We described in chapter 4 how the transition to a market economy is almost completed in those countries that are to become full members of the EU in 2004. But there are other parts of Europe where the transition is less advanced, and where the prospect of EU membership seems so far away that it does not provide a guide for political action today. This raises the question to what extent countries that have a ‘European vocation’ could benefit from the EU anchor even if membership is only a distant dream. This is the key policy issue for the countries in South-East Europe today.

We will concentrate on the particular case of the countries that emerged from the dissolution of Yugoslavia, avoiding a definition of the Balkans explicitly, as membership of this region is not considered a badge of honour. Moreover, each case in this region has specific problems. For our purposes the Balkans (or SEE – South-East Europe) is that part of Europe that is not included in the next wave of accession to the EU, but that is on the path towards EU membership in the long run. This implies that Slovenia is definitely not part of the Balkans and Croatia might leave this region if it can convince the EU that it has left its authoritarian regime behind. But a country like Romania, which is an official candidate for membership in 2007, risks slipping back into the Balkans if its regime does not start real reforms.