… fell to 116 dinars against the euro, forcing the the country’s central bank to intervene and spend €80 million of its reserves.

The domestic context in Serbia following a presidential election on 20 May has contributed to this steep decline in market confidence –

Investors moved en masse to offload the currency, [...] in the wake of the failure of the Tadic coalition government, which had come to embody the country’s aspiration to enter the European Union, and the surprise victory of right-wing leader Tomislav Nikolic, who is now experiencing difficulties in forming a government.

Belgrade is also largely dependent on “foreign banks based in EU countries, many of which are Greek and Italian.” This is one of the main reasons for concern over the prospect “of another credit squeeze in the region,” notes the French daily.

The French presidential election could result in a renegotiation of the budgetary pact, pledged by socialist candidate François Hollande, or a review of Schengen, demanded by outgoing President Nicolas Sarkozy, who has threatened to suspend the application of the agreement. The identity of the winner will also affect Franco-German relations, links between the European left and right, and the balance of power between small and large EU states.

In Serbia, President Boris Tadić is taking advantage of general elections to seek a renewed mandate that would give him a free hand to pursue pro-European policies. If he is re-elected with a majority in parliament, he will benefit from an unassailable position from which to lead his country in the footsteps of neighbouring Croatia towards an EU accession that will boost the stability of the Western Balkans. Thereafter his discreet policy of relinquishing Serbian claims on Kosovo, a condition imposed by Europe, could become irreversible, even though it may still be undermined by an upsurge in tensions in the former Yugoslav province.

As for the elections in Greece, they will represent an opportunity for the country’s population to express its view of the policies that have been implemented since the start of the crisis which has threatened to destroy the country. No doubt lenders and financial markets will be hoping for an outcome that favours the PASOK socialist party and/or the right-wing New Democracy. But the moment of truth may be fast approaching for both of these parties, which spent months locked in dispute before coming together to form a national unity government under Lucas Papademos. As it stands, both have been performing badly in the polls, with showings of less than 20%, and they will both have to contend with competition from dissident and extremist parties, opposed to austerity policies and the restoration of order in the country’s finances imposed by the EU and the IMF.

Opposition to mainstream politics, which will likely be a common feature of these three different elections in what is arguably a representative sample of European countries – one still a prosperous founder member of the EU, one peripheral EU state that is currently in crisis, and one country on the road to accession – should constitute an interesting barometer of the situation in the rest of Europe.

In France, the competition for third place behind Hollande and Sarkozy will be between the extreme right representative, Marine Le Pen, who wants out of the euro, and Jean-Luc Mélenchon, the leader of alliance of left- and far-left parties, who wants to “liberate” France from the Lisbon Treaty. In Greece, the anti-European protest vote will be disputed by the borderline neo-nazi Golden Dawn, and the right-wing populist LAOS party, which briefly participated in the Papademos government, as well as the hard left represented by the KKE communist party, the SYRIZA (radical left) and DIMAR (democratic left). At the same time, nationalists continue to exert a strong influence in Serbia, where their support remains an important factor in the success of the Serbian Progressive Party led by Tomislav Nikolić, which is currently topping the polls in the run-up to general elections.

Notwithstanding the important role that markets in Madrid, Milan and elsewhere will play in determining the fate of the common currency, the cross-section of electoral opinion offered by 6 May will enable us obtain a better understanding of what the future holds for European politics in the months to come.

“Most countries in central, eastern and south-eastern Europe have seen qualitative losses in their democracies, their market economies and their political management in recent years,” says the foundation, which is very close to business circles. It attributes the change to political polarisation and some leaders’ hunger for power. Among the European states highlighted are Hungary (top of the rankings), Slovakia, Albania, Kosovo, Macedonia and Montenegro, while Poland and, to a lesser extent, Serbia get better marks.

... the quality of Kosovo-Serbian relationships, even after a year of negotiations, has changed little. The two countries still do not recognise each other’s legitimacy, hence the need to continue the discussions to arrive at a stable relationship.

... For Pristina, the negotiations may eventually lead to its recognition by the five European countries that have not yet endorsed its independence (Cyprus, Spain, Romania, Slovakia and Greece) and the establishment of a new legal framework. The failure to define the legal status of Kosovo, however, requires a new resolution from the UN Security Council – with Serbia’s assent. The EU is still offering Kosovo the chance to join the EU and is promising it a feasibility study on its integration, though without actually opening up the Stabilisation and Association process. Serbia, however, was able to obtain EU candidate status, because it entered the negotiations with clear goals.

... Brussels entered the negotiations to unblock the status quo and do more to attract Serbia to the EU, thus demonstrating its own usefulness. Kosovo entered the negotiations without a clear definition of goals… Serbia, finally, has stayed focused on candidate status while continuing to challenge the independence, sovereignty and functionality of Kosovo – an objective it has clearly achieved. Kosovo, on the other hand, has lost its chance to normalise the situation. Each country will soon enter its election cycle – a phase of “normal” instability. Negotiations for Serbian membership in the EU will not commence unless the Serbian and Kosovar political situations are clarified and stable. And it is Brussels that will signal the time when they may sit once more around a table to unblock the status quo.

Another Serbian newspaper, Blic, emphasises that Belgrade had not expected such a tough line from the German Chancellor and asks whether the government or the international community has not deceived the Serbian people by telling them “that Kosovo and the EU were two separate issues – that is, EU membership has nothing to do with the loss of Kosovo.”

In Germany, the Frankfurter Rundschau reports that “when it comes to membership issues, the Balkans, if one is to believe the European Commission, are ‘on the right track’. Each step ahead is acclaimed with stiff solemnity.” But “those who lived under communism feel instinctively that it is not the formal announcements that count, but progress on the basic issues. No wonder there are anxious fears afoot in the Balkans: 'Do they really want us in? And what will it cost?”

For columnist Sabina Fati, "Dictators continue to exert an appeal even after their death. However, democratic governments avoid entering into a spiral of posthumous fascination.” She also points out that tourist initiatives that focus on dictatorships in other countries, like Germany and Serbia, tend to be "organised by the far left – the glorification of the Berlin Wall – or private entrepreneurs – Tito’s 'Blue Train'". However, "No government minister in Madrid would ever dream of creating a tourist trail that followed in the footsteps of Franco."

Though it may well be a coincidence, it is nonetheless interesting to note that the arrest took place in the same week when Croatia was informed that negotiations on its accession will not be concluded as previously scheduled before the end of June. As Novi List noted early this week: "The EU’s new enlargement is a strategic decision that has prompted another geopolitical tug-of-war between Western countries." The Croat daily goes on to point out: "Just as it was at the beginning of the 1990s, on one side we have a group of nations led by Germany and Austria along with the countries of the Visegrád group (Poland, Hungary, the Czech Republic and Slovakia) that are staunch supporters of the rapid accession of Croatia, which they believe has been the victim of prejudice for too long. On the other, we have Great Britain and its main continental allies – the Netherlands, Denmark, and the Scandinavian countries – who want negotiations to be concluded at the end of the year, at a time when Serbia can fulfill the conditions to apply for EU membership." And this scenario has now been made possible by the Mladić’s arrest. But Europe’s 27 member states will have to exercise careful judgment because the Balkan region remains a hotbed of potential crises.

In Belgrade, it is still too early to evaluate the political consequences of Mladić’s arrest, while in Zagreb, The Hague’s recent sentencing of General Gotovina has reinforced hostility to the EU. And in both countries, corruption and excessive nationalism still present a threat to a trouble free accession. In Bosnia-Herzegovina, the same Serbs who were led by Mladić are threatening to organise a referendum on their independence – a development that would put an end to the precarious peace that has reigned there since 1995. And in Kosovo, a state that is still not recognized by five members of the EU, where crime and corruption continue to thrive, the possibility of a separation between Serbian and Albanian territories remains a threat to regional equilibrium.

On the eve of Mladić’s arrest, the Commissioner for Enlargement and European Neighbourhood Policy, Stefan Fülle, presented the EU’s new strategy for the countries on its borders, which is mainly focused on Arab states, and to the detriment of countries like Belarus, Ukraine and Georgia, which until now  had been given priority treatment – highlighting what appears to be an inability on the part of the EU to apply a consistent policy for all of its neighbours. The Balkans are situated at a meeting point of the perspectives of enlargement and neighbourhood policy, with Croatia and now Serbia leading the way. But the effort that will be required to integrate both of these countries should not pave the way for a neglect of the rest of the region. Mladić’s arrest is just one chapter in a story that could have many different outcomes.

And things might well continue at the same pace. Following the summit of the "Big four" European powers set for 6 September – that the Belgian EU presidency threatens to boycott, fearing that its real purpose is to legitimise France's expulsions of the Roma  – there will be a meeting of foreign ministers, who are to discuss, among other topics, the issue of Kosovo (Berlin has suggested to Serbia that they would have an open door into the EU if they recognised Kosovo's autonomy). There is also the (less than inspiring) state of justice in Bulgaria and Romania, both trying to be a part of the Schengen zone. Next up are the referendum on the presidential election in Moldavia (a requisite condition for pursuing negotiations toward an eventual membership in the Schengen area), as well as one on Constitutional reforms in Turkey (ditto), not to mention the legislative elections in Sweden. Which leaves a lot on the plate of the Union's unusually quiet Belgian presidency, whose first hundred days will soon be coming to an end.

Iulia Badea Guéritée