The impact of support to rule of law reforms in Western Balkans must be increased, say EU auditors

The impact of support to rule of law reforms in Western Balkans must be increased, say EU auditors
Credit: ECA

EU support has had little impact in advancing fundamental rule of law reforms in the candidate countries in the Western Balkans, according to a special audit report published by the European Court of Auditors (ECA) on Monday.

While technical and operational reforms have taken place in the region, the support has been largely insufficient to tackle persistent problems in areas such as the independence of the judiciary, the concentration of power, political interference, and corruption. According to the auditors, this is mainly due to insufficient political will and a lack of domestic ownership in the candidate countries.

Albania, North Macedonia, Montenegro and Serbia are candidate countries, and Bosnia-and-Herzegovina and Kosovo are potential candidate countries for EU membership. Turkey is also a candidate country but there the accession process has effectively been suspended and it was not included in the audit.

For more than two decades, the EU has been striving to help them in implementing their reform agenda but the attraction of joining the EU has not been enough to implement necessary reforms and meet membership conditions. During the years, EU has also reformed its own enlargement policy to increase the effectiveness and transformative power of its support.

New enlargement methodology

During 2014 – 2020, the total EU financial support under the Pre-Accession Instrument (IPA) for structural reforms in the area of the rule of amounted to €700 million. The sum represents about 16 % of all EU bilateral assistance to the Western Balkans countries.

Some years ago, the European Commission adopted a more rigorous approach to preparing the six Western Balkans countries for membership in the EU. The approach was based on a benchmarking mechanism for assessing all chapters of the acquis (EU law), in particular those on the rule of law and good governance.

But the benchmarks were not clear enough to reflect the country context and the gap between expectations and actual results remained. In 2020, the Commission therefore introduced a new methodology based on a mix of new elements.

European Commission’s assessment of rule of law components, source: ECA audit report

The most innovative element was making the accession process more dynamic by grouping the 33 negotiating chapters in six thematic clusters. The first cluster includes “fundamentals” such as the rule of law chapters, the functioning of democratic institutions and public administration reform as well as the economy of the candidate countries.

Negotiations on each cluster will be opened as a whole – after fulfilling the opening benchmarks – rather than on an individual chapter basis. Negotiations on the fundamentals will be opened first and closed last and the progress on these will determine the overall pace of negotiations.

ECA’s audit covers the period 2014 – 2020 so it is was too early to see any visible results of the new methodology. While ECA welcomes the methodology as a step in the right direction, it also cautions that it only applies to Montenegro and Serbia, the two countries that have started formal accession negotiations, and has yet to be put into practice.

Montenegro has been negotiating since 2012 and Serbia since 2014, having provisionally closed only three and two chapters respectively

Financial assistance and political dialogue

“EU support for the rule of law in Western Balkans has clearly not been successful in bringing about wholesale change”, summarized Juhan Parts, the ECA member responsible for the report, the conclusions at a press conference (10 January).

“The modest progress made over the last 20 years threatens the overall sustainability of the EU support provided under the accession process. Constant reforms lose credibility if they do not deliver tangible results.”

Juhan Parts is a former auditor general and was prime-minister of Estonia when the country joined the EU in 2004 together with other central-eastern European countries. He was clearly disappointed about the poor results in Western Balkans. “As the time and situation are different, I don’t think that it’s fair to compare the enlargement process then and now,” he told The Brussels Times.

Governance indicators have been stable or show a decline in the last years as the countries have taken an authoritarian turn. Freedom House in its annual report of the status of democracy, considers all six western Balkan countries transitional or hybrid regimes. Freedom of expression is the area that has progressed the least in all six countries.

EU’s support is built around two intertwining streams of action – financial support and political dialogue – and both elements were audited by ECA. The main audit questions were whether the EU support for the rule of law had been well designed and had delivered expected results.

The auditors examined 20 rule of law projects that mainly focused on the strengthening of judiciary capacity, the fight against corruption and organised crime. They also looked at freedom of expression and the role of civil society. The audit team was assisted by a panel of three external academics specialising in the rule of law in the Western Balkans.

On a positive note, ECA’s assessment of planning and implementation documents from the 2014- 2020 period did show an alignment with policy and objectives agreed in the political dialogue. In several cases, the rule of law sectors identified by both the Council and the Commission have fed into specific objectives in the various action programmes and projects.

If EU action seems to have contributed to reforms, it is because reports tend to focus on quantitative outputs, and not enough on what the reforms have actually achieved, according to ECA. The EU auditors confirmed the picture given by independent evaluators in 2019. Sustainability after the EU support ended has proved difficult to achieve.

Why is long-term impact missing?

The audit findings should not come as a surprise to the Commission.  Its own country reports that are part of the annual enlargement package are critical against the lack of progress or even backsliding in the reform process in the Western Balkans countries.

However, according to ECA, the reports do not contain a specific section for the assessment of reform ownership and political will. Nor do they systematically link progress or the lack of progress to specific EU actions or suggest how the EU could help to implement recommendations. The Commission counters that this is not the objective of the country reports and that projects are followed-up in separate reports.

Civil society organisations are receiving substantial EU funding (ca €250 million in the previous period) and could play an important role in promoting the reform process but EU support is still insufficient in meeting the needs of the sector and mostly based on short-term projects, according to the auditors. For some reason, the Commission has weakened its own monitoring of consultation with civil society in the reform processes.

According to the Commission, the EU is regularly stressing the need for inclusive and transparent consultations with civil society for rule of law reforms. It says that it is monitoring the contribution of civil society organisations to the rule of law through a dedicated Support for Improvement in Governance and Management (SIGMA) instrument, operated by OECD.

“We want civil society to play a bigger role and see how their ideas are taken into account by the authorities,” the audit team said. As far as is known to ECA, civil society organisations do not formally participate in the meetings between Commission officials and the authorities when they discuss policy issues and project implementation.

“I think the ECA report is a step ahead in the understanding of how rule of law works and that the formal and standardized approach of the EC has not managed to make a decisive difference,” commented Alina Mungiu-Pippidi, Professor of Democracy Studies at the Hertie School in Berlin and one of the three experts consulted by ECA in the audit.

“The Balkans have not progressed due to intense politicization of bureaucracy and the judiciary and the continuous decline of the media,” she explained.  “All West-European investors pulled out, leaving the local civil society and the media too weak to demand more objective and less client-based governance.”

ECA’s recommendation that the Commission support the strengthening of a free press and civil society could result in a more sustainable approach, as nothing is missing for the governments to progress except sufficient will, she concluded.

All recommendations accepted besides one

There seems to be no panacea solution to the situation. The findings and conclusions in the audit resulted in four straightforward recommendations that also have been proposed in the past. First, the Commission should strengthen the mechanism for promoting rule of law reforms in the enlargement process, in particular by establishing final impact indicators.

“The Commission should avoid micro-managing of projects and not do things on behalf of the countries concerned,” ECA member Juhan Parts explained. “Instead of telling the countries what to do, step by step, the Commission should describe the final situation, with the use of clear indicators, where the countries need to reach.”

Second, the Commission should intensify support for civil society engaged in rule of law reforms and media independence. Third, it should reinforce the use of conditionality in the pre-accession assistance for the new budget period (IPA III). And fourth, it should strengthen project reporting and monitoring.

In its reply to the audit, the Commission accepted fully all recommendations besides the third one on conditionality. While all of Western Balkan partners have made some progress in the area of the rule of law, with some partners demonstrating good and sustained progress, the Commission admitted that the impact of the EU support to rule of law has been varied.

“Achieving wholesale change in the rule of law area, is part of a long-term process, which the Commission will continue to support.”

A Commission spokesperson welcomed the audit report and pointed out that the report itself acknowledges that EU support has contributed to reforms that have led to some positive developments in the rule of law area, such as improving the efficiency of the judiciary and the development of relevant legislation. “The situation cannot be seen in black and white.”

“The rule of law remains the cornerstone of the accession process and will determine enlargement partners’ overall pace of progress on their path towards the EU. Important progress has been achieved over the past years, but it is clear that much more needs to be done. We’ll continue to engage with authorities and other relevant actors in the Western Balkans to take this work forward.”

As regards reinforcing the use of conditionality, the Commission expressed some reservations. It says that it applies conditionality on a case-by-case basis. “A generalised use of conditionality for all IPA III funding would not be appropriate in view of the proportionality of modulation foreseen in the IPA II regulation.”

According to the regulation, in case of significant regression or persistent lack of progress by a beneficiary country, assistance shall be ”modulated” and funds can be reduced and redirected. Where progress has resumed, the assistance shall also be modulated accordingly. Whether funding can be reduced in other areas than the rule of law is not clear.

The IPA III regulation was adopted in September 2021. Did the audit come too late to be taken into account by the EU?

“The fact that IPA III does not provide for pre-defined country envelopes allows the Commission to ‘modulate’ aid, ECA member Juhan Parts replied. “In other words, to adjust the aid depending on progress, project ownership and political commitment of the Western Balkans countries.“

“We advocate a stricter approach directly linking rule of law progress with funding in investment intensive areas. While the IPA III regulation was published in September last year, the Commission has not yet published the relevant implementing decisions on how to enforce conditionality and the IPA III national programs are not yet in place, so we don’t think that our report comes late.”

ECA underlined also the importance of Public Administration Reform (PAR). It is a cross cutting theme targeted under the ‘fundamental first’ approach.

“There is a specific strategy for each country managed by the ministries in charge of public administration and finance,” Juhan Parts told The Brussels Times. “A strong public administration is essential for the correct implementation of rule of law reforms in the chapters concerned.”

M. Apelblat
The Brussels Times

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