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Mea culpa 

Bulgarian Prime Minister Sergei Stanishev said Bulgaria deserved to be criticised in the Commission's report, the Bulgarian press reported. 

"There are grounds for criticism, to be honest," Stanishev told the press in the Black Sea city of Varna. “The truth is Bulgaria is learning how to work with European money," he added. 

The opposition has attacked the government, including over Bulgaria’s decline compared to Romania. A no-confidence motion is expected to be voted upon in Parliament today, but the coalition government controls 150 out of 240 MPs and is expected to survive. 

More interestingly, a poll showed that a majority of Bulgarians were siding with the Commission and believe that the EU should indeed freeze its subsidies. The perception among ordinary citizens, shows the study by the Alpha Research Institute, is that this money is not reaching them. Thus many Bulgarians welcome funding cuts as a way of hurting the corrupt political class. 

"On behalf of the Office of the Prosecutor, I would like to congratulate the Serbian authorities … on achieving this milestone in co-operation with the ICTY," UN prosecutor Serge Brammertz said in a statement following the arrest.

"This is a very important day for the victims who have waited for this arrest for over a decade," he added.

For his part, EU enlargement commissioner Olli Rehn called the moment: "historic for international justice."

It is also "very important for Serbia's European aspirations" and "proves that the new government of Serbia has the determination to turn the page, leave the nationalist past behind and move towards a European future," he added.

In addition, Gruevski urged Athens to recognise the existence of the Macedonian minority on its territory and grant them the right to education in their own language as well as to foster their culture and traditions. 

Greece immediately reacted. In response to Gruevski's letter, Greek Foreigh Minister Dora Bakoyiannis said on Tuesday that the extreme nationalism from Skopje "sows the wind, but reaps whirlwind". 

Bulgaria could face further sanctions in the area of justice and home affairs, including having its membership of the EU's borderless Schengen area delayed, after recent reports from Brussels highlighted the country's problem with corruption.

A group of member states, including the UK, France and the Netherlands is pushing for tougher sanctions against Sofia, Dutch daily NRC Handelsblad reported on Thursday (17 July).

Brussels is to call on Sofia "to cleanse its administration" and make sure that EU money is not "siphoned off by corrupt officials, operating together with organised crime."

Both reports, leaked to the media, have provoked an outcry in Bulgaria and opposition parties have called for a non-confidence vote against the government next week, in addition to starting an impeachment procedure against the president.

Croatia will be ready to join the EU in 2009 and its membership is not going to be delayed by the EU's current institutional "crisis", Croatian President Stjepan Mesic has said.

"I understand European countries, including France, which intend to solve the EU's institutional problems before proceeding to any new accessions … [But] we will speed up the rhythm of our reforms and be ready in 2009 to join the EU as its 28th member," Mr Mesic told French daily Le Figaro in an interview published on Tuesday (15 July).

Kosovo, which seceded from Serbia in February of this year, is one of Europe's most under-developed economies and is highly dependent on foreign subsidies.

From 1999 to 2007, when under the direct administration of the United Nations, Pristina benefitted from over €3.5 billion in reconstruction assistance.

However, the official unemployment rate remains a worrying 43 percent, with youth unemployment estimated even higher, at around 60 percent.

Kosovo's economy grew by 4.4 percent in 2007, with an inflation rate of 13.6 percent as of April, 2008.

The largest chunk of money for Kosovo is to come from the European Commission, followed by an American contribution of some $400 million. Beyond the EU's own funds, member state Germany has pledged €100 million, and the UK has confirmed an aid package worth £23 million.

Serbia's parliament on Monday (7 July) approved the country's new government which will be led by prime minister Mirko Cvetkovic and favouring prompt EU membership– but which remains opposed to Kosovo's independence.

The government coalition will be made up of a pro-EU alliance – led by current president Boris Tadic's Democrats (DS) – who won the elections in May, but did not get a big enough majority to form a government on its own, and the reformed Socialists (SPS) of late president Slobodan Milosevic

However, the new premier also stressed his country was nowhere close to accepting Kosovo's independence.

"I pledge allegiance to the Republic of Serbia and promise with my honour that I will respect the Constitution... and to be committed to the preservation of Kosovo and Metohija within the Republic of Serbia," the premier and his ministers vowed after being sworn in.

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My own hunch is that they will try to find a way to enforce the Lisbon treaty without the non-ratifiers. As a first step, they will try to offer the No-sayers a quit-and-rejoin deal. It would be the least divisive option of all, but unfortunately, it may also be one of the least realistic. It would obviously require their consent, which is far from assured. In Ireland’s case it may require a referendum to get out and another one to get back in.

If this is not possible, there are several other options involving varying degrees of involuntary separation. For example, everybody would formally remain inside the EU on the basis of the Nice treaty, but the ratifiers would organise their areas of co-operation outside the EU and its institutions – on foreign policy, immigration, economic governance, maybe even on energy and the environment. They could do so using the provisions of Lisbon treaty or any other rules they choose among themselves.

It also comes in the aftermath of Ireland's rejection of the Lisbon treaty in a referendum 10 days ago, which has prompted divisions among EU leaders about the possibilities of continuing with the enlargement process at this stage.

France's president, Nicolas Sarkozy, and Germany's chancellor, Angela Merkel, have both declared that EU expansion will have to be halted until the document enters into force, while leaders in other countries – such as Poland – have said the process can continue.

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