The Dayton agreement on Bosnia was expected to benefit southern Balkan states too. They avoided following the old Yugoslavia into violent disintegration and anticipated that the end of UN sanctions and the Greek economic blockade of former Yugoslav Macedonia (FYROM) would increase economic activity and political stability. As with other aspects of the post-Dayton period, reality has proved more complex and less encouraging.
IN THE SOUTHERN BALKANS, THE ABSTRACT THREAT OF THE SPREAD of an orthodox war has been replaced by the actual spread of localised terrorist and Mafiya violence, with politics and economic elements inextricably intermingled. The Croatian and Bosnian wars have caused fundamental changes in the social and economic structure hundreds of miles away. The relations emerging in the postDayton period show all the classic features of anarchocapitalism. UN sanctions during these wars were central in providing an ideal climate for Mafiya growth.
The ending of United Nations sanctions removed very large quantities of hard currency generated by petrol smuggling from many localities in the southern Balkan region, particularly in Bulgaria, FYROM and northern Albania bordering Montenegro. As a direct result, their currencies have experienced serious pressure in the past year, with a drop of about 20 per cent in value in Albania, and almost total collapse in Bulgaria.1 The Mafia organisations that had grown during the sanctions period turned their attention to other activities, with an upsurge in drug and arms trading.
A Balkan development
Political violence has also grown, in different forms in the different countries. In Albania, Mafia groups undoubtedly played a part in the violence associated with the Albanian general election in May 1996. In Bulgaria, the assassination of the former Prime Minister, Andrei Lukanov, was only the most prominent in a growing number of political killings; and in FYROM, the political climate is still heavily influenced by the assassination attempt on President Kiro Gligorov in October 1995.
This growth of violence could, at one level, be seen merely as a reassertion of local traditions - a 'Balkan' development that was only to be expected. In some sense this is, of course, true. The Lukanov assassination in Sofia last October could, in every detail, have been an Internal Macedonian Revolutionary Organisation `execution' from the 1920s, as could the Gligorov car bomb. But there is evidence to suggest that the wider growth in violence is part of a change in the political climate and very fundamental structural changes in the economies.
An important factor is the end, for the immediate future anyway, of the practical possibility of real integration into Western institutions, the European Union in particular. Thus, the elites have no pressing motive to modify their behaviour to conform to European norms, which are themselves becoming increasingly subject to criticism.
As such, anarchocapitalism has wider significance than merely increasing the risk for Western companies operating locally. The 'Mafiaisation' of the former communist states in the southern Balkans also has wider implications for Mediterranean and regional security.
The shape of many, perhaps most, post-Dayton societies in the southem Balkans is becoming visible, and it is not an encouraging picture. This is particularly so for Greece, as the only EU and NATO member on the Balkan peninsula, with a long land border with all three states.
Although most of the new arsenal being purchased by Greece is concerned with defence against what is seen as an expansionist Turkey, there is also a substantial element of a new `Fortress Greece' requirement to defend the long northern borders and control illegal immigration - helicopters and light military vehicles in particular. The problem of population movement in the north is being faced by the Simitis government. …