[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





                      PROGRESS AND CHALLENGES IN 
                          THE WESTERN BALKANS

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

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON EUROPE, EURASIA, AND EMERGING THREATS

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 29, 2015

                               __________

                           Serial No. 114-30

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
TOM EMMER, Minnesota

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

         Subcommittee on Europe, Eurasia, and Emerging Threats

                 DANA ROHRABACHER, California, Chairman
TED POE, Texas                       GREGORY W. MEEKS, New York
TOM MARINO, Pennsylvania             ALBIO SIRES, New Jersey
MO BROOKS, Alabama                   THEODORE E. DEUTCH, Florida
PAUL COOK, California                WILLIAM KEATING, Massachusetts
RANDY K. WEBER SR., Texas            LOIS FRANKEL, Florida
REID J. RIBBLE, Wisconsin            TULSI GABBARD, Hawaii
DAVID A. TROTT, Michigan















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Hoyt Brian Yee, Deputy Assistant Secretary, Bureau of 
  European and Eurasian Affairs, U.S. Department of State........     3
Ms. Susan Fritz, Acting Assistant Administrator, Europe and 
  Eurasia Bureau, U.S. Agency for International Development......    14
Mr. Ivan Vejvoda, senior vice president, Programs, German 
  Marshall Fund of the United States.............................    36
The Honorable Joseph J. DioGuardi, president, Albanian American 
  Civic League (former Member of Congress).......................    47

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Hoyt Brian Yee: Prepared statement...........................     6
Ms. Susan Fritz: Prepared statement..............................    16
Mr. Ivan Vejvoda: Prepared statement.............................    39
The Honorable Joseph J. DioGuardi: Prepared statement............    50

                                APPENDIX

Hearing notice...................................................    64
Hearing minutes..................................................    65
The Honorable Joseph J. DioGuardi:
  Article by Ms. Shirley Cloyes DioGuardi entitled ``Confronting 
    the Roots of Kosovo's Downward Spiral''......................    66
  Article by Erwan Fouere entitled ``Gruevski Must Resign and 
    Make Way For Transition Process''............................    69

 
             PROGRESS AND CHALLENGES IN THE WESTERN BALKANS

                              ----------                              


                       WEDNESDAY, APRIL 29, 2015

                       House of Representatives,

         Subcommittee on Europe, Eurasia, and Emerging Threats,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2 o'clock 
p.m., in room 2200 Rayburn House Office Building, Hon. Dana 
Rohrabacher (chairman of the subcommittee) presiding.
    Mr. Rohrabacher. I call to order this hearing of the 
Subcommittee on Europe, Eurasia, and Emerging Threats. Today's 
topic is progress and challenges in the Western Balkans.
    After the ranking member and I each take 5 minutes to make 
opening remarks, each other member, if they so choose, will 
have the opportunity for making an opening statement as well. 
We will then proceed with our first panel of witnesses and 
without objection, all members will have 5 days to submit their 
statements or questions or extraneous material for the record. 
Hearing no objection, so ordered.
    It has been almost exactly 2 years since the last time the 
subcommittee held a hearing on this region. I am pleased to 
again be returning to this important topic and to be able to 
hear from such informed witnesses. We all know the tragic 
history of the breakup of Yugoslavia during the 1990s. Yet, it 
is remarkable that today, every country in the region, 
including Serbia, is in some way seeking greater integration 
with European institutions. I congratulate Croatia, for 
example, which is perhaps the foremost example of this on their 
successful accession into the European Union in 2013. And while 
the region has witnessed some major steps forward over the last 
two decades including the independence of Kosovo, the pace of 
progress appears to have slowed and perhaps even regressed in 
certain cases.
    Later this year, we will celebrate the 20-year anniversary 
of the Dayton Peace Accords which ended the Bosnian War. 
Reaching that agreement was an admirable diplomatic 
accomplishment. Yet, the political framework that ended the 
fighting has proven structurally unable to build a state which 
governs effectively or meets the expectations of its people.
    I noted that over the weekend, the leader of the Republic 
of Srpska called for a referendum to determine if the Serb 
enclave in Bosnia should break away unless it is granted 
further autonomy. Clearly, the current arrangement in Bosnia is 
not working. In Macedonia, the exposure of a massive internal 
surveillance scheme has rocked that small nation, highlighting 
the immense challenges of building a state which respects the 
rule of law and the rule of law both inside the government and 
the rule of law outside the government.
    Next door, EU brokered peace talks between Serbia and 
Kosovo just a few years ago, resulting in an agreement entitled 
``Principles of Governing the Normalization of Relations.'' 
While we are all happy that a solution was reached between 
these two sides, there remains ample reason for concern. I 
remain doubtful about the prospect of integrating Serbs, for 
example, who live in the northern part of Kosovo and I am 
somewhat doubtful about them integrating into the rest of the 
country. If the Serb community in the northern part of Kosovo 
which is to be governed by Belgrade, we should acknowledge 
their right to determine for themselves what country they will 
live in and make their own self-determination. This is the same 
principle, I might add, that led us to support the Albanian 
Kosovars in their desire for self-determination two decades 
ago.
    In closing, the Western Balkans collectively have been 
aided by deployment of at least three separate NATO missions 
which included a significant contingent of U.S. military 
personnel who I visited over the years. Billions of dollars 
have been spent by the European Union and our own Government to 
support economic development, reduce ethnic tensions, and build 
modern states. Between 1990 and 2012, USAID spent over $1.7 
billion aid dollars to help the Western Balkans. And what has 
that huge sum of money accomplished over the years? What about 
the diplomatic accomplishments, what have they achieved or what 
are their efforts anyway? And has outside engagement reached an 
effective limit there in that part of the world? And to get 
answers for some of those questions and others, we will hear 
from our witnesses today.
    Panel 1, first of all--Mr. Sires, would you like to have an 
opening statement? And then I will introduce the witnesses.
    Mr. Sires. Thank you, Mr. Chairman, for holding this 
hearing today to evaluate the state of the affairs in the 
Balkans. Since the mid-1990s, the region has undergone a great 
transformation as the wars have ended and political and 
economic reforms have set in. The region also progressed toward 
greater integration with European and transatlantic 
institutions. While great improvements have been made in the 
Balkans, various challenges still remain including dealing with 
the impact of Kosovo's independence and the on-going fight 
against organized crime and corruption in the region.
    As we have witnessed over the past year, Russia continues 
to get influence outside of the borders, forcing the 
surrounding regions, including the Balkans to be on high alert. 
More than ever, it is imperative that we continue to be engaged 
in the Balkans to ensure democracy, security, and prosperity in 
the region. And I look forward to hearing from the esteemed 
panels that we have today. Thank you.
    Mr. Rohrabacher. All right, we will proceed. And when 
Congressman Meeks arrives, he will be free to have his opening 
statement as well.
    Our witnesses for Panel 1 are Deputy Assistant Secretary 
Hoyt Yee who is appointed to his current position in the Bureau 
of European and Eurasian Affairs in September 2013. He is a 
career foreign service officer and previously stationed in 
Montenegro, in Greece, and most recently, as the DCM in 
Croatia. So he obviously knows the region.
    Susan Fritz is the Acting Assistant Administrator for USAID 
in Europe and Eurasia Bureau. She is a 25-year veteran of USAID 
and has significant experience in the region as well. She 
served as the Mission Director in Serbia and the Deputy Mission 
Director for Kosovo. So with that said, I will introduce the 
second panel when you are done. If you could proceed with 5 
minute opening statements. The rest of your statement will be 
made part of the record and then we will proceed.
    Mr. Yee.

 STATEMENT OF MR. HOYT BRIAN YEE, DEPUTY ASSISTANT SECRETARY, 
  BUREAU OF EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Mr. Yee. Thank you very much, Mr. Chairman. Chairman 
Rohrabacher, Representative Sires, members of the subcommittee, 
I want to thank you for inviting me and my colleague, Susan 
Fritz, to appear before you today to discuss the Western 
Balkans 20 years since the Dayton Accords were signed. We are 
deeply grateful to the Congress and this subcommittee, in 
particular, for your interest in the Western Balkans which are 
an integral part of our vision of a Europe, whole, free, and at 
peace. Your engagement with senior Balkan officials, both here 
and in the region has sent a powerful signal that the United 
States remains committed to the region's future.
    Today that vision is more under threat than any time since 
the end of the Cold War. Russia's aggression in Ukraine and 
ISIL's reign of terror in Syria and Iraq have underlined the 
geostrategic importance of a strong, stable Europe including in 
the Western Balkans. In this new context, our work with Balkan 
partners to create a space for free markets and free peoples is 
more important than ever.
    EU and NATO membership, aided by U.S. engagement and 
assistance remains the transformative political and economic 
force for the Western Balkans. Progress is happening. Albania 
and Croatia joined NATO in 2009. Croatia became the 28th EU 
member in 2013. Montenegro is making steady progress on EU 
accession negotiations and is intent on qualifying for NATO 
membership. Albania's recent elections were the best democratic 
transition in that country's history. Serbia and Kosovo are 
making landmark progress toward normalization. And lastly, 
Bosnia and Herzegovina has negotiated its EU Stabilization and 
Association Agreement. I would like to give just a quick update 
on the region's seven countries.
    Bosnia and Herzegovina. Bosnia and Herzegovina remains one 
of the poorest countries in Europe and lags far behind the rest 
of the region in reforms needed for membership in the European 
Union and NATO. To catch up, Bosnia and Herzegovina will need 
to accelerate reforms. We and our European partners have urged 
Bosnia and Herzegovina to begin with socio-economic reforms 
that can make a tangible impact in the lives of Bosnia and 
Herzegovina citizens. These initial reforms must lead to 
institutional and political reforms that Bosnia and Herzegovina 
needs to become a stable, functional state, fully integrated 
with the rest of Europe. We believe that the future of Bosnia 
and Herzegovina lies in the EU and NATO, and like all other 
candidates Bosnia and Herzegovina will have to undertake 
substantial reform.
    With the recent establishment of new state and entity-level 
governments that have reaffirmed their commitment to reform, we 
are hopeful the countries' leaders can deliver results.
    Serbia. Serbia continues to improve relations with its 
neighbors and to build a stronger partnership with the European 
Union and the United states.
    In January, Serbia assumed the chairmanship of the 
Organization for Security and Cooperation in Europe, the OSCE, 
and Serbia's leadership thus far has shown a strong commitment 
to supporting the organization's founding principles. We 
continue to support Serbia's aspirations to join the European 
Union and to commend Serbia's progress toward this goal.
    Serbia has also recently taken steps to maintain 
constructive relations with neighbors, including Belgrade's 
hosting of Albanian Prime Minister Rama in November 2014, the 
first visit at that level between the two countries in 68 
years. Most encouraging, Serbia's commitment to the EU-led 
Brussels dialogue with Kosovo has resulted in more normalized 
relationships, increased regional security, and mutual 
understanding.
    Kosovo. Seven years after its declaration of independence, 
Kosovo has taken great strides to develop as a full sovereign, 
independent state. We continue to support Kosovo in its efforts 
to build a modern, multiethnic state with inclusive, democratic 
institutions. With the strong support of EU High Representative 
Mogherini, considerable progress on the Kosovo-Serbia dialogue 
has been made since both sides reconvened in February 2015, 
including with agreements to unify Kosovo's judicial system and 
to integrate the Kosovo-Serb Civilian Protection Corps into 
Kosovo institutions.
    We also support the establishment of a Special Court to 
deal with the allegations contained in the 2011 Council of 
Europe report and urge Kosovo's leaders to take steps to 
approve the necessary legal framework.
    Albania. Albania has seen significant democratic progress 
since the ending of oppressive communist rule 20 years ago. 
Last June, the European Council granted Albania EU country 
candidate status. In granting the status, the Council 
highlighted Albania's efforts at countering corruption and 
organized crime, and implementing judicial reform.
    With over 1 year in office, the new government continues to 
hold Albania's strong partnership with the United States as a 
key strategic priority. We recently signed a U.S.-Albania 
strategic partnership, outlining key areas of cooperation, 
including security, rule of law, economic development and 
energy security. Nevertheless, much work lies ahead.
    Despite receiving EU candidate status, Albania will face 
significant challenges implementing the reforms necessary for 
beginning EU accession talks.
    Montenegro. Montenegro which began EU accession talks in 
June 2013 has come a long way. However, the European Union 
noted in October, a lack of credible investigations, 
prosecutions, and final convictions in corruption cases and 
serious concerns regarding freedom of expression and the media.
    NATO has also urged Montenegro to strengthen the rule of 
law to improve its case for receiving an invitation to join 
NATO by the end of 2015. We agree with our NATO allies that no 
one outside the 28 member states, including Russia can 
interfere with or veto NATO's decisions on membership. We are 
also concerned about the relatively low level of Montenegrin 
public support for NATO membership, currently about 38 percent. 
Our hope is that Montenegro will accelerate the pace of its 
efforts and put its best case forward this year.
    Macedonia. We support Macedonia's aspirations to join NATO 
and the European Union. Recently, however, we and our European 
partners have been following with concern the domestic 
political crisis in Macedonia related to the release of wiretap 
information by the head of the main opposition party. We are 
urging the government to address the leaked information in a 
way that demonstrates its commitment to Euro-Atlantic 
principles. We are encouraging the opposition which is 
currently boycotting Parliament to return to that body and help 
resolve the crisis. We are also concerned about a growing 
divide between the ethic-Macedonian majority and ethnic-
Albanian minority communities.
    Macedonia's integration into the EU and NATO remains 
important for achieving lasting peace and stability in the 
region. With a new government in Athens, we continue to urge 
both sides to arrive at a mutually acceptable solution to the 
so-called name issue which has blocked the country's Euro-
Atlantic prospects.
    Croatia. In July 2013, Croatia became the newest EU member 
and is now sharing lessons it learned with its neighbors who 
aspire to join the EU and NATO. Yet, challenges still lie 
ahead. The economy has contracted for the last 6 years, causing 
high unemployment and deterring further foreign investment. We 
encourage Croatia to take steps to improve the business 
climate, attract more investment and foster private sector led 
growth. Although much more work needs to be done, we welcome 
the recent tender for a business plan to develop the liquid 
natural gas, or LNG, terminal on Krk Island. The realization of 
this terminal will not only help Croatia reduce dependency on 
Russia or any other single source of gas, but also provide 
energy diversification for other central European countries who 
are much more dependent on Russian energy supplies.
    Thank you, Mr. Chairman, Ranking Member Meeks, members of 
the subcommittee. I look forward to your questions.
    [The prepared statement of Mr. Yee follows:]
    
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                              ----------                              

    Mr. Rohrabacher. Thank you very much. We have been joined 
by Mr. Meeks and with your permission, Mr. Meeks, I will have 
Ms. Fritz' testimony and then you will be able to give your 
opening statement, etcetera.

 STATEMENT OF MS. SUSAN FRITZ, ACTING ASSISTANT ADMINISTRATOR, 
   EUROPE AND EURASIA BUREAU, U.S. AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Ms. Fritz. Thank you, Mr. Chairman, Chairman Rohrabacher, 
Ranking Member Meeks, and Congressman Sires. I want to thank 
you for the opportunity to appear before you today, along with 
my colleague, Hoyt Yee, to discuss USAID's assistance and 
priorities in the Balkans
    The mission of the U.S. Agency for International 
Development is to partner to end extreme poverty and promote 
resilient, democratic societies while advancing our security 
and prosperity. In the Balkans, USAID has played a key role 
since the breakup of Yugoslavia, helping raise standards of 
living and assisting countries on their path toward Euro-
Atlantic integration and to becoming more tolerant, stable, and 
democratic societies. USAID is committed and focused on how we 
build on this momentum to address the serious remaining 
challenges as part of a coordinated U.S. Government strategy. 
Corruption, democratic drift, fragile economies, and uncertain 
domestic political climates all threaten the gains made since 
the Dayton Accords were signed 20 years ago.
    Today, I would like to build on Deputy Assistant Secretary 
Hoyt Yee's updates on the five individual countries where USAID 
continues to work with a particular focus on how our programs 
have impacted some of the foreign policy priorities DAS Yee 
mentioned, such as preventing violent extremism, supporting 
governments and societies in becoming more stable and resilient 
to potentially detrimental external influences, and 
strengthening the region's economic health.
    USAID's longstanding role in the Balkans and across Europe 
and Eurasia is to work with host countries, civil society, 
private sector and international partners to build the 
institutions of government, the economic systems, and the free 
civil societies that lead to democracy and prosperity. Our job 
is to help build the foundations of ``a Europe Whole, Free, and 
at Peace.''
    Let me highlight a few examples of our democracy and 
governance activities in the region. In Bosnia and Herzegovina, 
USAID's assistance to Parliament staff and members has helped 
them to complete their legally mandated budget process which 
includes public debates on priorities and impact analyses, 
leading to more functional and accountable institutions across 
the entire government that better meet the needs of the 
citizens.
    In Serbia and Kosovo, our activities have strengthened rule 
of law by improving the independence, transparency, efficiency 
and professionalism of the judiciary. Our anti-corruption 
assistance in Serbia has been pivotal to increasing the 
transparency and overall capacity of key independent agencies 
to execute their mandates.
    In Macedonia, USAID's media program has increased the 
legitimacy of independent media and strengthened freedom of 
expression by promoting investigative journalism and 
establishing a media fact-checking service which has published 
online more than a thousand peer reviews of media articles.
    In Albania, USAID is providing assistance to strengthen 
local government accountability, financing and services 
including the crafting of a fiscal decentralization framework 
and a critical law for the structuring of local government. In 
the economic sphere, USAID programs in the Balkans are 
bolstering entrepreneurs as well, as the laws and policies have 
let them thrive in stable financial systems.
    We help governments to establish energy policies, to 
diversify supplies, and connect to European markets, increasing 
safe, clean power for industry and citizens.
    Let me highlight a few examples of our economic growth 
efforts. In Bosnia, USAID's assistance and loan guarantees, 
particularly to small agribusinesses is helping to increase 
sales and exports. Our Farmer Project, for example, reported 
increased sales for companies assisted by USAID of 54 percent 
over 4 years. USAID helped the Albanian Government to achieve 
critical reports in the energy market, resulting in the 
electricity company saving $75 million last year through 
implementation of practical loss reduction techniques that were 
provided by our advisors.
    USAID's critical support to Kosovo's Government to unbundle 
electricity distribution and supply enabled it to privatize the 
Kosovo Energy Corporation resulting in improved infrastructure 
investment, billing and collections, reducing technical and 
commercial losses.
    In Macedonia, we are helping streamline laws and 
regulations for clean, renewable energy to promote more 
investment in the sector. We have also expanded access to 
finance for small and medium businesses.
    In Serbia, USAID assistance was instrumental in reforming 
Serbia's labor law, reducing the burdens of its inspection 
system and is modernizing its outdated construction permitting 
system.
    USAID is working to improve the competitiveness of the 
private sector, especially economically disadvantaged regions 
populated by ethnic minorities.
    Mr. Chairman, since Dayton, the Balkan countries have made 
remarkable progress in the reforms needed to further integrate 
into Euro-Atlantic institutions and to build resilient 
democracies. With that said, we know that our work in this 
region is far from done. We recognize, as you have pointed out, 
that there has been political and economic stagnation in the 
region. The Balkan countries where USAID works, Albania, 
Macedonia, Kosovo, Serbia, and Bosnia and Herzegovina need 
continued U.S. engagement and attention.
    We look forward to working with you and your colleagues in 
Congress to strengthen U.S. engagement and more specifically, 
USAID's activities in the Balkans to build on the progress that 
has been made to achieve our goal of a Europe, free, whole and 
at peace.
    Thank you again and I look forward to your questions.
    [The prepared statement of Ms. Fritz follows:]
    
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    Mr. Rohrabacher. We have had two very optimistic pieces of 
testimony here.
    Mr. Meeks, would you like to have an opening statement? And 
then you may also proceed with any questions that you have for 
the witnesses.
    Mr. Meeks. Thank you, Mr. Chairman, and I want to thank you 
for holding this hearing to provide us with the status update 
on the Western Balkans region and I look forward to working 
with you in this 114th Congress on this region and as we have 
been talking about look forward to visiting this region soon so 
that we can go and see for ourselves what is going on on the 
ground.
    With the West's attention justifiably being attracted to 
the Ukraine and related issues, we must not forget the 
importance and the delicate state of progress in the Western 
Balkans and I am encouraged by this hearing on the region to 
reaffirm our stance support for its peaceful and prosperous 
future.
    Today's hearing is for me an opportunity to examine the 
tough issues and potential for advancements for a region that 
has a lot of promise. The quagmire of the Balkan Wars of the 
1990s gives us a reference point for today's hearing. As the 
region spiraled into chaos, the United States and NATO led an 
international effort to put an end to the killing. The war set 
the region back in its move toward democracy and free-market 
capitalization and continued to haunt its citizens and policy 
makers. Western thinkers tend to present the Western Balkans' 
history and current events through two different lenses in my 
opinion, one that reckons that outside involvement played the 
leading role in getting us to the wars and consequently the 
current situation, while the other claims that the fate of 
Yugoslavia was doomed regardless of what outsiders did.
    In today's hearing, I would like to argue the role of the 
Balkan people themselves who are often dismissed in these 
discussions. As much as recently written histories and 
international bodies affect the current situations here, it is 
the decisions of local politicians, businesses, and citizens 
that will definitely decide where this region will go. It is up 
to us and Congress to support healthy democratic, economic, and 
peaceful progress on the ground. We, the United States, have 
invested billions of dollars and many lives in order to ensure 
peace and prosperity in the region. The people there who have 
sacrificed more deserved it. In fact, there are signs of 
promise across the region. The regions are over a decade 
without armed conflict. Croatia, a reliable NATO partner, 
joined the EU in July 2013. And Serbia is technically on track 
to follow suit later this decade.
    Freedom House named Kosovo, an electoral democracy for the 
first in their 2015 report. Montenegro recently passed 
substantial reforms to the rule of law and the defense and 
intelligent sectors, taking it closer to NATO membership. These 
are all encouraging steps in the right direction that should be 
recognized and supported.
    Nevertheless, change is rarely linear and we will examine 
the breaks that impede progress as they apply to specific 
states. Sluggish economic growth, continuing problems in the 
fight against corruption, and serious questions with regard to 
the rule of law beset the region with an undertow pulling 
against the progress that had been made.
    How can Congress support regional actors in combating these 
forces? And what about the EU? How much progress can be made 
without a bold accession strategy from the regional power, the 
EU. Ensuring the success of the region's development and 
encouraging democratic progress is of strategic importance to 
the United States and our interest are critically linked.
    So I hope, as I have heard some of the testimony already, 
the opinions on this fascinating region, the leaders of the 
governments there should know that we are concerned with the 
state of affairs and after this hearing we look forward to 
following up on what is discussed. The fragile piece of the 
region is one that we, together with our EU partners must work 
hard at and encouraging.
    I look forward to a fruitful discussion and questions that 
we can explore what Congress can offer and do to help to ensure 
economic growth, equality and peace for all in the region.
    Thank you for giving me that opportunity, Mr. Chairman.
    Mr. Rohrabacher. If you would like to go straight to 
questions, we will let you go first.
    Mr. Meeks. Let me first deal first with whole piece on EU 
accession. And some said, the European Union has lost its magic 
in the sense, but not its importance in the region. And they 
fault EU expansion fatigue or the lack of progress on the part 
of the countries applying to join, but the EU integration 
process has definitely slowed.
    One could question the specific state of accession in each 
Western Balkan country, but how do you assess the progress as a 
whole and the trends associated with it?
    Mr. Yee?
    Mr. Yee. Thank you, Representative Meeks, for that question 
and for your comments. I believe the European Union remains 
committed to enlarging the Union and to fulfill its commitment 
to the Western Balkans to continue to integrate all the 
countries of the Western Balkans as part of the European 
project.
    I would agree with you, Representative Meeks, that the 
process has slowed. I think this is clearly a dynamic process 
in which on both sides there are requirements. On the European 
Union side the Union, the members of the Union want to be sure 
that by adding new members they will be, in fact, strengthening 
the Union, not weakening it, and that the members, the 
countries which are aspiring to membership are truly ready to 
meet all of the obligations including economic, as well as 
political to join before, in fact, they are taken into the 
Union.
    On the candidate side, the aspiring country side, I think 
there is also the need to know that by joining the Union, they 
will be, in fact, helping their people, their citizens. They 
will not be joining an economic union in which they cannot 
compete, in which they cannot afford to contribute. So I think 
on both sides, there are reasons for the decision to be taken 
extremely seriously. We, the United States, support very 
strongly the continued integration of the Western Balkans into 
the European Union and into NATO for that matter.
    Obviously, it is up to the European Union to decide the 
pace and the process and the rules for how it is going to take 
place. What we can do in order to assist the process and to the 
extent possible to facilitate it is to help the candidate 
countries meet the standards necessary in order to qualify for 
EU membership. There is a long list of reforms that each 
country needs to make, both economic, social, and political 
that in each of the cases of the aspiring countries we are 
doing our best from our Embassies, from our capitals, to help 
the country meet the reform requirement.
    In many cases, it is an issue of rule of law. The European 
Union understandably wants to ensure that corruption and 
organized crime which is, of course, a factor in all of the 
countries of Europe is something that the new members, the 
aspiring members are going to be able to effectively address so 
they don't bring additional problems into the Union when they 
join.
    Mr. Meeks. Let me ask this question and then I will yield 
and come back. One of the biggest issues that I think and that 
is of concern is how the aligning of energy in the region is 
dealt with and the climate policies with the principles of the 
EU. And I understand that this is one of the most demanding 
chapters that the EU and the EU accession, both in cost and 
legislation that you were talking about needed to be passed. 
Coal no longer can play such a role in these countries' energy 
future.
    Furthermore, when we see things like Greece is entertaining 
Russia's plans to solve some of its energy questions, what 
messages, if any, have we been sending from the U.S. on this 
front and how can we be sure to kind of integrate the Balkan 
countries in a new energy system? And how can we reverse this 
trend and aid the countries in their energy plans so this is 
lined up so that we can make sure we are working collectively 
together in that regard?
    Mr. Yee. Thank you for that question. I think the European 
Union, along with the United States and the members, the 
countries that are aspiring to EU membership, are all very much 
focused on the need to align energy strategies, national 
strategies in a way that makes each country as diversified as 
possible, as energy independent as possible and as efficient as 
possible in its use of available energy sources.
    One of our big emphases now is to help countries in the 
Western Balkans which are dependent on natural gas from a 
single source, in this case Russia, also Central Europe the 
same case, to be less dependent and to diversify the supplies 
and routes of gas to their countries. This is a particular 
emphasis now because in recent years, in 2009 and 2006 there 
have been cases in which natural gas has been cut off in the 
winter and countries have realized the need to diversify. So 
this has been identified as a priority by the European Union.
    We are working very closely with our European Union 
partners and the aspiring countries to try to develop pipeline 
systems that will ensure there is a flow of gas to the 
countries that are reliant on gas imports, so they are not 
reliant on one source. They can have more than one pipeline 
supply.
    Also, we are encouraging diversification of energy types, 
so it is not only gas. It is renewables. It is also domestic, 
indigenous exploration and exploitation of energy sources. So 
it is not entirely just one country or one source.
    We are also supporting the European Union's efforts to 
develop a common energy market in which the countries cooperate 
in how they align their energy strategies so that it is more 
efficient and they are able to deal with energy exporters, such 
as Russia, in a way that they are not divided or worked one off 
the other in a way that is not advantageous to the aspiring 
countries.
    Mr. Meeks. Ms. Fritz, is there anything you want to add to 
that?
    Ms. Fritz. Yes, I would like to add the problems of energy 
supply and energy issues in the region are pretty broad. They 
include short fall for a generation. They also include aging 
infrastructure. As DAS Yee mentioned, they rely on Russia for 
gas supply. They also have low tariffs and high subsidized 
energy prices, or I am sorry, highly subsidized energy prices 
and that also continues to hinder capital investment in the 
sector as well as promote inefficiencies.
    USAID is supporting these countries on diversifying their 
energy supply by supporting infrastructure investments. We, 
over the last 10 years, have worked with transmission operators 
within the countries to highlight and outline and identify the 
most at-risk infrastructure and to bring World Bank and local 
resources to the tune of $1 billion. So we have improved the 
connectivity between the countries so that when you have an 
excess producer like Bosnia or Albania, that they can share, 
they can trade their energy resources with countries that don't 
have enough.
    We also work heavily in improving energy efficiency. We do 
that because these systems are highly inefficient. If we can 
save the amount of energy that they are using, then that not 
only is it environmentally better, but financially it helps 
them as well. The example I used in my testimony was an example 
of Albania where we provided $300,000 worth of technical 
assistance and advice to help them to reduce losses in their 
system. They basically reaped $75 million worth of rewards from 
that effort.
    In addition, the World Bank is putting up a loan of $150 
million to Albania for energy and USAID has been asked by the 
Albanian Government to help them to manage those resources in 
the best way possible. So our assistance is helping to 
facilitate trade in the region, improve energy efficiency and 
also to address some of the infrastructure issues in the 
region.
    Mr. Meeks. Thank you.
    Mr. Rohrabacher. Thank you, Mr. Meeks. So you just 
mentioned energy efficiency. Is the level of energy production 
increased in these last 20 years in that region?
    Ms. Fritz. I will have to get back to you on actual 
figures. I do not know.
    Mr. Rohrabacher. You know about efficiency, but you don't 
know if there is more energy available for the region?
    Ms. Fritz. I do know that the needs will grow as the 
economies do grow in the region and I can get back to you on 
that.
    Mr. Rohrabacher. The economies are growing in the region?
    Ms. Fritz. Yes, they are.
    Mr. Rohrabacher. What is the growth rate for these 
countries?
    Ms. Fritz. They have slowed. After 2008, the economy slowed 
and in some cases reversed.
    Mr. Rohrabacher. No, but I mean do you have a growth rate 
like they have grown at an average of 2 percent a year, 3 
percent a year or something like that?
    Mr. Yee. Overall, in the Balkans, the growth rate has been 
about 10 percent since 1990.
    Mr. Rohrabacher. 10 percent since 1990, so that is \1/2\ 
percent per year, is that what you are talking about?
    Mr. Yee. It has been very slow.
    Mr. Rohrabacher. So that is not really good growth at all, 
is it? That, in fact, would be considered pretty much 
stagnation, wouldn't it?
    Ms. Fritz. Well, for countries coming out of war, I think 
it is understandable.
    Mr. Rohrabacher. In fact, it is just the opposite, is it 
not, when someone is coming out of a conflict that is when they 
have the highest rate of growth as compared to later on once 
their economy has been solidified? I think your calculus is 
wrong there.
    Let me ask you this about--so it doesn't appear that there 
has been much economic progress because everybody seems to be 
looking about being in the EU and that is going to be the big 
solution and we know Croatia has at least become part of the 
EU.
    What is it that they have to do? What are some of the 
requirements for all these other countries that the EU is 
making demands that they do this, this, and this? Could you 
give me three of the demands that are being made of these 
struggling countries?
    Mr. Yee. Well, thank you for the question, Mr. Chairman. 
The answer is that for each of the countries it is slightly a 
different case on what they need to do. One of the main things 
that each country needs to be able to do is to make the economy 
competitive with other members of the European Union. So it is 
spending levels with respect to GDP. It is ability to meet 
expenses, state expenses, maintain a budget in other words. It 
is ability to collect taxes, pay pensions, basic things that 
any economy in the world would need to do, it needs to be done 
in a certain level.
    Mr. Rohrabacher. So before they can become part of the EU, 
demands that are being made are that they have to set up a 
system that is approved by the EU in terms of their tax 
collection would you say?
    Mr. Yee. It has to meet the EU standards, Mr. Chairman. So 
across the board in economic criteria of what is needed in 
order to have a healthy economy within the European Union, the 
EU has certain standards.
    Mr. Rohrabacher. So it has been 20 years and you are just 
talking about structural changes that what you are suggesting 
now are sort of what could be made by democratic government. 
They could say we are going to collect our taxes in a different 
way, etcetera. So what is the hold up?
    Mr. Yee. Well, the economy, of course, Mr. Chairman, is one 
big factor. There is also the judiciary. There is the public 
administration. There is the rule of law overall that needs to 
be met, the ability to fight corruption and organized crime, 
the ability of a government to meet its defense and security 
needs, basically to fit in with the rest of the other 28 
members. And as we have seen in the case with Croatia, it was 
able to meet the standards with difficulty, of course, with 
numerous reforms, changes including to its constitution. 
Croatia was able to meet those demands.
    Montenegro is also making progress. They have opened, I 
believe, about 18 negotiating chapters with the European Union, 
so they are moving ahead. It is a slow and difficult process, 
but countries have shown that with the right political will, 
with the right economic conditions, discipline, they are able 
to make progress on that track.
    Mr. Rohrabacher. Making progress means nothing then unless 
they are part of the EU. I mean I hear this making progress, I 
mean I managed to get up and get out of bed today. It seems to 
me what we have is a total stagnation for 20 years in the 
largest part of what was a conflict situation.
    And Ms. Fritz, I am sorry, that after wars is when 
economies grow at their fastest rate actually. And it is when 
you are rebuilding your economy that you have growth. That is 
by definition, but we haven't had that growth. And it seems to 
me what we are doing today is we are not celebrating the Dayton 
Accords. We are marking the fact that they happened 20 years 
ago.
    And it didn't sound like, to me, that you were telling me 
that we are actually making progress toward taking care of 
parts into the corruption issue. So the corruption issue is one 
of the issues keeping these countries out of the EU. Is that 
correct?
    Mr. Yee. That is correct, Mr. Chairman. The ability to 
fight corruption, organized crime, other serious criminal 
issues is an important factor being weighed by the European 
Union as it considers members.
    Could I also add, Mr. Chairman, that I would agree with you 
completely that the progress in Western Balkans has not been as 
fast and as far as we would like and I think the countries of 
the region themselves would agree that the European Union would 
agree. However, as you mentioned yourself, Mr. Chairman, in 
your opening remarks, there has been progress. Croatia has 
joined the European Union and the NATO alliance.
    Mr. Rohrabacher. We can keep talking about Croatia, but let 
us talk about, for example, Serbia. Would you say that they 
continue to have high level corruption problems in Serbia?
    Mr. Yee. Serbia, Mr. Chairman, is actually, I think, a 
bright spot on the Western Balkan map. In terms of its 
accession to the European Union, they have reached an agreement 
brokered by the European Union with Kosovo on normalization of 
relations. This has allowed them to become a candidate--to open 
accession negotiations with the European Union, so they are 
moving ahead.
    Mr. Rohrabacher. I think the question was about corruption.
    Mr. Yee. Fighting corruption is one of the challenges that 
they as well as the other Western Balkans countries face. It 
certainly is an issue of concern. It is one of the areas in 
which----
    Mr. Rohrabacher. So give me a reading there for Serbia, the 
Serbian Government in terms of their effort to eliminate 
corruption. Sounds like you are giving them an A, but when I am 
listening, I am trying to figure out if that is an A or----
    Mr. Yee. Mr. Chairman, I wouldn't want to assign a rating, 
but there are international organizations, Transparency 
International, World Economic Reform.
    Mr. Rohrabacher. Is there any indication that there are 
politically-motivated persecutions going on and prosecutions 
going on in Serbia today?
    Mr. Yee. Politically-motivated prosecutions?
    Mr. Rohrabacher. Prosecutions, yes.
    Mr. Yee. None come to mind, Mr. Chairman.
    Mr. Rohrabacher. You are not aware of any politically-
motivated prosecutions, all right.
    Let me just, well, we will go through a second round, but 
Mr. Sires, you may proceed.
    Mr. Sires. Thank you, Mr. Chairman. Can you tell me what 
the level of influence, Russia's influence is in the Western 
Balkans today, the Russian influence?
    Mr. Yee. Thank you for that question, Mr. Sires. Russia, 
like many other countries in Europe, is interested in 
increasing its influence and its business interests in the 
Western Balkans. We have seen an increase in Russian interest 
in the Western Balkans through finance, banking, through 
energy, where it has been present for some time. I think I want 
to start by saying that Russia has played a positive role in 
the Western Balkans in such instances, in such countries as 
Bosnia and Herzegovina, where Russia is a member of the Peace 
Implementation Council for Bosnia and Herzegovina. We have 
worked successfully with Russia at advancing shared interests 
in the Balkans which are including stability and security of 
the region.
    We, of course, are watchful of what Russia is up to the 
Balkans, particularly in light of what has happened Ukraine. We 
listen very carefully, follow very closely what Russian 
diplomats are saying. We noticed of late in last September, 
last fall, Mr. Lavrov made a statement saying that Russia 
considers NATO enlargement or NATO accession of Western Balkans 
to be a provocative act. We, of course, disagree with that. We 
don't believe NATO is directed at any country. It is a 
defensive alliance. It is a positive factor of stability in the 
Western Balkans. So I point that out as an area which we 
disagree, but we are still able to work with Russia. I think it 
is important that we remain vigilant as to what they are 
actually doing, both in terms of their business and their 
political actions in the Western Balkans.
    Mr. Sires. Are they nervous at all on what has happened 
with the Ukraine? Are the Balkans nervous at all after seeing 
what happened in Crimea and Ukraine?
    Mr. Yee. I think, Mr. Representative, it is fair to say 
that many countries in Europe, including the Western Balkans, 
have watched what Russia has done in Ukraine with great 
consternation and concern about, first of all, the stability, 
security of Europe, the strength and integrity of the European 
order of principles on which----
    Mr. Sires. But, you know, it struck me that you said the 
Russians have been helping these countries, and you have been 
working with the Russians, so which is it? I mean----
    Mr. Yee. Mr. Representative, it is both. Russia in some 
occasions, in some instances is a partner with which we work 
not only in the Western Balkans. As you know, Mr. 
Representative, we work with Russia in fighting, countering 
violent extremism, counterterrorism, on the Iran nuclear 
negotiations.
    In Ukraine, we clearly have a different position. We have 
been urging our European partners and working with our 
Europeans to insist that Russia abide by its agreements that it 
signed.
    Mr. Sires. Ms. Fritz, do you have anything to add to this? 
Can you add something to this?
    Ms. Fritz. USAID is not engaged on countering Russian 
pressure or aggression in any way. We are a development agency, 
so no, sir.
    Mr. Sires. You don't want to say anything. Can you tell me 
what progress has been made since Serbia and Kosovo signed the 
agreement of principles governing the normalization of 
relations in 2013?
    Mr. Yee. On what basis?
    Mr. Sires. Any progress that they have made. I mean, 
obviously----
    Mr. Yee. Yes, Representative Sires, thanks very much. That 
is actually another area where we feel there has been some 
progress made in the Western Balkans. That is the agreement 
between Kosovo and Serbia to normalize the relations in 
accordance with an agreement brokered by the European Union in 
April 2013.
    The progress in implementing that agreement has been slow, 
but it has been steady. We have seen even in February where the 
two sides, both countries met to work out an agreement on the 
integration of the judicial system throughout Kosovo for all 
Kosovo citizens, there are now agreements being worked out on 
other basic issues affecting citizens lives, telecoms, energy. 
Eventually, there will be----
    Mr. Sires. Do you feel that in 2015, they remain fully 
committed to this?
    Mr. Yee. Yes, absolutely, Mr. Sires. Both sides have been 
negotiating in good faith. Both sides see their futures linked 
to this process of normalization in order to gain what they 
both want which is to be integrated with the European Union.
    Mr. Sires. Thank you very much, Mr. Chairman.
    Mr. Rohrabacher. We will have a short second round. Mr. 
Meeks, go right ahead.
    Mr. Meeks. Let me ask Ms. Fritz. How has the USAID programs 
in the Western Balkans helped to build tolerance between 
communities? And how much work remains to be done to heal some 
of the scars of the 1990s? Because to me, we want to make sure 
that we don't ever go back there and the question of the 
different ethnic groups. And what I hope our work is is to help 
build that kind of tolerance so that we can have a more 
prosperous future.
    Ms. Fritz. Thank you for that question, Mr. Meeks. We have 
continuing programs on ethnic reconciliation in all four of the 
former Yugoslav republics in which we are working. So, for 
example, in Bosnia, we have a variety of activities. We work in 
the schools to promote ethnic tolerance. We are working with 15 
pairs of communities that were divided during the war to 
promote ethnic reconciliation between those communities. We 
worked with youth on building ethnic tolerance through sports.
    In Kosovo, our effort has been a little bit different. We 
have focused on helping to establish the ethnically Serb 
majority municipalities that came out of the Ahtisaari Plan and 
helping Kosovo Albanians and Kosovo Serbs to work together in 
building those institutions.
    In Macedonia, our focus has been totally related to the 
schools. Schools in Macedonia are mostly mono-ethnic, meaning 
that ethnic Macedonian children are in one school, ethnic 
Albanian kids are in another. So our efforts have been 
connecting over 260 mono-ethnic schools with one another so 
that kids have a chance to know kids from other ethnicities. We 
partnered with the Department of Defense on that project where 
we have renovated over 40 schools and have worked also with the 
Macedonian Government which has put up almost $800,000 to also 
renovate the schools. And local communities, local 
municipalities have also put up on average 30 percent toward 
the cost of those projects. This effort has impacted more than 
20,000 kids in Macedonia.
    And then in Serbia, our efforts have been a little bit 
different. We focus on economic development in the southern 
part of Serbia, so in south Serbia where ethnic Albanians live, 
and in Sanjak where ethnic Bosniaks live, to build economic 
development and build ties between the central government and 
these disadvantaged regions. So we have different approaches in 
each country. It remains front and center of our concerns and 
our programming because of the scars from the war.
    Mr. Rohrabacher. There has been a vote called, and so I 
will have a couple of minutes for my second round of questions 
and then we will be in recess until the end of the next vote 
that we have or whatever that vote is.
    Let me ask, I guess we are opposing, Mr. Yee, the Serbian 
request for a referendum that they might become, leave their 
part of the government with Bosnia, is that right? And we are 
opposing that?
    Mr. Yee. Mr. Chairman, thank you for the question. I 
believe you are referring to the Republic of Srpska's 
announcement or one party within the Republic of Srpska 
announced over the weekend in its party congress that if its 
goals for a greater autonomy were not met by, I believe, 2018, 
it would want to move toward independence.
    Mr. Rohrabacher. Right.
    Mr. Yee. So I think as a general principle, Mr. Chairman, 
our view is that we need, the United States, needs to continue 
to support wholeheartedly the sovereignty and territorial 
integrity of Bosnia and Herzegovina, that there is, in fact, a 
reform process underway that is led by the European Union and 
the United States, that is designed to address the desire of 
the people, not only the Republic of Srpska, but of the 
federation of the whole country in getting adequate----
    Mr. Rohrabacher. Got it. Well, let me note that it doesn't 
seem to me we backed the Kosovars right, so determination. And 
the Serbs certainly didn't like that. And now when you have 
some Serbs who don't want to--who want their right of self-
determination, we just seem to have a double standard. And I 
think that double standard is quite demonstrable over these 
last 20 years.
    Now what we have is then from what I am getting, I keep 
hearing the word progress, but it seems to me that what we have 
got is stagnation and when you have 1\1/2\ or just \1/2\ 
percentage economic growth a year over a 20-year period what 
you have are people living in desperation because that growth 
generally would not impact on some of the people who are 
struggling there to earn a living and live decent lives. But 
instead, quite often that type of growth pattern services an 
elite and or is syphoned off into the government in some way.
    So I am from the--I know we can use the word progress over 
and over again. I don't get that from your testimony. I will 
just have to say that right off the bat and I think if things 
are not acceptable, if the status quo is not acceptable, it is 
only giving us this very low growth rate. And I might add 
people who are on hold to get into the EU for all of these 
years, it seems that some decisions need to be made to change 
the situation, not simply to stay on hold until accession into 
the EU will solve all of these problems.
    This hearing is now in recess and the next panel will come 
up as soon as we get back with this vote. Thank you.
    [Recess.]
    Mr. Rohrabacher. This hearing will come to order. I wonder 
if someone could close that door.
    Mr. DioGuardi. The reason why they opened it was it got so 
warm, but now that a lot of people have left, maybe it is 
better. Just close one side. All right, close them both. The 
State Department has left, so it is nice and cool now.
    Mr. Rohrabacher. All right. For our next panel we have Ivan 
Vejvoda, senior vice president of programs, German Marshall 
Fund here in Washington, DC, from 2010 to 2013, he was the 
executive director of the Balkan Trust for Democracy Program. 
And before that, he was the advisor to the Serbian Government 
and a long-time advocate for democracy in the region.
    Next we have Joseph DioGuardi.
    Mr. DioGuardi. ``DioGuardi,'' in Italian, means God 
protects.
    Mr. Rohrabacher. A former Member of Congress, and a 
prominent Albanian-American leader. He worked to focus the 
attention of the American Government on the Balkans. He is 
responsible for helping to bring about the first congressional 
hearing on Kosovo that we ever had. That goes all the way back 
to 1987 and today he is president of the Albanian American 
Civic League and is very active in the region. So we are very 
pleased to have both of you with us today. I would ask you to 
take 5 minutes and then we will go into questions from there. 
First, Mr. Vejvoda.

STATEMENT OF MR. IVAN VEJVODA, SENIOR VICE PRESIDENT, PROGRAMS, 
           GERMAN MARSHALL FUND OF THE UNITED STATES

    Mr. Vejvoda. Mr. Chairman, thank you very much for your 
kind introduction and thank you again for organizing this 
hearing. As you said, there hasn't been one in 2 years and I 
would submit to you that that is already a sign of progress. 
That means that there hasn't been anything radical in the 
region that would provoke a hearing. And I would like to try 
and say why I believe there has been progress over all these 
years and it is an honor to be testifying with the Honorable 
DioGuardi. Thank you so much.
    This is about the integration post Second World War Europe, 
a part of Europe that was left behind the Iron Curtain. Of 
course, the former Yugoslavia was not. It was in between NATO 
and the Warsaw Pact, a relatively independent country in terms 
of its foreign policy. And it slumbered into complete 
destruction when everybody thought there would never be war in 
Europe at the end of the 20th century. My country disappeared 
in front of me and is today seven countries.
    Why has there been progress? Well, very simply because 
there has been serious reconciliation. We haven't talked at all 
about regional cooperation which is very intense. Just to give 
you two examples, the military intelligences of all the 
countries regularly meet twice a year to exchange experiences, 
youth meets, cultural festivals. There has been a 
reconstitution of the cultural and societal space after a 
conflict rather rapidly. We like to say in the region, I am 
from Belgrade myself, that wars are quick to happen, but they 
also subside very quickly and people get back to their 
business.
    In spite of all the difficulties that remain, I need not 
remind you and this country that the scars of the Civil War 
remain after a long time, after that conflict as we celebrate 
150 years of the end of the War. I think here we have moved 
very rapidly. And the fact that we have a European Union that 
is, in essence, a peace project after World War II and having 
to impede war is the main reason why these countries want to 
join, because they were not democratic. They were not 
encompassed by this peace project and the fact that the 
European Union has been so long as peace is one of the key 
reasons why they want to join. Nobody in the region is 
oblivious to the fact that Europe has problems, that the Euro 
zone is in crisis, that growth rates are slow.
    And let me just give you one financial statistic. Greece, 
at the height of the crisis in 2010, had a GDP of $300 billion. 
If you put all the GDPs of all the former six Yugoslav 
republics, it barely reached $200 billion. What I am saying is 
these are small countries. They are weak economies. They had 
growth rates up until Lehman Brothers disappeared off the 
streets of New York of 7 to 8 percent. And thus, we suffered 
with the rest of the world back to low growth rates of 1 to 2 
percent, minus 1 percent. And I would say there is nothing 
unusual in the Balkans about that because that is what happened 
to the rest of the world.
    These countries are highly dependent on foreign direct 
investments. If you look at the trade patterns, we are fully 
trading with the European Union and the United States. We have 
many companies from the U.S. in the region. And in fact, they 
were calling from the Senate, Chris Murphy visited the region 
recently and was able to see for himself.
    In comparison, Russia is very low on all of those charts in 
terms of aid and public forums and we can get back to that if 
you wish.
    So what I am saying is that the European Union has put in a 
lot of money. USAID has been a key actor as has been the U.S. 
Government. Only yesterday, the German Foreign Minister 
Steinmeier visited Belgrade to see how things were progressing. 
He gave high marks for the reforms in Serbia and of course, 
complimented both Kosovo and Serbia on the advance they were 
making. These are historical, difficult challenges. And the 
fact that the leaders of both Kosovo and Serbia have found it 
in themselves to make this historical compromise and to move 
forward with all the difficulties, I would submit to you that 
it is great progress.
    Of course, the fact that the growth rates are low that we 
have very high youth unemployment. In Bosnia, youth 
unemployment is above 60 percent. And the fact that we have a 
brain drain again is not unusual. Look at Spain. Look at Italy. 
Look at Portugal. Lots of young professionals, IT, are moving 
north into Scandinavia and into Germany. Again, I want to 
relativize the fact that we have problems because those of us 
around us have problems.
    But I would like to underscore that it is about politics 
and geopolitics here. This region is what I call the inner 
courtyard of Europe. We are surrounded in the Western Balkans 
by full EU, full NATO member states. And all of the governments 
for the past 15 years, I take the fall of Milosevic as kind of 
the last hurdle, as the region moves forward, have determined 
to both join the EU and to join NATO except Serbia that still 
seeks a situation of neutrality. And the fact that there is 
this determination in spite of all is very important. And thus, 
I think, an invitation coming to Montenegro to join NATO, of 
course, if the marks are high in the boxes that it has to tick 
off, is most welcome because it demonstrates that the open-door 
policy of NATO is the reality. After 2009, so it is 6 years 
since the last enlargement round of NATO, and taking in 
Montenegro which would make the full northern coast of the 
Mediterranean, that is the only little part that remains not 
part of NATO would be symbolically and geopolitically very 
important.
    And so the EU is working very hard and I would like to 
underscore the role of Germany. Along with other EU member 
states, it has taken a lead role. Chancellor Merkel has 
convened something called the Berlin Process. All the prime 
ministers of the region were convened to Berlin. They will meet 
again in Vienna in August and they were in Brussels just 10 
days ago with the High Representative Mogherini to look at 
concrete infrastructure projects. Serbia and Kosovo are 
negotiating a highway that they will build together. A railroad 
is being built, a high-speed one between Belgrade and Budapest. 
So in spite of these difficulties and no one wants to 
underestimate them or neglect them, that is what life is about, 
to confront the challenges. I would say that there is 
leadership.
    And I would also like to underscore the importance of civil 
society and the strength that it has and it requires full 
support from donors like USA, from the Balkan Trust that is 
still active. And thus this combination of leadership with 
support from the United States and the European Union, I think, 
will help us achieve that Europe whole, free, and at peace that 
is, I think, a common goal to all of us.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Vejvoda follows:]
    
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    Mr. Rohrabacher. Thank you. Joe, you are on.

  STATEMENT OF THE HONORABLE JOSEPH J. DIOGUARDI, PRESIDENT, 
   ALBANIAN AMERICAN CIVIC LEAGUE (FORMER MEMBER OF CONGRESS)

    Mr. DioGuardi. Mr. Chairman, thank you so much for this 
hearing. I know we have many problems to deal with, the United 
States of America, around the world. Your questions to the 
State Department were excellent. As an American, I am 
embarrassed with the lack of clarity and the lack of substance 
on the answers you got from the State Department and the USAID.
    Now you know me as an advocate for human rights, but you 
may have forgotten that I am the first certified public 
accountant ever elected to the U.S. Congress. So let me talk 
about the numbers, because the numbers you heard don't add up.
    When you discover that the State Department thinks that our 
growth rate is less than 10 percent over a long period and as 
you rightly pointed out that is \1/2\ percent growth annually. 
Think about now the Albanian people in Kosovo and Macedonia. 
They have the highest birthrate in Europe today. Now think 
about the fact that there is no visa liberalization, so there 
is no way for the youngest population in Europe to go West. 
They are forced to go to Turkey. But not where there is some 
real growth like in Germany. That has to be resolved, number 
one.
    And think about the fact that you have this continuing 
adversarial relationship between the Serbs and the Albanians, 
at least at the government level. You heard from the State 
Department that they see hope and integration and 
normalization. How can there be normalization when every 
opportunity Serbia gets it says they will never recognize the 
independence of Kosovo. How can you have European integration 
when 5 countries today out of the 28 are not recognizing the 
independence of Kosovo? I don't think they know who the 
Albanian people are. They are the most pro-American, most pro-
democracy, and the most tolerant people in terms of inter-
religious tolerance in perhaps, the world today. They share 
four religions. There are even synagogues. A recent one was 
built in Albania. So you have Orthodox Christians, Roman 
Catholics, Muslims, and Jews. They intermarry. This is not a 
reality for the rest of Europe. This is what we should be 
supporting. These are the people that on 9/11, from Kosovo and 
Macedonia, were crying, walking with candles in the street, 
while the Serbs, the Greeks, Montenegrins, and Macedonians, 
ethic Slavic Macedonians that is, were dancing for joy in the 
streets. I just want to remind you, Mr. Chairman, who our 
friends are in the Balkans.
    You are continuing in the path of great chairmen. We 
started the first hearing with Congressman Dante Fascell, a 
Democrat. Then Congressman Gilman. Then Congressmen Hyde and 
Lantos, and now you. And thank God we have this progression, 
and that America understands that their best friends in the 
Balkans are the Albanian people.
    Now why is this hearing so important? We want to see 
Southeast Europe integrated into Europe. But the answers you 
heard--and your questions were excellent but got very few 
answers--tell us that unless the United States remains not only 
present, but active in Southeast Europe, there will be no 
European integration. There will be something that will happen 
before that that could create violence again. And I hope not. 
Nobody wants to see that. The problem is that the Albanian 
people can only take so much. So let us focus on Kosovo and 
then a few comments on Macedonia.
    We had a Pristina-Belgrade agreement 2 years ago heralded 
by Catherine Ashton. It is now been almost 2 years. Very little 
of the 15-point agreement has been implemented. And yet, you 
heard the State Department say that it is mostly done. It is 
not. In fact, Serbia has yet to dismantle the parallel 
structures in the north. Now I understand your philosophy and I 
love it, about ``self-determination.'' But there is a big 
difference in the self-determination that the Kosovars wanted 
and the Serbs want. Kosovars were under a genocidal maniac, 
Slobodan Milosevic. And a lot of that is continuing today. 
There is racism by the Slavic Macedonians and Slavic Serbs. 
There is actual racism against the Albanian people today. As 
you know, they are not Slavs. They should have never been put 
in a state called Yugoslavia. That was the biggest mistake that 
was made after World War I.
    So where are we going with this at this point? If the State 
Department thinks that things are in regular order, when Serbia 
is refusing to recognize Kosovo, refusing to take away the 
parallel structures and what not. The other problem the State 
Department has is that it has been much too involved in 
decisions that have been made within Kosovo. For instance, 
there was an election. There was an impasse. People did not 
want a return of the regime of Hashim Thaci. Many people feel 
he is corrupt and we can say the same thing about some 
politicians in Macedonia. But what happened was that our State 
Department--well, I hope not, but it is probable. But the 
problem is that we have a State Department now that forced the 
issue. There was a coalition, an opposition that was trying to 
regularize things in Kosovo and now we have a return of the 
political elite just switching chairs. Now Mr. Thaci is the 
deputy to Isa Mustafa who was rated yesterday with the 
population of Kosovo at 24 percent popularity, but our State 
Department engineered that back.
    Another thing----
    Mr. Rohrabacher. You have 60 seconds. We are way over 
already.
    Mr. DioGuardi. Let us look at Mr. Dell. He forces the 
creation of a road that is supposed to cost $1 billion to 
connect Albania and Kosovo. It goes to $2 billion. We need jobs 
in Kosovo, not a road. That road could have been built by local 
contractors for half price. And where does he end up? In a 
senior position in Bechtel, the company he aided to get the 
job. I would say, Mr. Chairman, that we need the U.S. Inspector 
General for the State Department to look at that.
    Let me just conclude with Macedonia. And by the way, I want 
to be sure that all my written comments are on the record. And 
in the case of Kosovo, there is an article that was written by 
our Balkan affairs advisor, Shirley Cloyes DioGuardi, 
``Confronting the Roots of Kosovo's Downward Spiral.'' And I 
would like to make sure that this article is put on the record.
    Mr. Rohrabacher. It will be submitted and put into the 
record without objection.
    Mr. DioGuardi. And on Macedonia, we have another article by 
Irwin Fouere and he was someone who was the former EU Special 
Representative in Macedonia from 2005 to 2011. I think he knows 
what he is talking about. And that article is entitled, 
``Gruevski Must Resign and Make Way for a Transition Process in 
Macedonia.'' That article was dated March 23, 2015, so that it 
is recent, as is the alleged corruption he talks about in that 
article----
    Mr. Rohrabacher. The article will be put into the record at 
this point without objection.
    Mr. DioGuardi. And let me conclude just on the two points, 
Kosovo and Macedonia. It is in my written comments here, but I 
would like to make just one concluding comment here on both.
    Regarding Kosovo, if the EU is serious about integration, 
there must be a much more aggressive approach taken for the 
recognition of Kosovo by all EU countries including Serbia.
    Regarding Macedonia, Albanians need to be treated as an 
equal partner in a state that does not have an ethnic majority, 
no majority. You have Bulgarians. You have Slavs. And you have 
the Albanians. But in that state, when it was formed, the 
constitution in 1992 was formed as a Macedonian state and that 
still rankles the Albanians today because they are not treated 
as equal and that is a big problem. The only other option, Mr. 
Chairman, is federalization. It was talked about back in the 
early '90s, but that is what Albanians would need if they 
didn't get a constitution that treated them as an equal state-
forming group. They want federalization that will allow them 
administrative, social, and financial control over their own 
destiny as part of a Macedonian federation of ethnic Albanians 
and Slav Macedonians.
    The problem we have got in Macedonia is so simple, it is 
black and white. Macedonia is an apartheid state in the middle 
of Europe. The Albanians do not live with the Slavs. They live 
separately, but unequally, and this is the problem today. And 
now you have Mr. Gruevski being exposed by his own opposition 
Slavic leader as one of the most corrupt leaders in Europe and 
the poor Albanian people are sitting there trying to figure out 
where we fit in all of this.
    Mr. Rohrabacher. Joe, thank you for your time.
    Mr. DioGuardi. Thank you so much for this opportunity.
    [The prepared statement of Mr. DioGuardi follows:]
    
    
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    Mr. Rohrabacher. I will proceed with some questions and 
then Mr. Meeks will follow and the second swing, we will do 
that as well.
    Let me ask our friend from the German Marshal Fund, has the 
debt like for these Balkan countries in the last--we have 20 
years. Okay, we have got 20 years since the Dayton Accords. We 
know that they are--and I know you believe that this is just a 
global trend in terms of an economy that was not producing a 
great deal of growth. We noticed that there was a World Bank 
loan of $150 million. How much debt are these countries in now? 
And what does that mean in terms of their economic viability 
and in terms of being able to function while paying the 
interest on the debt?
    Mr. Vejvoda. Well, again, nothing special about the 
Balkans. Like most of the countries in the world, they have a 
varying level of debt. In Serbia, I know it is 75 percent of 
GDP to the debt which is around $25 billion, I think. Other 
countries also, Croatia, Slovenia, I mean EU member states 
also, not only Bosnia and Macedonia, Kosovo, Albania, and 
Montenegro.
    The IMF has just concluded an agreement with Serbia just I 
think a month ago to the level of $3 billion to support the 
reform process and also the structural reforms that are 
required. Basically, in the case of Serbia----
    Mr. Rohrabacher. So we are asking for structural reform 
while burdening them with $2 billion of debt?
    Mr. Vejvoda. The structural reforms cannot happen without 
that support because structural reforms mean that you have to 
close down companies, so-called public enterprises that are 
working at a loss in Serbia. When you put them all together, 
there are roughly 300 companies or more that make a loss of $1 
billion a year. So what the IMF and the World Bank are saying, 
you need to close this down, but of course, there are human 
stories behind that because that means laying off thousands of 
people who, in an economy without growth, you know, the state 
will have that burden to carry it and thus the support from the 
outside----
    Mr. Rohrabacher. Are we bailing out owners of these 
companies?
    Mr. Vejvoda. No. These are all state-owned companies.
    Mr. Rohrabacher. I know. So it is just a state-owned 
company and there is no business class of people who are 
receiving the loan?
    Mr. Vejvoda. No. These are loans that--of course, there is 
the privatization in place, not dissimilar to what is being 
asked of Greece or Ukraine at this moment. Of course, Greece 
should have done this a long time ago. It has been a member 
state of the EU for more than 40 years and a member of NATO for 
more than 60 years. So I think again, in comparison, things are 
moving. Yes, at a slow pace. And as a citizen of that region, I 
am also frustrated by it, but as an analyst, as a political 
scientist in my previous life, I think it is moving.
    Mr. Rohrabacher. We have Greece as a next door neighbor, as 
an example, and they are a member of EU and NATO. And then we 
have all of these other Balkan countries who have been waiting 
20 years thinking that NATO and EU would be their economic, 
give them economic deliverance. By the way, when you say this 
$2 billion loan, who is that repaid to? Who actually gets the 
money at the end?
    Mr. Vejvoda. It has to be, just as Greece is repaying it to 
the IMF and the World Bank, Serbia will repay this IMF loan of 
$3 billion to the IMF.
    Mr. Rohrabacher. Is there actually any private banks that 
end up being paid for by this? Or is this all a government?
    Mr. Vejvoda. This is all in IMF loans. These are not 
private banks.
    Mr. Rohrabacher. This debt isn't, we are not putting these 
people in debt to some big German bank some place?
    Mr. Vejvoda. No, this is not like the case of Greece.
    Mr. Rohrabacher. You know, I am not sure that people can 
borrow their way into prosperity. And I know that we are saying 
that getting these loans are predicated on the reforms 
necessary for closing up unprofitable operations, that it would 
be better to having the money spent on things that actually are 
self-sustaining. I understand that is a good point. But it does 
seem that all the time when people are talking about all the 
progress that has been made, all we hear about is Croatia and 
for the rest of these countries, we are talking about fairly 
large unemployment. Certainly, of course, right next door we 
have Greece that is a member of the EU and is a member of NATO 
and they seem to be having big problems as well.
    Are you--let me just get this, are you optimistic that 
these things are going to be overcome? We have had 20 years now 
and I am sorry, I don't buy our own Government's analysis of 
this is a progress line. I know that you wanted to suggest that 
you thought there was progress as well.
    Mr. Vejvoda. There is.
    Mr. Rohrabacher. Outside of Croatia, is this figure correct 
that 60 percent of youth, young people, are unemployed?
    Mr. Vejvoda. In Bosnia.
    Mr. Rohrabacher. In Bosnia. Sixty percent? Do you think 
that might lead to perhaps when we have ethnic differences and 
especially when you have people, for example, is there any 
evidence, for example, that you have that perhaps some of the 
unemployed youth of this region who are Muslims might be 
engaged in being recruited to participate in radical Islamic 
terrorism?
    Mr. Vejvoda. There are, but in comparison to countries like 
France or Belgium or Sweden, we have very low numbers in the 
region throughout. Maybe from each country, 20, 30 people have 
gone, Bosnia, Serbia, Kosovo, a little more, Macedonia. There 
are now statistics. In fact, just yesterday, the European Union 
has decided to give $10 million euros to the region for greater 
interoperability between the civilian intelligence services so 
that they can do their job better, but I think they are doing 
very well.
    Let me just add, and this is something that we didn't 
mention, there has been very intense cooperation between the 
United States, DEA, and our domestic civilian services on 
countering serious organized crime, especially cocaine 
trafficking from Latin America. A lot of these people are in 
jail and being tried. So I would like to underscore the 
interdependency, whether it is of the region with Europe or in 
this case of the United States with the region. There are FBI 
offices, I think, in all of these countries and there is very 
intense work together. So we are not an island separated from 
the rest of the world. So we share both the travails and the 
problems.
    And I would like simply to make a distinction, Mr. 
Chairman, if you will allow, between political progress and 
economic troubles that the rest of the world is seeing. I would 
say that there has been huge political progress. We were 
communist countries. There was no freedom of speech, no freedom 
of association, no human rights. We have made huge strides. You 
heard from Deputy Assistant Secretary Hoyt Yee that Albania was 
now given a clean bill of justice on their last elections. It 
was the last country that didn't have elections that were 
considered free and fair. The rest of us in the region have 
that. We go home at 10 in the evening and we know that the 
votes are well counted. There is, of course, now this 
allegation of fraud in the case of Macedonia that is being 
investigated. You heard about that. But I think that citizens 
now do have the possibility of----
    Mr. Rohrabacher. So you don't really take these charges of 
corruption and ballot stuffing and----
    Mr. Vejvoda. That is what is being investigated, these wire 
taps and we will see what the prosecution in Macedonia comes up 
with up. They are very serious allegations. I do not----
    Mr. Rohrabacher. So if we are only going to focus on the 
political progress, because the economic progress has been so 
low, we end up having to close our eyes to the other things?
    Mr. Vejvoda. No, not at all, not closing our eyes at all. I 
think, again, the journalists, the citizens, there are strikes 
in our countries. People stand up for themselves and when they 
see unemployment or difficulties in government in going about 
the reforms, people are very supportive of these reforms. In 
fact, they are more supportive of reforms than joining the EU 
or NATO because they know it is about us.
    So when we talk about the EU and NATO, what has been very 
clear and we talk about 15 years again in countries like Serbia 
because it is the fall of Milosevic that really marks the 
turning point for the region, when that authoritarian ruler was 
beat by us citizens at the polling station in a free election 
which we defended in the street, half a million of us went down 
into the street on October 5, 2000 to defend our freedom.
    The case is that people know that freedom is valuable and 
they defend it, but we again are not an island in the Pacific 
that lives off coconuts. We are dependent on the world markets. 
For example, in Serbia we have a huge car plant that is owned 
by Chrysler-Fiat that has been doing well, but not everyone has 
the fortune to work in that car factory. So it is about 
foreign-direct investments. There is no economic domestic 
capacity in any of our countries. They are not billionaires. 
They are not Bill Gates or Warren Buffets who can invest. We 
need to await support either from international financial 
institutions and I would add the European Bank for 
Reconstruction and Development and the European Investment 
Bank.
    Mr. Rohrabacher. I would have to suggest that if the 
economic situation does not improve and it continues to be more 
like Greece than like other countries in the world, I predict 
that the democratic institutions you are talking about will 
come under even greater pressure and we have to understand that 
if young people can't find jobs, do end up getting recruited, 
and if they see that their own Government has certain levels of 
corruptions, it tends to destabilize the whole country.
    Mr. Vejvoda. Mr. Chairman, if I could just add one 
sentence.
    Mr. Rohrabacher. Yes, sir.
    Mr. Vejvoda. To put it all to bluntly, we have done war and 
we have been there in the '90s. And we have learned what the 
cost of conflict is. And that is why progress is a fact in this 
region. Nobody wants to go back there, not the Bosnians, not 
the Albanians, not the Serbs, because it has been a huge cost 
to their lives. We have lost 10 years. I had to change my 
career. I suffered also with my family and others as has 
everyone in the region and that is why we want to join the 
European Union and most countries want to join NATO.
    Mr. Rohrabacher. I think you are right and----
    Mr. Vejvoda. And so in spite of the resilience, the 
resilience is important to understand why we want, but of 
course, there will be examples of young going to fight for the 
Islamic states.
    Mr. Rohrabacher. Only if they are chronically unemployed 
and they have no hope in their life. I would certainly agree 
with your assessment that when people have been through the 
kind of war, and we have a situation now maybe I should ask you 
about it. There is a group, there were actually three brothers 
that were murdered by the Serbians and we were told that there 
would be some kind of action taken to bring justice to that 
case. Is there justice being brought to that case, for example?
    Mr. Vejvoda. Yes, this is a well-known case. The Bitici 
brothers and their brother who fortunately is alive met the 
Serbian prime minister who promised him a face-to-face, that 
this would be dealt with.
    Mr. Rohrabacher. Has that been dealt with?
    Mr. Vejvoda. It has not yet been dealt with, but the 
prosecution is working full steam on this. I think the Serbian 
prime minister will be visiting Washington soon at the 
invitation of Vice President Biden.
    Mr. Rohrabacher. The prosecutor is working full steam and 
how long has it been?
    Mr. Vejvoda. It has been long. It has been long.
    Mr. Rohrabacher. If that is full steam, I wonder what slow 
pace, if that is full steam. They are not working full steam on 
it. And there is a lot of things that need to be done full 
steam and they are not doing it.
    Mr. Vejvoda. And unfortunately, it is not only the case 
with this, but there are journalists who were assassinated 
under Milosevic's time whose cases are not closed yet also. So 
it is not only----
    Mr. Rohrabacher. Right. Well, let me put it this way. I 
think that we have to--we are marking the 20th anniversary. I 
think if progress continues at the rate that it has been within 
the next 20 years, you are going to see a disintegration rather 
than anywhere--anybody could be optimistic about it. Because 
the political reform--it is not reform, it is political 
realization of people don't want to kill each other. That will 
dissipate with time if you have people who are living hopeless 
lives in these various countries.
    And I do not--look, if the EU will loan them, I guess it is 
not the EU loaning $2 billion, but sitting right next to the EU 
and the EU has all of these hoops that these countries have got 
to jump through before they can benefit like the rest of the 
Europeans and they have been waiting for 20 years and they are 
still not in the EU. I mean Croatia is the one country that has 
made it. None of this gives me reason for optimism or 
especially to use the word progress.
    Mr. Meeks, you may go right ahead.
    Mr. Meeks. Thank you, Mr. Chairman. And I think what we may 
have here is between the chairman and I a classic case of is 
the glass half full or is the glass half empty. And from what I 
hear from the chair he says it is half empty. I think I side 
that it is half full.
    Mr. Rohrabacher. Is there vodka in the glass?
    Mr. Meeks. Not for me. So for me, 20 years is not a long 
time. And 20 years where we are starting to see that 
integration is substantial. And I think of--I can't help to 
come to these--my thinking and to my positions without also 
looking at a nation that has been here for over 238 years, the 
United States of America. And I don't see how we can be 
critical of countries that are trying to get together and work 
and have the integration in 20 years when we really haven't--
still, we are striving to be a more perfect union.
    I mean I couldn't help but think about what has taken place 
just a few short miles from here today, yesterday, in Baltimore 
where you have got a group of young men, unemployed, no sense 
of hope, none of those things exist. This is in the United 
States of America. When I think about the number of individuals 
who are being recruited from al Qaeda or for ISIS or whatever, 
right here from the United States of America. So I don't see 
how I can be so critical of others who are trying to strive and 
prove themselves just 20 short years when the United States has 
been trying to do it for over 238 years. It is a fact that the 
globe is now much smaller than it has been. And we do need to 
figure out how we integrate it and work collectively together 
and that is why in my estimation it is important for us and the 
United States and for the EU to work with other nations who are 
also striving to be better. There are ethnic differences, so 
that is why I asked the question before about that, just as 
there are ethnic differences still in the United States of 
America. But the only way that we can work that out is to try 
to figure out how we can talk and work that out and do it 
collectively as a human community and as a world community.
    So I would like to think that the progress that I have seen 
over the last 20 years where we have come from the slaughtering 
of human beings on a massive level to where now we are really 
starting to talk about the corruption that may be there, fixing 
the economy, fixing this and fixing that, on figuring how we 
work together better as opposed to how we destroy one another, 
to me that is truly a glass that is half full.
    Now we have still got a long way to go. We have still got 
to make sure that we would like the full glass and that is what 
I think that I am hearing some. And Mr. Vejvoda, I am hearing 
you say that what we are striving to do is to get better. And 
the economy, Lord knows, we just came out of the greatest 
recession since the Great Depression here in the United States. 
And everybody in the EU economy has been suffering when I look 
at the unemployment rates as going up.
    So it is important to me that we have this hearing and we 
have this kind of dialogue on both ways though because by doing 
that then maybe we can realize and try to figure out how we can 
improve and have a better situation.
    Now I get concerned because all areas of the world are 
important and oftentimes when I travel some say well the United 
States being the world's largest economy is focused here and 
not there. And that is why I think this hearing is important 
because the Balkans has to be still on the United States' place 
as we tend to look at some other places whether it is dealing 
in Ukraine or dealing in Asia or dealing in some other part, we 
have to make sure the Balkans is still in our focus because it 
is such still a key part of the world. And until we can do 
that--so I get concerned, for example, in the U.S. budget as I 
look as we put a lot of dollars now toward the Ukraine 
situation. I look that the focus is less on what is taking 
place in the Balkans. And so I am wondering how we make up for 
the lower levels of funding that remain so that we can continue 
being a leading force in the region along with the EU and 
keeping hope up because with a slow accession gives me concern, 
keeping hope up from the countries that are trying to get in, 
of gaining access into NATO or the EU that it, in fact, can 
happen. And what do we need to do to make sure that that 
happens?
    So I will get off my bandwagon. The question, for example, 
I get concerned about whether or not the dates and framework is 
still salvageable. I get--the questions that I have, so I want 
to throw that out. The question that I have is that since 2013, 
what progress has been made since Serbia and Kosovo signed the 
Agreement of Principles and Governing, the normalization of 
relations, and do both sides remain fully committed to the 
process. And if not, who is not? What can we do to help so that 
they can be committed to the process? I want to look at it on a 
positive side so that we can figure out how we can work this 
thing to make it happen so that we can be--we still are 
striving, we are never going to be perfect, but continue to 
striving to be better and working to be better and having it 
more in an integrated and therefore co-dependent scenario.
    Mr. Vejvoda?
    Mr. Vejvoda. Thank you very much, Congressman Meeks, for 
those questions. First of all on Dayton, and the 20th 
anniversary, there is a very concrete now proposal that is a 
joint German-British proposal of Ministers Steinmeier and 
Hammond that came out in November about how to kick start, to 
put it very simply, Bosnia out of this stagnation, both 
politically and economically. They both visited the region 
recently. As a consequence, Bosnia, the Parliament, the new 
Parliament that was voted in recently and the new government 
signed on the dotted line that they would work within this 
proposal on how to find socioeconomic steps forward and also 
importantly, they were given the next step in EU integration 
which is called the Stabilization and Association Agreement 
that by the way Kosovo will be getting in a few months, if not 
weeks, if my dates are correct. That was announced by the EU 
Special Representation Samuel Zbogar just 2 or 3 days ago in 
Pristina.
    So I think again the EU, with all of its troubles and 
slowness, is a tanker that moves ahead and the enlargement 
progress writ large is moving in spite of what was mentioned 
about the fatigue. And obviously, European countries are also 
in a process of what is called renationalization because 
everybody has economic and social problems and thus, they don't 
want to be seen as helping others or giving aid money when 
money is needed for employment.
    So again, being very cautiously optimistic on Bosnia, which 
has been the slowest to move, identifiably, of all the 
countries, I think when the new government that has been 
established and having signed this compact with the European 
Union, we have to see what happens in the coming months and 
then come back and assess that.
    On the agreement between Belgrade and Pristina and Serbia 
and Kosovo, I think as I said, it is a historical agreement. 
There is no easy way around this. Both countries know, both 
capitals, both prime ministers know that if they do not reach 
an agreement there is no help out there. There is no movement 
toward either the European Union or anywhere else. The EU made 
by its own recognition a mistake by taking in Cypress as a 
member state with an unresolved territorial issue. As you know, 
the north of the island still is under the control of Turkey. 
And it so happened people make mistakes and they said never 
again. So that means that both Belgrade and Pristina have to 
resolve this, sign on the dotted line in the end at the 
doorstep of Europe, in the door step, just after the door step 
and what is termed the process of normalization. This is going 
to last several years. Nobody is at the door step of Europe 
yet. I think the closest is Montenegro and after that Serbia. 
They both hope to finish the negotiations by 2019, 2020. And 
there is the ratification process.
    So I think that the fact that we didn't have a government 
in Pristina for well close to a year hindered the advance. 
Again, as a citizen, I would like to see this move much more 
rapidly to see more movement in this direction. But again, 
because we are dealing with a conflict, a post-conflict 
situation, we have leaders who have now signed, Prime Ministers 
Dacic and Thachi now; today, Prime Ministers Mustafa and Vucic 
met in Brussels on February 9th. They made an agreement on the 
judiciary. They will be meeting again. The teams are meeting 
all the time. They have, we have not Ambassadors, but 
representatives on both sides sitting in Belgrade from Kosovo 
and vice versa. Our foreign minister was in Pristina just a 
month ago for a meeting of foreign meetings. There is more than 
meets the eye. Let me put it that way. These things do not hit 
the news because they are not news, if it is not something 
dramatic. What I am saying is we are moving slowly up the hill.
    Mr. Rohrabacher. I will give both of you a chance to give 
me a 2-minute closing statement.
    Mr. DioGuardi. No questions.
    Mr. Rohrabacher. But only two. Two minutes, Joe.
    Mr. DioGuardi. Let me reflect on what you said and what Mr. 
Vejvoda said. You know, when you talk about the young people of 
Kosovo and Macedonia, you are talking about 60 percent 
unemployment. Think about that. When you are talking about the 
young people in the province that is in southern Serbia, 
annexed illegally in 1956 from Kosovo called Presheva, Presheva 
Valley, three towns, Presheva, Medvedja, and Bujanovac, the 
unemployment is 90 percent.
    Now how much longer can the Albanian people put up with 
this kind of isolation, no jobs, and with the highest birth 
rate in Europe. This is why the United States has to continue 
to be present aggressively in the Balkans to protect them. They 
have American values. They are the most multi-religious 
tolerant people in Europe. And I daresay, the way the Albanians 
in the 15th century prevented the Ottoman Turks, the barbaric 
Ottoman Turks, from taking over all of Europe, don't forget 
they took over Albania, but the Albanians wore them down for 25 
years.
    Remember what Mehmetd II said in 1453 when he took 
Constantinople and no one believed it could be done. He said, 
``Now we will make St. Peter's Basilica a stable for our 
horses.'' They were dead set on taking Italy and the rest of 
Europe. And, guess what ISIS said 3 weeks ago? ``We are going 
to now make St. Peter's Basilica a stable for our horses.'' 
Five hundred years has passed and nothing has changed.
    The only people in Europe today that are going to keep ISIS 
out of Europe are the Albanian people and they are doing it 
right now. Because they are nominally the largest Muslim 
population, because they were forcibly converted by the Ottoman 
Turks over 425 years, but they are moderate, secular, American 
democratic type people and we need them on our side to insure 
that ISIS doesn't get a foothold in Europe.
    Mr. Rohrabacher. Thank you very much, Joe.
    Mr. Vejvoda. Just very briefly, Chairman Rohrabacher, I am 
very happy to hear that you will be--you are planning to visit 
the region. I think that is the best way to beyond us who are 
testifying here today.
    Mr. Rohrabacher. Mr. Meeks, we are planning to visit the 
region?
    Mr. Meeks. Absolutely.
    Mr. Rohrabacher. All right. There you go.
    Mr. Vejvoda. I am glad we locked that in. So you will 
genuinely see for yourselves and obviously you will be meeting 
everyone from government and nongovernmental organizations to 
representatives of our minorities and our business people which 
is very important.
    I would just like to mention that in Belgrade in September 
there will be a meeting of business people with all the prime 
ministers of the region called Southeast European Compact that 
was supposed to be held in March, but was delayed. It is about 
the credibility of the West, may I put it, of both the European 
Union and the United States, to see to it that these countries 
are finally integrated. I think there is a way to move this 
forward more quickly. The countries have 90 percent of the 
obligations to reform themselves, to put their institutions to 
consolidate them, make them as democratic as possible and for 
the citizens to be engaged and see to it that their elected 
officials are accountable and responsible.
    Finally, I think the whole region, all of these countries 
individually have decided and have joined the community of 
values that represents the transatlantic community and I think 
that is the basis of the fact that this--that one can be 
cautiously optimistic that we are moving in the right 
direction.
    Mr. DioGuardi. Mr. Chairman, can I just make one concluding 
comment? Mr. Vejvoda has to understand that Serbia works 
overtime to keep Kosovo out of the United Nations, although 106 
countries have recognized it. And to keep them out of all 
European institutions. They want them completely isolated, so 
how can we say that we are happy with normalization and 
stabilization?
    Mr. Rohrabacher. I promised both of you the last minute and 
so we are going to give you an extra 30 seconds to answer that.
    Mr. Vejvoda. Actually, I would like to correct the 
Honorable DioGuardi. It is 110 countries that have recognized 
Kosovo, so it is going----
    Mr. DioGuardi. But not Serbia or Russia or Greece.
    Mr. Vejvoda. There is an example called the two Germanies 
that the negotiations between Belgrade and Pristina in 2007 and 
then under Ambassador Ischinger advocated. I think again, there 
is nothing simple in these processes. I think we are moving to 
a full normalization. I don't need to tell you that domestic 
politics is the key one because politicians like to be elected 
and they choose their moments of advance or waiting for the 
right moment to do the difficult decisions.
    Mr. Rohrabacher. I would like to thank both of you and all 
of the witnesses today. I have some unconventional ideas of my 
own as people know, but I generally believe in self-
determination and democratic government and respecting the 
rights of other people. And I find that there has been great 
double standards when people--our friends in Europe, I think 
World War II created a basic yearning for stability and that 
yearning for stability sometimes creates pressures that 
actually lead to problems, more problems than if people were a 
little bit freer and at least I would suggest less structured. 
And within the EU, I don't see the EU structure and NATO as 
being the wherewithal, but these other nations have been told 
it is. I mean, we will see.
    I frankly see the EU as also having a lot of problems with 
economic elites that manipulate the rules of the game for their 
own benefit, sometimes, and other times for the benefit of 
their country. But whatever it is, we need to make sure that 
there are evil forces in the world beyond what we are talking 
about and there are evil forces. We do have an upsurge in 
radical Islam that could be to our civilization what the 
expansion of a fanatic Islam was a thousand years ago. And that 
would be a new threat to both western civilization.
    I will have to say that if el-Sisi, for example, falls in 
Egypt, my guess is that Qatar, Kuwait, all of those countries 
will fall and you will a radical Islamic penetration into 
Central Asia and then with North Africa. That is what we are 
talking about, a great, historical change in the reality that 
we face today. And I think how are we going to thwart that? One 
way is to make sure that those Muslims who are in Europe, the 
Albanian people in particular, are treated fairly and their 
children don't find a hopelessness when they look to the 
future. And Joe's statistics of 60 percent unemployment in some 
of these areas and 90 percent in some areas, that will lead to 
problems, major problems and it has been 20 years. We cannot 
mark another 20 years and with that said I am very grateful to 
you, Joe, thank you, and thank to all of our witnesses. I think 
this hearing has been worthwhile----
    Mr. Vejvoda. Yes.
    Mr. Rohrabacher [continuing]. In starting a discussion and 
we will finish that discussion and I will find out personally 
whether or not that glass in Belgrade is half full or half 
empty. And if it is half full, I will test it. Thank you all 
very much. This hearing is adjourned.
    [Whereupon, at 4:41 p.m., the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

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                   Material Submitted for the Record


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Material submitted for the record by the Honorable Joseph J. DioGuardi, 
 president, Albanian American Civic League (former Member of Congress)

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