The Balkans Truce So what sort of peace will it be?: Reconstruction - Fresh start will cost billions

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The Independent Online
STANDING OUTSIDE Cologne's large, Gothic cathedral, the incoming president of the European Commission, Romano Prodi, used a TV interview to put a multi-billion pound price tag on ambitious new plans to rebuild the Balkans.

As European leaders moved swiftly to shore up the peace deal struck with President Milosevic with promises of aid, Mr Prodi estimated the cost of reconstruction of the region.The sums involved will, he told CNN, be "enormous", putting his estimated figures at 5bn-6bn euros (pounds 3.3bn- pounds 3.9bn) a year for five years, or the equivalent of 2 per cent of the EU's gross domestic product.

The figures provided by the former Italian premier imply a total spending of up to 30bn euros although it was unclear whether this would simply be Europe's contribution.

One point that was hammered home by Tony Blair is that the money will not be destined for Belgrade while President Milosevic is in charge. In an appeal to the Serb people, he said: "You have a dictator in charge, an indicted war criminal as your leader. You cannot expect to be part of the reconstruction of the Balkans while that remains so."

At their summit in Cologne, EU heads of government agreed to set up a new agency which would coordinate European aid efforts to the region.The agency will be autonomous and will work with other international institutions, including the World Bank.

It emerged yesterday that the EU now envisages three prominent figures overseeing the reconstruction of the Balkans. The current EU representative in Bosnia, Carlos Westerndorp, may step down this month, if he is elected to the European Parliament, and will be replaced. In addition there will be a special co-ordinator for the "stability pact", and a special representative for Kosovo. This will probably include responsibility for co-ordinating the UN, EU, Nato, and the the Organisation for Security and Co-operation in Europe.