Couchner's Ownership

Various things can be heard about the most renown banker and federal minister for relations with international financial institutions, Borka Vucic, however even her most serious critics won't deny that she is skillful in money matters and that she has a good nose for profits. Even Evangelos Mitilineos, a Greek businessman, believed that when he started financing Trepca, having been previously persuaded by her. However, he was convinced that upon entering Kosovo he would neatly round up the metallurgic empire which he had started to build in the Balkans. Their business enthusiasm wasn't daunted by the deep political crisis, by war in the province, nor by the arrival of international troops. On the contrary, Vucic claimed that once international troops entered into the southern Serbian province, she would built a profitable business network for the domestic banks, while Mitilineos self-assuredly kept announcing, via London's Financial Times, that anyone who shall be in the position to decide upon the fate of Trepca shall have to deal with him.

Today, one year following KFOR's and UNMIK's arrival in Kosovo, things stand slightly differently. Local branch offices of Yugoslav banks in Kosovo are gapingly empty while Mitilineos is leaping from one court session to the next with the intention of proving his claims on Trepca. The main players in Kosovo are neither Vucic, the Serbian nor Yugoslav government but Bernard Couchner, the UNMIK head, with whom Mitilineos is trying to establish close relations while the government in Belgrade is attacking and ignoring him.

The final political outcome for Kosovo is nowhere in sight while the economic status of the southern Serbian province is fairly clear - UNMIK and Couchner are the undisputed rulers there. Owing to his by-laws, Couchner immediately proclaimed the German mark as the legal means of payment on the territory of Kosovo, he then blocked payments in name of tax and customs duty into the republican and federal budget and finally, with a vitally important by-law from last year, he completely took over the management of the assets and resources in Kosovo. According to that by-law, the right to manage the entire movable and immovable assets in Kosovo, including bank accounts, payment operations and overall assets previously owned by the state of Serbia or FRY, has been taken over by UNMIK.

Due to these decisions, Couchner was reproached not only by the Serbs and Albanians, since both sides believe they have exclusive rights over Kosovo's economy, but also by the foreign partners of Kosovo's companies. The Italian STET and Greek OTE, which had previously bought 49 percent of Telekom Serbia's shares, didn't view UNMIK's decision to grant France's Alcatel company the licence to build a mobile telephony network in Kosovo benevolently. When they bought a part of Serbian Telekom, the Italians and the Greeks bought it at a price which included Kosovo's piece of the company. Otherwise, it is interesting to note that one of the members of OTE's managing board is the aforementioned Mitilineos who had at a certain moment  intended to purchase an additional four percent of the Serbian telephony shares.

And while the government of Serbia, or so it seems, has given up its ownership rights in Kosovo, the ministers of finance of the European Union countries, who appear at the same time as donators for the reconstruction of the southern Serbian province, are heavily involved in the future economic and ownership fate of Kosovo. According to VREME's sources close to the office of Bodo Hombach, head of the Stability Pact for South-Eastern Europe, as envisaged by EU, privatisation of small and middle-sized firms shall commence even prior to the local elections in Kosovo which should increase the employment rate of the local population. Large state companies, around fifty according to the evidence of Belgrade's Economic Institute in Kosovo, shall remain untouched until the results of the elections are announced and until a legal and legitimate government is established. As for the hundred or so smaller state companies, a pilot privatisation project is being prepared which plans to put them on offer by the end of the year via tenders offered to all interested local and foreign investors, as VREME is informed in Pristina's UNMIK headquarters. According to the advice of the expert team of the European Bank of Reconstruction and Development (EBRD), UNMIK could start offering concessions in the near future for the exploitation of natural resources and electric-systems. The reconstruction of Kosovo's economy shall be funded from these sources along with social programs for the local population, which cannot be covered by UNMIK's 525 million German mark slim budget for this year, of which up to 200 million is to be collected from donors.

These intentions of the international administration and EU aren't viewed favourably by local Albanians who are co-operating with them either since they believe that the fate of the state-owned companies in Kosovo shouldn't be tackled until a final political solution for that southern Serbian province is achieved.

In the international community itself, as noticed by the International Crisis Group (ICG) in its recent report on Kosovo, certain members are recommending that  Kosovo's privatisation should not be resolved before the rather complicated picture of ownership relations in those companies is cleared up. That shall be a huge problem since the state of Serbia has completed what Couchner and his administration are trying to do now a long time ago. By various decisions, of which some haven't even been published in the Official Gazette, the government of Serbia and the republican Development Fund have practically appropriated the province's entire economy. According to a recent study of the Economic Institute and the Development Fund, of 193 large companies in Kosovo, 88 are in the hands of the Fund. In 76 companies, the owner is a company from Serbia, while 29 companies are jointly owned by companies from Serbia and the Fund. When ownership issues are to be resolved, companies from the republics of the former Yugoslavia shall crop up with their demands, since they were obliged to help build Kosovo's economy as it was the least developed area of the former SFRY. As stated in the aforementioned study, just in the period between 1955-1985, via development funds, slightly less than 20 million dollars were poured into Kosovo which amounts to two gross domestic products of this current Yugoslavia.

As a beginning, Couchner appointed judges in March for the court in Kosovska Mitrovica where Mitilineos has regularly filed mortgage rights on the metallurgy of lead and zinc in Trepca. In his contacts with Couchner, Mitilineos stressed his readiness to take over the company and invest into its revitalisation, even though the production in Trepca makes up only ten percent  of the production of his Mitilineos company. In front of the same court, the French metal giant SCMM shall try to present its demands, says Dr. Milan Kovacevic for VREME, a foreign investments consultant. That company, namely, claims that it is the owner of around three percent of Trepca's capital, following the assumption of debt from Jugobanka. At this moment, UNMIK is trying to prepare Trepca's mines for production purposes, primarily to make it safe for the miners, while constantly putting off what they had already announced, the appointment of a new management team which would commence resolving complicated ownership issues. According to Dr. Kovacevic, with the help of donators and EU governments, we should expect a continuation of Kosovo's economic revitalisation, along with a liberalisation of the economy, "which shall separate Kosovo from Belgrade even further".

Even though, as data collected by experts of the Economic Institute and Development Fund two years ago shows that from Kosovo's overall economy, successful financial recovery would be possible in some ten or so companies only, word is of primarily energy-related capacities which are not irrelevant for either Serbia or for Kosovo's Albanians. Due to this, various Serbian management teams in Kosovo's firms, even though no longer in power, are announcing a new strategy, similar to Mitilineoso's. Trepca's former Albanian management team is planning to do the same, and claims that that company should be transformed into a state-owned one, but that its owner should neither be Serbia nor Yugoslavia but the state of Kosovo instead.

CLASS STRUCTURE

In Kosovo, as stated even in the latest publication of the Stability Pact, two classes of citizens exist. The majority, which is clamped down in poverty, and the minority, employed by KFOR and UNMIK or other international humanitarian organisations which are operating in Kosovo, and whose standard of living is more than comfortable. This group includes those Kosovo citizens who are renting their apartments to foreigners for on average 1500 German marks per month. At this moment the most delicate issue is the one involving pensioners who numbered, according to data from the Serbian Fund prior to NATO's bombardment, around 90.000. The Serbs and refugees from Kosovo, unlike the Albanians, are currently the only ones who are receiving pensions since UNMIK has stopped tax and contributions payments into the Serbian budget and funds. On the other hand, UNMIK cannot resolve this issue since its budget for this year amounts to 525 million marks. From this sum, 20 percent is intended for social grants, but they are being redirected to the neediest people. Until then, the local Albanian population which isn't employed is living thanks to help received from relatives abroad.