Why is a book on the evolution of Europe’s south-east an urgent task? Why is it an important task at all? Are there not enough books on cultural uniqueness, esthetic qualities, and historical importance of this area on the bookshelves already? There are indeed, though it is always interesting to discover new aspects. But the motive for this book, its starting point, is radically different. Its focus is on the contemporary stage of a large entity of political economy, of a continental unit just being born, it is on the fragile fate of a future Europe. Europe’s evolution, its second renaissance, takes place with different speed and in rather different modes in the diverse parts of the continent. A basic suggestion put forward in this book is that the south-east part of Europe is currently the most crucial component of Europe’s further development.1 To understand why this is the case a short tour de force to explore the history of political economy of Europe is necessary. Since the end of World War II Europe, the ‘old continent’, has experienced a most surprising evolution. Reborn as a divided former battlefield, which just had lost a considerable amount of its population and about half of its capital stock, its future seemed to be endangered. Torn apart by the newly emerged global superpowers to its east and to its west and characterized by the multi-facetted internal restructuring processes brought about by the dynamics of the changed power relations – new local and global setups – Europe’s first long-run recovery process lasting till the 1970s was astonishing. In the west this process was embedded and supported by international agreements and institutions like the Bretton-Woods system of fixed exchange rates. In the east a new division of labor between more advanced manufacturing in Eastern European countries to be exchanged for cheap energy from the Soviet Union was established, basic infrastructure was rebuilt. Despite several dangerous episodes the Cold War between the two hegemonic systems remained cold – Europe remained on its reconstruction trajectory, but also remained divided. Then a sequence of two important blows2 led to a shake-up of socioeconomic evolution: first the breakdown of the fixed exchange rate system in 1971 initiated a global energy price shock, which in turn synchronized all business cycles in the western world and thus led to a heavy economic downturn in Western Europe in 1975. The falling US dollar could re-conquer export markets and the

suffering West European economies had to restructure themselves. In the end it was this general defensive position with respect to the strong second post-war upsurge of the USA in the early 1980s, which led to the relaunch of the idea of a politically united Europe able to support its global economic players, its transnational corporations. In this decade the political will for the installation of a European Union materialized. Of course, the idea had existed earlier, but the critical mass of a coalition of powerful groups in Western Europe only became possible under the threat of global economic pressure. Then the second shake-up occurred: the breakdown of the Soviet Union in the early 1990s. All of a sudden the iron curtain fell, and the two parts of Europe potentially could be re-united. This was a historically unprecedented situation; the European project could suddenly be extended to include the so-called transformation countries. This terminology, of course, immediately reveals the ideological supremacy of the west: which parts serve as the future role model, and which systems have to be transformed. After twenty years of transformation it is rather evident that this process was not the easy return to a natural state of affairs, which temporarily had been disturbed by Stalinist production systems.3 One lesson learned certainly concerned the wide variety of possible transformation paths for Eastern European countries. While Finland – after a deep fall – in several important respects quickly became a leading member of Europe, other countries were confronted with a long-lasting stagnation or welfare decline – even if compared to their Stalinist past. Despair of large parts of the population (all those not ready to organize quick profit around the newly defined political setting) followed and till this day in many areas an uneasy relationship between eastern and western parts of Europe cannot be denied. To develop a common political and economic framework for a continent with such diverse economic and political history, with languages and cultures constituting borders rather than being an interesting variety of views offered and reconciled, is difficult. To start a unification process under these circumstances certainly was a risky, though worthwhile task. It is this context of the last twenty years that explains the special role presently played by the south-east part of Europe. It all started with the Balkan war, a war initiated by the president of a non-European superpower, partially against the consent of Western European leaders. To explain this move one has to refer to geopolitical considerations, which implies a considerable amount of speculation about the motives of the US government at the time – a daring analysis, which goes beyond the scope of this introduction. Whatever its immediate origin, it is sure that the characteristics of the Balkan war are quite unique. The way in which the former state of Yugoslavia broke into parts demonstrated how little can be explained by purely economic considerations, and how important the ideological amplifiers not grasped by standard economic theory are. With the exception of the religious aspects of antiSemitism, religious warfare had not been observed in Europe for a very long time. The intensity with which at micro-and meso-levels ideological constructs (including religious metaphors) became instruments of war on the macro-level has been spooky and foreshadowed elements of Taliban warfare in the Near

East. The south-east of Europe (in contrast to the rest of Europe) thus experienced not only war; it also saw the first reappearance of micro-rooted ideological amplifiers of the religious variety. This feature, the emerging importance of religious and cultural factors on micro-levels, has not disappeared in South-east Europe since. The access of Turkey to the EU, its internal problems of extreme cultural and economic imbalance, its external role as the outpost of a secularized Europe toward the Islamic Near East, almost every aspect of Europe’s south-east border is infiltrated by ideological topics and religious beliefs. As brute religious convictions proved to be powerful tools for warlords during the Balkan war, so was the rediscovery of direct coercive action itself. The sudden loss of the executive power of a more or less accepted central ruler in Belgrade gave local military leaders the possibility for uncontrolled coercive action. Direct coercive power was on the agenda again. Strong religious ideology and strong coercive power typically go hand in hand – so far these developments are not surprising. What is surprising is that after decades of civilized neighborhood relations (in a wide sense) such a fierce breakout of this evil pair of religious/cultural convictions plus use of direct military action was possible. Even if in some parts of Europe’s south-east the dynamics of these forces seem to be frozen (e.g. Turkey and Cyprus), there is a continuing latent potential.4 South-east Europe’s evolution can neither be understood nor anticipated without a close inspection of this potential. Though these elements play a special role in the south-east as compared to other parts of Europe, it never should be ignored that they are embedded in and even encompassed by economic and geopolitical developments. Economic structures, either given as natural endowments or acquired by endogenous efforts, are the foundation for the determination of the role of the south-east in Europe’s future division of labor. In this sense the political economy, more precisely its trajectory, is the basis for the above-mentioned special characteristics of coercive powers and cultural traits. The structure of the book follows this trinity. The first part investigates economic aspects of South-east Europe. The second part deals with politics including military questions. The third part discusses cultural phenomena. Since the book aims at an overarching explanation of recent evolution and informed midrun anticipation, it remains sketchy in some detail to be able to drag the reader to more general conclusions. This is necessary to avoid a loss of attention caused by too many singular issues. In other words, this book is not encyclopedic. It rather tries to follow some superficial esthetic principles:5 each of the three parts consists of three chapters. Part I, Economics, starts with a chapter characterizing the evolution as driven by the major agents at work in the area since the end of World War II. This takeoff is rather unconventional for an economic analysis, but proves to be of utmost importance for taking account of the changes of tide, the vivid switches of political economy constellations, which occurred in Europe’s south-east part since 1945. Economic expansions, development of infrastructure, consumption and investment patterns, all these elements in the end are driven by economic agents.