman. Thank you very much, gentlemen. Let me begin 
where our last witness left off.
    Gentlemen, what is your view about the assertion just made 
that the vast majority of the Serbs see a future in Europe, but 
not with Russia? And that the implication is that, over time, 
this glass is half-full, and that impetus will, in fact, carry 
the day, in terms of--I assume you're suggesting--in terms of 
Serbian domestic politics.
    Would you two comment on that, please?
    Mr. Serwer. I would only say that I think the pro-European 
perspective won't carry the day, unless we make it clear what 
the path is. Mr. Tadic ran on a platform of Kosovo and Europe. 
That option isn't available. Let's face it. We have taken that 
option off the table.
    So it's now Kosovo or Europe. It's not even Kosovo or 
Europe; it's keep on fighting, or go to Europe. It seems to me 
that we have to make this choice very clear, and it's not 
certain how Serbia will choose. But I know that if we make it 
cost-free to continue in the current path, then they don't have 
any incentive to choose a different one.
    The Chairman. If I could interrupt you before you--before 
the next response.
    Mr. Serwer, you indicated that we should look to Russia to 
``give up something, to make it clear we want to put Kosovo 
behind us.''
    It seems at odds with your notion of how you should deal 
with Belgrade and Serbia. You want to make sure that we take 
away from Serbia. I'm just being the devil's advocate here.
    Mr. Serwer. Yes.
    The Chairman. To take away from Serbia and Belgrade what 
has been placed on the table, in terms of a path to Europe, a 
path to the West. Yet a protagonist in this little adventure 
has been Moscow, and you're saying we should do the opposite 
with them. We should say, ``Look, we had more important fish to 
fry. We're prepared to give up something to demonstrate to you 
that Kosovo is behind us.''
    Mr. Serwer. I think we have more important fish to fry with 
Russia. We need Russia more than we need Serbia. Serbia needs 
us more than they have realized lately.
    The Chairman. Right. But----
    Mr. Serwer. It seems to me that we have to recognize what 
our negotiating position is. It's relatively strong with 
Serbia, as long as we can stay united with the Europeans. The 
Europeans have the main leverage. With Russia, the situation is 
quite different, and it seems to me that we have to recognize 
that.
    The Chairman. Let's put it another way. Russia, or Serbia 
without Russia, doesn't have much of a negotiating position at 
all. Does it?
    Mr. Serwer. No; it has not.
    The Chairman. And so by, in effect, rewarding Russia for 
its recalcitrant conduct, you don't think that just continues 
to encourage them to continue to support what a fairly extreme 
position they're taking?
    Mr. Serwer. I think you have to make a deal. Our 
unwillingness to deal with Russia on Kosovo, our conviction 
that Russia would come along, because they had participated in 
the Ahtisaari negotiations, was wrong. I think we were 
snookered, frankly.
    We gave up, in the Ahtisaari Plan, everything that Serbia 
and Russia asked for. We thought that would buy acceptance of 
Kosovo's independence. We are now imposing the Ahtisaari Plan, 
which was negotiated on the basis that Serbia would recognize 
Kosovo. We're now forcing the Albanians to implement that Plan 
without recognition. It was----
    The Chairman. Can I ask you a question?
    Mr. Serwer. I think we were had.
    The Chairman. But, the fact of the matter is, isn't the 
plan something that we would be pushing, whether or not Serbia 
exceeded----
    Mr. Serwer. There are many aspects of the plan that are 
very good. I think there are some that are very troubling.
    The Chairman. Name one for me, please.
    Mr. Serwer. The direct financing by Belgrade of communities 
inside Kosovo, for example. If that's done in a collaborative 
sort of way with the Pristina authorities, I can see how it can 
work. If it's done as it has been done in the past, 
surreptitiously, without collaboration with Pristina, it will 
be the prelude to partition, which is in the end the bottom 
line that Belgrade is looking for.
    The Chairman. Thank you.
    Mr. Bugajski. Thank you, Senator. If I could just try and 
tackle those two questions----
    The Chairman. Please.
    Mr. Bugajski [continuing]. With Russia and Serbia's 
position vis a vis, Europe and Russia.
    The Chairman. I'd like you to tackle the first question, 
first.
    Mr. Bugajski. The first one first? My view of the Serbian 
population--this is a European population, they're European 
oriented--I don't think Russia gives them really a viable 
choice. What it does give them in Kosovo is a sense of 
temporary empowerment, vis-a-vis the international community. 
But I think that will wane, because I don't think Russia is 
going to force this issue too far with us.
    Second, I would say the problem in Serbia is that the 
population does not know enough about the European Union. One 
often hears statements from Kostunica that this is a club in 
which everybody should welcome Serbia. This is not the case.
    You don't negotiate entry into the European Union. You meet 
conditions for entry into the European Union. And that's a long 
process. And Serbia can learn from its neighbors. There should 
be closer links with Bulgaria, with Romania, to see how these 
countries actually managed to get into the European Union, and 
what a tough, long-term process it was. And Serbia is not even 
at the starting point yet.
    The second question, on Russia, I don't quite see what Mr. 
Serwer means about compromising with Russia on other issues. I 
think the best way to deal with Russia is to make clear what 
our values and interests are, and to stick to them, including 
questions, for example, of NATO enlargement. This is one area, 
the MAPS, for example, for Ukraine and Georgia, where Russia 
may be pushing us to desist and not to give those invitations. 
I think it would be a huge mistake for us to give way on one 
vital security question in order to gain on another security 
question. I wouldn't link the two.
    The Chairman. Thank you. My time is up.
    Senator Lugar. A mention was made by Secretary Fried that 
if investment is to come into Kosovo, there really has to be a 
banking system that is going to accommodate and secure the 
money.
    A banking system that is fair transparent by our standards. 
A system we would have confidence in. We gave at the breakup at 
the former Soviet Union a lot of advice to Russia about the 
imperative need to have such a banking system there; and, 
likewise, a Rule of Law with regard to property rights. And 
this, combined with a judicial institution that breathes 
confidence.
    These are very tough things to bring about. I cite, at 
least what I think is the beginning of a success story in 
Albania. Simply because of circumstances of Albania discovering 
nerve gas in the mountains above Tirana, I went to Albania in 
2004, with Defense Department people, we discussed the threat 
the chemical weapons posed and made plans for Nunn-Lugar to 
destroy it. We also encouraged Albanians to make important 
reforms in the judiciary and in property rights and ownership, 
and confronting corruption.
    And although important progress was made, only now, some 4 
years later, are some prosecutions occurring of malefactors. 
There is a beginning of a system that might bring confidence, 
and it's come largely because of search for NATO and U.N. 
membership. But it is important to note that this took 2, 3 
years and considerable intercession by outside friends and 
organizations.
    What I'm concerned about in the next year or two in Kosovo 
is not collapse of governance but lack of economic options. 
While the world is worrying about partition, what investment 
occurs inside the country as we are trying to have the donors' 
conference is critically important.
    Is there leadership ability--without knowing who the 
leaders are going to be--or some sense of civic consciousness 
about the necessity of these institutions being built, even 
under the stress that we've discussed of the external events 
that are occurring?
    Do any of you have any comment about your confidence in the 
ability of people of the country to build these institutions, 
and therefore express confidence that this state will be 
successful in serving these people?
    Mr. Bugajski. Let me just say a few words about this. You 
are absolutely right. And I think the voter turnout at the last 
elections in Kosovo indicated that the majority of the 
population is concerned about the government performance, 
economic conditions, social conditions, the future for their 
children, and these are the key issues.
    Another important reason for independence is that now the 
status question is out of the way, politicians cannot hide 
behind campaigning for independence. Now, they have to deliver. 
And I think a priority item--you've listed them. I'm not going 
to repeat, but I think an efficient, competent government that 
delivers services, attracts investors, helps to establish the 
rule of law, reforms the judiciary, and itself is a model of 
anticorruption. In other words, absolute openness, transparency 
in their operations.
    This is what I hope the European Union is going to focus 
on, rather than micromanaging every government decision, but 
primarily to keep this government honest.
    I can't tell you what the performance will be, but I think 
it's a good start. The new ministers are not replicas of 
previous governments. I think you need young people coming in, 
as we've witnessed in Bulgaria and in Macedonia, people with 
experience of Western government, Western business practices. 
And I think they can learn a lot, also, from their neighbors in 
Albania, which as you said, is beginning to make some progress 
on these questions.
    Mr. Serwer. Senator, let me address your specific question 
about the banks and the judiciary. Kosovo is a very small 
place. It is extremely difficult to get people to testify in 
certain kinds of criminal cases in Kosovo. Corruption in Kosovo 
is a serious problem.
    I think you're going to have to import from the rest of 
Europe parts of the judiciary that are required to handle 
interethnic crime, and I think you're going to have to import 
some banks, as well. That's how the rest of the Balkans has 
found some decent financing. Austrian banks seem to be 
particularly active in this respect.
    The judiciary will have international prosecutors, European 
prosecutors, and judges under the scheme that is now being put 
in place, with Pieter Feith as its head. But I don't think that 
we should exaggerate the problems. I checked, in preparing for 
this hearing, how many Serbs had been killed by Albanians in 
the past 4 years, since the rioting in 2004. The number of 
confirmed murders of Serbs by Albanians since 2004 is one. 
There are maybe three or four other uncertain cases, where it's 
just not clear who the murderers were.
    So we're not talking about an enormous problem here. We're 
talking about a serious problem that has to be dealt with by 
internationals.
    Senator Lugar. Thank you very much.
    The Chairman. Governor.
    Senator Voinovich. Your attitude is that we tell Serbia 
this is the way it is going to be and it must do certain things 
on this road, and that perhaps the Ahtisaari Agreement gives 
more to Serbia than it should.
    The truth is that I don't really believe that the Serbs 
participated as aggressively as they should have in the 
negotiations of the agreement because I think some of them felt 
that participation would equate to support for Kosovo. However, 
I believe that those who did negotiate the agreement tried to 
add as much as they could, assuming that independence was 
inevitable, and that therefore those components should be a 
part of the plan in order to ensure its success.
    Most important, what should we continue to do for the 
Serbian people to show that we understand they are unhapppy, 
but that we encourage them to embrace the future and support 
the instincts of President Tadic?
    Mr. Serwer. I think that was intended for me, Senator.
    Senator Voinovich. Well, I think it's for all three of the 
witnesses.
    Mr. Serwer. Let me give it a start, then. I think we should 
remain very much in dialog with Serbia. I think we should be 
talking. I think we should be encouraging. I think we have 
provided a great deal of assistance. We should make it clear 
that we're prepared to provide more under certain conditions.
    We should also provide absolutely maximum protection for 
Serbs in Kosovo. This is extremely important, not just to me 
personally, but also for American policy and frankly for the 
sake of Kosovo and the region as a whole.
    The current situation, which has been fairly good, should 
not just continue, but should improve. Kosovo Serbs should 
genuinely feel that Kosovo is their home and that they are not 
just tolerated but welcome. And that they will eventually 
participate in governance there, as well.
    Senator Voinovich. And the Ahtisaari Agreement has some 
pretty significant provisions?
    Mr. Serwer. The Ahtisaari Plan, in that respect, has some 
significant provisions that have been discounted to zero by 
Belgrade, so far as I can tell. No one in Belgrade has stood up 
and said, ``These provisions are of value to us.''
    That includes President Tadic, as well as Prime Minister 
Kostunica. That is not what they are saying in Belgrade these 
days. And we need to be there encouraging them to say these 
things.
    I think we need to coordinate our policy much more 
effectively with the European Union than we have in the recent 
past. I think we should have a joint Serbia policy. We have not 
had a joint Serbia policy. I think we can achieve much more 
together than if we act separately.
    Senator Voinovich. Do you think the Europeans understand 
how significant this undertaking is? And not only to the 
stability there, but to the future of Europe?
    Mr. Serwer. I think they do, Senator, but I will tell you 
that the Europeans have a congenital problem, and that's 27 
members. And it is very difficult for them to act decisively.
    The reason the Americans end up in the leadership on 
Balkan's issues is not because we have more at stake in the 
Balkans, but because we can decide things more clearly, more 
effectively, than the Europeans can when they have to reach 
agreement of 27. And they are not going to reach a clear, 
compelling agreement at 27 without American leadership.
    Senator Voinovich. Do the other witnesses agree with that?
    Mr. Bugajski. If I could just add, I fully agree. I think 
our hand needs to be outstretched, of course, to Serbia. Serbia 
belongs in all European and Transatlantic----
    Senator Voinovich. I can tell you one thing, partnership 
between the Ohio National Guard and Serbia's military is one of 
the most robust state partnerships in that part of the world, 
Mr. Chairman, we had the same partnership with Hungary when I 
was governor.
    The Chairman. Who are they voting for in the Primary?
    Senator Voinovich. You sure know more about that than I do.
    The Chairman. Maybe you can tell me that later.
    Senator Voinovich. The Serbs may be boycotting the whole 
election. We have the International Military Education and 
Training Program and Foreign Military Funding there, which 
demonstrates that positive progress is going on.
    Mr. Bugajski. Yes, sir; I fully agree, and I think that 
many military personnel benefit from that cooperation in the 
security sector and may want closer cooperation with NATO, as 
we've seen in other countries in the region.
    This is why I think NATO enlargement is critical, to 
demonstrate to Serbia that there is a path, if it does meet 
certain conditions. But I think we will probably have to wait 
until the new elections to see how the political forces shape 
up.
    I would add one thing, though, in terms of what Dan has 
said. In addition to having a coherent policy toward Serbia, a 
Transatlantic policy with Serbia, we also need a coherent 
Transatlantic policy toward Russia. We need to demonstrate to 
Serbia exactly what Russia's objectives are.
    The Russian energy business and political influences, which 
are being injected in the country and other parts of the 
Balkans, are actually negative, regressive, and detrimental to 
Serbia's progress toward NATO and the European Union, and will 
not allow them to meet the conditions for membership because 
they're based on corrupt business practices on shady 
transactions, on the lack of the rule of law, unwarranted 
political influence, and where elites benefit but the public 
doesn't.
    Plus, of course, one must eventually have a common strategy 
on such questions as energy security between the United States 
and the European Union, vis-a-vis, Russia. I think all these 
questions are essential because most people in Serbia want to 
be part of Europe; although, they don't quite understand how EU 
institutions function, starting at the elite level, but second, 
there are also a lot of people who don't understand Russia.
    In other words, this isn't Yeltsin's Russia, this isn't 
Gorbachev's Russia, this is what I call a Checklistocracy, 
Putin's Russia with or without Putin as President.
    Senator Voinovich. Thank you.
    Mr. Vejvoda. May I add a few words? Thank you very much. On 
the European Union, I think the European Union fully 
understands what this is all about, and that this is a very 
important test for their security policy, in general. And it's 
interesting to note, I think, and it's not raised very often, 
but the countries that have problems with recognition, like 
Spain or Greece or Bulgaria, they are all part of the EULEX 
mission. So they will all give judges, policemen, prosecutors, 
customs officials, and I think that's very telling about how 
they understand their responsibilities for the future, and 
ultimately, as you heard, it is the European taxpayer that will 
be footing this for many years to come.
    So I think agreeing that the 27 members is the problem, 
that doesn't belie the fact that they understand their 
responsibility.
    I would like to add that Serbia, the major investors in 
Serbia, over these 8 years have been the United States and the 
European Union. And, in fact, it is interesting to note that 
the major exporter from Serbia, the one that accounts for 12 
percent of all of Serbian exports, is a company called U.S. 
Steel, worth $660 million last year. And I think, again, one 
should read the situation by these hard facts of the economy, 
of military relationships, of the intentions of the Serbian 
public.
    And finally, as far as European Union is concerned--and I 
don't know exactly what Janusz Bugajski meant about Serbia not 
understanding what the European Union is. Yes, clearly, the 
broad public opinion doesn't know all the niceties and 
complications of the acquis communautaire, but the Serbian 
administration has been valued by European Union negotiators.
    It's probably the best negotiating team they have 
encountered throughout the enlargement process. And maybe even 
more importantly, one must not underestimate the number of 
contacts that all of the negotiating teams of the Balkan 
countries have on a daily basis.
    Serbian negotiators speak to Zagreb, Croatian negotiators, 
the Slovenian negotiators, Montenegro negotiators call up their 
colleagues in Belgrade to ask them for tips about how to do 
certain things. So there's much more than meets the eye at the 
level of the regional cooperation on the road to Europe.
    Senator Voinovich. Thank you.
    The Chairman. Gentlemen, I'd like to follow up, and I don't 
want to hold my colleagues up. I know they have a lot to do. 
And I'm holding you up, as well, but if I could take just 
another few minutes.
    If I could step back and let's all take off our foreign 
policy hats, where we're the ``experts,'' I love how those of 
us who spend most of our life dealing with foreign policy, we 
make it all sound so complicated. And it is complicated. But it 
is not nearly as complicated as health care, to put it in 
perspective.
    And I often kid with my sister, who's in the audience, 
who's smarter than me, and who's managed all my campaigns, that 
foreign policy is--I guess I've been around long enough I can 
say this--is little more than the logical extension of personal 
relationships without as much information to act on. And we 
make it so complicated.
    Let me just try to step back. If I'm an ordinary American 
citizen, and I'm out there doing what I did before I became a 
Senator, and practicing law in the community. What about the 
following notion? That first of all, as our dear mother would 
say, ``Time sometimes is healing.''
    The idea that the Serbs are going to in the near term 
accept, embrace, swallow, accommodate, whatever you want to 
call it--almost any Serbs--the independence of Kosovo and 
acknowledge it, is pretty remote.
    But second, the people tend to sometimes know their self-
interest better than their governments do, because they have 
less at stake in terms of self-interest. And that they all--not 
all--a significant portion of the Serbs see the future in 
Europe, not in Russia.
    And they understand what a sea of oil money can do and how 
much that can increase influence; but nonetheless, they see 
their kids looking West, and not East.
    And third, that maybe what we should do is not do much of 
anything, except really focus on what Senator Lugar is always 
pointing out correctly, that the real hard stuff is the 
institution-building. The really difficult stuff is making 
Kosovo viable. The really difficult part is not withstanding 
the interference and objections and troublemaking by Russia and 
by Serbia.
    I spent--I haven't been there recently--but I spent a lot 
of time in Kosovo, a lot of time in the Balkans, you know, a 
dozen or more trips in and out. Matter of fact, my oldest son 
was there for--assigned there for years as a Justice Department 
representative, trying to help set up the criminal justice 
system.
    But it's really hard going in Kosovo, even if Serbia wasn't 
being obstructionists. It's really sort of hard going setting 
up those institutions. We sort of glossed--you didn't--we sort 
of gloss over the extent of the corruption, that it is real, 
and that it is 90 percent Kosovar environment, this Albanian-
accommodated environment, and not the country of Albania.
    And so, what about the idea of us increasing our focus with 
our European friends on the institution-building in Kosovo, and 
making it clear through the European institutions that a 
partition of the northern part of Kosovo is just not going to 
be tolerated? And essentially, without even there being 
punitive or reaching out a hand, we just focus to Serbia? We 
just focused on those two things?
    Respond to that, if you would, each of you, briefly.
    Mr. Serwer. If I may, Senator, I agree with you entirely 
that building up institutions in Kosovo, and in Serbia, for 
that matter, is a vital part of the solution here. It is a 
long-term effort. We should start it now, and keep our focus on 
it.
    I'm a believer that you get where you want to go over time, 
only if you're pointed in the right direction. I don't think 
Serbia, at the moment, is pointed in the right direction. 
There's still a bit of a struggle for where Serbia will be 
pointed. But for right now, it's pointed in the direction of 
Russia. This is unfortunate. It is unfortunate for the United 
States, it's unfortunate for Kosovo, it's unfortunate for 
Serbia.
    The Chairman. I've been very, very, very consistent and 
persistent, and I think maybe the first very harsh critic of 
Serbia, and the Serbian people in Serbia, and their put-upon 
notion that they're the victims of history, and so on. But I 
don't agree with that assessment that they are pointed toward 
Russia.
    I think their present political leadership, on the one 
hand, part of it doesn't have the courage to run the risk of 
taking on the Prime Minister and a minority but controlling 
party.
    It seems to me the starting premise is either that you 
think that things have changed so much since Milosevic in 
Serbia, as it relates to average Serbs thinking, that 
ultimately they can control their destiny through their 
institutions, including elections. Or you continue to conclude 
that they're all incredibly--not all--a vast majority 
incredibly susceptible to the age old appeal to virulent 
nationalism, and their Slavic connection with their Russian 
brothers.
    I find myself starting accepting the former premise, not 
the latter premise. But--and you seem to operate on--I realize 
that I'm putting words in your mouth here, and so please don't 
let me do that. Correct me. But you seem to be operating on the 
premise that the political leadership is pretty much in sync 
with where the population is and that it has another trajectory 
of rejecting Europe and looking to Russia.
    Mr. Serwer. Well, I do. They had opportunities to reject 
the course of the current leadership. They haven't taken those 
opportunities. I do believe, ultimately, I have the same 
confidence you have, in Serb citizens eventually to choose the 
European direction, which is rightfully theirs. But I don't 
think they're headed in that direction right now, and that's 
why I am concerned about providing the right incentives to 
shift them back to that direction. Because if we continue 
providing things without conditions, and I think that has been 
our policy since the fall of Milosevic, I'm just afraid they'll 
do what they've done so far, which I think is to pocket those 
concessions and not turn in the right direction.
    So it's not that I lack confidence in the----
    The Chairman. No, no. I----
    Mr. Serwer [continuing]. Serbian people.
    The Chairman. I understand.
    Mr. Serwer. I have the same confidence you have, but I want 
it to happen as quickly as it can, and I think that giving the 
right incentives will help that to happen.
    The Chairman. Gentlemen. Either one of you want to make a 
comment?
    Mr. Bugajski. Just to add, I think, the Serbian population 
is probably very confused and angered by the situation, but 
they're certainly not pro-Russian.
    They are pro-European, although I would reiterate again, 
they need to understand better--not Europe, but the 
institutions of Europe----
    The Chairman. Yes.
    Mr. Bugajski [continuing]. Including the elite. It took a 
long time for the new members to understand how the EU 
operates. And if Serbia is a good negotiating partner with 
Europe, it's not only a question of institution building, but a 
question of institution joining. But that's a long-term 
process.
    The Chairman. Yes.
    Mr. Bugajski. Hopefully at the next elections in Serbia, a 
clearer choice will be made by parties on exactly what they 
have to propose for Serbia's future, without continuously 
harking back to Kosovo.
    The Chairman. I think you're right. Look, I mean, politics 
is about--I know the old bad joke, ``It's all local.''
    I mean, the truth of the matter is that, ironically--and 
far be it from me, I can't predict American elections, let 
alone elections in other countries--but you have taken away, in 
a de facto sense, the continued Serb dominance of Kosovo, or 
Kosovo being a part of Serbia. When that's off the table, all 
of a sudden these nationalist parties have to start talking 
about jobs, and bread, and opportunity, and a lot of other 
things that I think change the dynamics.
    That's assuming that it's not escalated to the next point, 
that the next issue is the independence of northern Kosovo 
along the river. There are two things that I'm beginning to 
think about: We should be focusing much more on making sure 
Kosovo is viable and survives economically and politically, and 
grows, and learns, which as you point out, is a difficult 
lesson for every one of these countries to have learned so far.
    In the expansion NATO and the expansion European Union, 
that there are conditions. They ain't easy. It's not like, ``I 
want to join, and they'll be happy to have me.''
    And as long as part of that equation is, it's absolutely 
clear that there is a red line, in terms of the partitioning of 
Kosovo.
    But I--let me ask you to conclude, sir. I'm keeping you all 
too long. If you'd comment a little bit on what we've been 
talking about.
    Mr. Vejvoda. Thank you, Mr. Chairman. Well, I have several 
things to say. Of course, as I've said before, I disagree with 
the statement that Serbia somehow is turning toward Russia. 
This is a moment in history where simply Russia took a stand, 
and was aligned with the rejection of Serbia to lose its formal 
sovereignty over Kosovo.
    And I think one shouldn't underestimate the difficulty of 
the society and the stake in fronting the fact of formally 
losing, even though it practically lost sovereignty in 1999, 
and one doesn't need to recall the 1816 in the United States, 
and successions in other parts of the world.
    These are things that remain with the people, whether it's 
the Spanish Civil War or other things, and of course it will 
remain part of the emotions and the culture of a nation. It's a 
whole other thing how a state and a government deals 
practically with the decision that has happened.
    And we are in the first, as I said, 2 weeks, 3 weeks of 
this. And I think we should, as you said, give it time, and of 
course Serbia does not have time, and we--many of us who have 
fought against Milosevic even from the eighties--know how much 
time we have lost. It will be 20 years since the fall of the 
Berlin Wall next year.
    And simply, it gives me shudders to think that we're still 
not locked in fully as a candidate and negotiating on new 
membership. That will happen. I have talked to French 
officials. They are very keen to push very hard. That as soon 
as they take over the EU President on July 1 to start pushing 
this issue, to maybe get that candidacy for Serbia at the end 
of the year.
    Clearly, Serbia has to its homework. There's no free lunch 
out there. But I think we have gauge the tools and the 
bluntness of the tools as we try to reach our goal of locking 
in the whole of the region, and in particular Serbia, into the 
Euroatlantic fold.
    The Chairman. Well, gentlemen, you've given us a lot to 
think about. You're a very impressive panel. This is a work-in-
progress, to say the least. I must tell you, I've been amazed 
by how your expectations affect your view.
    But I've been mildly encouraged, mildly, that 2 weeks out, 
things are not worse than they are. And so, but with your 
permission I'd like to submit a couple more questions in 
writing to you. I'm not trying to make work for you; I know how 
busy you all are.
    And I also suggest that we're not--this is not the single 
hearing and we're having and we're walking away. We're going to 
come back to this issue, as well as explore other aspects of 
it. And we may ask you to come back. I hope you will.
    But again, thank you, for your time, your effort, and your 
input. It's been very valuable.
    Mr. Serwer. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We're adjourned.

    [Whereupon, at 11:56 a.m., the hearing was adjourned.]

                            A P P E N D I X

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              Additional Material Submitted for the Record

  Prepared Statement of Hon. John Barrasso, U.S. Senator From Wyoming

    Thank you, Mr. Chairman. The issue before us today is certainly 
complicated and one in which different ethnic communities and now 
States must compromise.
    The history of Kosovo in the 20th century is tragic. Ethnic 
tensions and the brutality of Slobodan Milosevic's regime caused 
immense suffering and death.
    Today, ethnic tensions continue to disrupt the lives of both ethnic 
Albanian and Serbian communities. As we all know, Kosovo declared its 
independence from Serbia on February 17, 2008, and the United States 
recognized Kosovo as an independent State.
    The outcome of Kosovo's declaration of independence is unclear. 
However, it has an important role in the future of the Balkans region. 
We must now carefully consider what United States obligations will 
entail for our future involvement and relationship with Kosovo.
    I appreciate the testimony we heard today from our distinguished 
guests.
                                 ______
                                 

Remarks of Vuk Jeremic, Minister of Foreign Affairs of the Republic of 
 Serbia, Before the Committee of the European Parliament, Strasbourg, 
                           February 20, 2008

    Dear Mr. Chairman, distinguished MEPs, Your Excellencies, ladies 
and gentlemen, I stand before you this afternoon as a proud European, 
and as an ashamed European.
    Proud because my heritage, my culture, my beliefs, and my history 
bind me to a constellation of nations that, at the onset of the 21st 
century, reconciled themselves, and created something so magnificent 
that one could say: ``there has truly never been anything else like it 
in the history of the world.''
    Winston Churchill equated the feeling I am trying to describe to 
you with a ``sense of enlarged patriotism.'' That was his vision of 
Europe, and Jean Monet's vision of Europe, and Konrad Adenauer's vision 
of Europe. It is a vision I proudly share. For the peoples of Europe, 
between whom rivers of blood have flowed without mercy, chose to end 
the feuds of a thousand years. And they sought to eliminate from their 
shores a zero-sum approach to the conduct of regional politics.
    How could I not be proud? How could I not, until just a few days 
ago, without the faintest shadow of a doubt, support the aspirations of 
my country to join the European Union, and therefore welcome the EU's 
commitment to the incorporation of Serbia and all the western Balkans 
within its welcoming boundaries?
    But I am also a deeply ashamed European. Tacitus wrote: Deserta 
faciunt et pacem appellant: ``They create a desolation and they call it 
peace.'' That is what some European Union countries have done to the 
Republic of Serbia, to a small, peace-loving, democratic country in 
Europe, a founding member of the United Nations, an original signatory 
to the Helsinki Final Act, and a pillar of stability in Southeast 
Europe.
    Creating desolation out of the promise of a European future. This 
is what the governments of some of your countries have done by 
recognizing the unilateral, illegal, and illegitimate declaration of 
independence of the Provisional Institutions of Self-Government of 
Serbia's southern province of Kosovo and Metohija.
    Ladies and gentlemen, I am ashamed not as a Serb--for in the 
negotiating process on the future status of our province of Kosovo, we 
did nothing but demonstrate good faith and understanding for the 
legitimate rights of the other side. In fact, since the democratic 
overthrow of the regime of Slobodan Milosevic in October 2000, we have 
done almost everything right. We have overcome almost every obstacle. 
We have fulfilled almost every condition. We have embraced almost every 
standard. And we have taken on every challenge to our future with an 
optimism that thinkers like Alexis de Tocqueville thought had departed 
the Old Continent long ago.
    I am ashamed as a European. As someone who knows in his heart that 
what has been done to Serbia is a fundamental violation of the very 
nature of not just the international system, but of the values that 
hold up the European construction.
    I am ashamed, because if recognizing this act of ethnically 
motivated secession from a democratic, European state is not wrong, 
then nothing is wrong.
    I am ashamed, because I see how the bedrock of values that make us 
who we are is being trampled underfoot. Because I see how my fellow 
Europeans are trying to construct the future on a foundation of sand 
and rubble.
    And I am ashamed, because for all the talk about reason and 
enlightenment, for all the pious declinations on the common good and 
solidarity, Europe is rapidly becoming just another place where might 
makes right.
    Some may say I have exaggerated. Well, let us turn to the matter at 
hand.
    The institution with primary responsibility to maintain 
international peace and security is, according to the United Nations 
Charter, the Security Council. And, in 1999, following the 78-day 
bombing of my country, it adopted a resolution--still operative today--
that conferred upon the U.N. the authority to administer Serbia's 
southern province of Kosovo, and explicitly and unambiguously 
reaffirmed the sovereignty and territorial integrity of my country. 
When Serbia was ruled by a tyrant, Kosovo was a confirmed part of 
Serbia.
    It said so in Security Council Resolution 1244. And it went further 
than that. It placed a Chapter VII obligation--a binding obligation--on 
all the Member States of the United Nations to respect the borders of 
my country.
    And now, when Serbia is a democracy, some European nations are 
prepared to recognize Kosovo as an independent state. They say, in 
effect, we did not punish the tyrant, but now we will punish a 
democracy--a European democracy--and we expect its citizens to take it.
    They say Kosovo can be independent, while saying that 1244 in its 
entirety still applies, including, presumably, that part that reaffirms 
Serbian sovereignty over Kosovo. And they send an EU-led mission to our 
province without the approval of the Security Council, even though 
paragraphs 5 and 19 of 1244 make it abundantly clear that only the 
Security Council can do that.
    And yesterday, at an emergency session of the Permanent Council, no 
European Ambassador could explain to anyone with any degree of reason 
why what is being done to Serbia is not a violation of the core 
principles of the Helsinki Final Act.
    They could not explain to me why what they are doing is not setting 
a dangerous, precedent that will create very troubling consequences to 
the stability of Europe and the whole world.
    Recognizing the unilateral declaration of Kosovo's independence 
from Serbia legitimizes the doctrine of imposing solutions to ethnic 
conflicts.
    It legitimizes the act of unilateral secession by a provincial or 
local entity.
    It transforms the right to self-determination into an avowed right 
to independence.
    It legitimizes the forced partition of internationally recognized, 
sovereign states.
    And it violates the commitment to the peaceful resolution of 
disputes in Europe.
    It even resurrects the discredited cold-war doctrine of limited 
sovereignty.
    By the actions of some European Union Member States, every would-be 
ethnic or religious separatist across Europe and around the world has 
been provided with a tool kit on how to achieve recognition. Does 
anyone in this room think that the Kosovo Albanians are the only group 
in the world with a grievance against their capital?
    Do any of you honestly think that just by saying that Kosovo is sui 
generis, you will make it so? That there will be no consequences to the 
stability and security of the international system, just because you 
say it won't?
    Is this the way proud Europeans behave? Is this the way European 
values are put into practice? Is this the way to treat friends?
    Ladies and gentlemen, notwithstanding everything I have witnessed 
and all that my country has gone through, I have not lost faith in 
Europe, even though I am ashamed by the actions of some within it.
    I have not lost faith in Europe because I still hold out a measure 
of hope that Europe will live up to its values; that Europe will pause 
for a moment and recall the principles that drive its own 
decisionmaking in Brussels and Strasbourg. I'm talking about 
compromise, concession, and consensus-building. That's how it works: By 
engaging in a process of deliberate, patient, and sustained, good-faith 
negotiations until a compromise is struck that all stakeholders can 
abide by.
    In the case of Kosovo's future status, only a solution that is 
acceptable to the sides can be viable, sustainable, and lasting.
    Only a negotiated solution can pave the way toward a common, 
European future.
    Only such a solution can consolidate the regional gains made, 
reinforce the geostrategic priorities achieved, and restore the drive 
for change in Southeast Europe.
    The imposition of a one-sided outcome--the recognition of an 
independent Kosovo--does the opposite. It sets back the achievements of 
European visionaries in our region; it uncouples the western Balkans 
from its future in Europe; and it fosters a view throughout the region 
that Europe is in the business of imposing outcomes.
    This is where we are. It's a shameful place to be. And it's not 
where we should be.
    Where we are is at the precipice, facing down into the shadows of 
uncertainty. Uncertainty over the future of the western Balkans. 
Uncertainty over democracy in Serbia. Uncertainty over the safety of 
the Kosovo Serbs. And uncertainty over the fate of our holy sites--the 
central element of our national identity.
    Yet we also face forward. We can see beyond the break, and beyond 
the discord. We can still see Europe for what it is, for what it can 
become, for what it can accomplish. But also for what it can harm: The 
dreams of a proud, democratic, European country that has surmounted 
more obstacles since October 2000 than most other nations have in a 
hundred years.
    Ladies and gentlemen, I assure you, with the fortitude of a unified 
nation, Serbia will not go quietly. We shall strive for what is just, 
for what we believe in, for our future, for what is rightfully ours.
    The Republic of Serbia shall not tolerate this illegal act of 
secession. Our Government and National Assembly have declared this 
action by the authorities in Pristina null and void. And we shall 
undertake all diplomatic and political measures designed to impede and 
reverse this direct and unprovoked attack on our sovereignty.
    As a responsible member of the international community committed to 
the peaceful and negotiated resolution of disputes, the Republic of 
Serbia will not resort to the use of force. For violence cannot bring a 
peaceful settlement to any crisis. Violence only destroys--lives, 
property, hope, ambitions. It destroys everything and creates 
desolation.

                                  
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