BOSNIA AND HERZEGOVINA
The European Union and Bosnia and Herzegovina signed a Stabilisation and Association Agreement on June 16, formally launching the country's EU accession process. Yet this was virtually the only good news of significance in the country for the year.

In July, anti-corruption watchdog Transparency International (TI) announced that it was suspending operations in the country and evacuating its staff because of threats against them.

In September, at least eight people were injured and three arrested after followers of the radical Muslim Wahabi movement tried to block the opening of Bosnia's first gay festival.

At the end of October, Richard Holbrooke, chief architect of the 1995 Dayton Peace Agreement, said that currently in Bosnia "there is probably more tension than there has been at any time since Dayton".

A European Commission report in November said that Bosnia needed strengthened commitment and determined action against corruption, drug trafficking and money laundering. "Access to justice in civil and criminal trials remains a matter of concern, and equality before the law is not always guaranteed."

On November 8, in response to growing pressure from Brussels, the leaders of the three most influential parties in Bosnia and Herzegovina, Serb, Bosniak and Croat, struck a long-awaited yet unexpected deal on issues including amending the constitution, carrying out a census in 2011, and dealing with state property issues.

On November 10, EU foreign policy chief Javier Solana and Enlargement Commissioner Olli Rehn presented a joint report outlining a "comprehensive strategy for a reinforced European engagement" in Bosnia and Herzegovina.

CROATIA
Along with Albania, Croatia got the green light to join Nato in spring 2009, and in October was described in a European Commission report as moving forward at a steady pace to meet the requirements for EU membership, although corruption remained widespread, the report said.

July found Croatian leaders, including president Stjepan Mesic and foreign minister Gordan Jandrokovic, insisting that the country would be ready in 2009 to join the EU in spite of the institutional crisis in the wake of Irish rejection of the Lisbon Treaty.

Croatia's prime minister Ivo Sanader fired the interior and justice ministers and the country's police chief just hours after the mafia-style murder of a prominent lawyer's daughter. Ivana Hodak (26) was shot twice in the head on October 6. She was the daughter of Zvonimir Hodak, the lawyer for Vladimir Zagorec, the Croatian army general extradited from Austria on charges he stole $5 million (3.25 million euro) in jewels intended to fund Croatia's war effort in the early 1990s.

October also saw the double murder of Ivo Pukanic and Niko Franjic. Pukanic, publisher of Croatian weekly Nacional, and Franjic, the publication's marketing director, died in a car bomb explosion in Zagreb. On October 29, Croatia's justice minister told parliament that special courts would be set up to fast-track organised crime prosecutions, witness protection would be improved, and convicted criminals would have their property confiscated.

In November, Croatia's government, private sector and unions agreed on most of the terms of a "New Deal" for the country's economy embracing a range of tough measures to keep money in the country and ride out the global financial crisis, while Sanader said that Croatia needed no assistance from the International Monetary Fund.

In December, controversy hit Sanader after he ordered a probe into a Facebook group directed against him.

In other developments, 2008 saw Croatia legislate a public smoking ban, and in December, assume the temporary chairmanship of the UN Security Council.

GREECE
Heading for the end of 2008 with just a slim majority in parliament for his New Democracy party, prime minister Costas Karamanlis faced a succession of strikes and protests in numerous sectors, including over the plan for the restructuring of Olympic Airways. He lost cabinet ministers through the scandal over alleged illegal land deals at the Vatopedi monastery and saw the country's cities torn by riots over the fatal police shooting of a teenager in a clash with anarchists.

In mid-December, the president of the Hellenic Football Federation (HFF) Vassilis Gagatsis resigned from his post after allegations that he forged signatures to lend financial support to football clubs in northern Greece with which he had close ties.

Unemployment climbed past seven per cent and, in the context of the global financial crisis, was predicted to worsen.

Initial optimism from earlier in 2008 of a resolution of the conflict over Cyprus waned as the year ended, with even the new peace talks in September producing little more than a realisation that much remained to be achieved.

And the dispute between Athens and Skopje over the use of the name "Macedonia" dragged on unresolved, with Greece blocking Macedonia's Nato aspirations and indicating that it would do the same against its EU hopes unless the dispute could be brought to a conclusion.

KOSOVO
Depending on your point of view, on February 17 a new state was born, or it was not. Serbia, firmly backed by Russia, vehemently rejected Pristina's unilateral declaration of independence, while within days the United States and several European Union countries were quick to say that they recognised Kosovo's independence. Towards the end of 2008, Kosovo had been recognised by 53 UN member states, including in March, Bulgaria, Croatia and Hungary in simultaneous declarations.

Pledged unexpectedly large sums at an international donor conference, Kosovo seemed to remain not quite ready to take care of itself, as the UNMIK mission that had administered the territory made way at the end of the year for the EU's EULEX rule of law mission, which is to oversee the police, courts and customs service and help fight endemic organised crime and corruption.

Within the country, critics of the Kosovo government hit out at unfulfilled expectations of somewhat more universal recognition of statehood, while in October, Serbia succeeded in winning a UN resolution to refer the question of Kosovo's status to the International Court of Justice for a non-binding opinion.

MACEDONIA
Elections in June, marred by serious violence in ethnic Albanian areas, saw prime minister Nikola Gruevski returned to power on a promise to take the country on the road to membership of the EU. After the election, he swapped one ethnic Albanian party for another in his governing coalition, and then devoted much of his time to warring with Greece and with Macedonian president Branko Crvenkovski over Skopje's approach to the "name dispute".

Macedonia's already puny economy was hard hit by the global financial crisis, with its stock exchange plunging and with the year ending with the announcement by the Russian owner of Macedonia's only copper mine that production would be shut down because of falling prices and the global crisis.

Former prime minister Vlado Buckovski and the former chief of staff of Macedonia's army, Metodij Stamboliski, were sentenced in December to three and a half years each for the misuse of power in the illegal procurement of spare parts for T-55 tanks from the MZT company in late 2001. Buckovski was defence minister at the time.

Macedonia heads to the polls in 2009 for presidential and local elections, but even though some deride Gruevski as a populist in his approach to the name issue, it has helped him in the opinion polls and could strengthen his party's hand.

MONTENEGRO
As 2008 neared its end, Montenegro formally approved a decision to apply for European Union membership.

However, the same day - December 11 - the International Monetary Fund had warned Podgorica that there were looming problems with its public finances unless there was a major infusion of foreign direct investment. The government had already taken steps to ward off the global financial crisis, but the IMF warned that these would worsen Montenegro's deficit. It had already had a similar warning from the World Bank.

The same month saw a scandal over a 40 million euro loan given by the government to First Bank, which is controlled by prime minister Milo Djukanovic's brother.
In early December, Montenegro - along with Bosnia and Herzegovina - joined the Adriatic Charter of aspirant Nato members.

In April, Montenegro signed an agreement with the EU opening the way for World Trade Organisation membership.

Progress was made in talks with Serbia, with which Montenegro had been in a short-lived state union before seceding after a 2006 referendum, on the question of dual citizenship. The two former "partners" also had a falling out when, simultaneously with Macedonia, Montenegro angered Serbia by announcing recognition of Kosovo.

ROMANIA
Romanians went to the polls twice in 2008, in local elections and then at the end of November, in national elections that produced, amid low voter turnout that brought no clear winner, a centre-left coalition government headed by Emil Boc, leading a governing coalition of the Democrat-Liberal Party and the Social Democrats that given the two parties' antecedents in Romania's old order, made many observers fear for the prospects of eradicating networks linked to shady business deals and corruption.

One of the major impacts of the global financial crisis, the question of what would become of Renault's Romanian subsidiary Dacia was watched with anxiety as production was stopped and then restarted. Jobs were on the line as sales fell, with sales figures in October 2008 30 per cent lower than the same month the previous year.

Foreign investment fuelled economic growth, with GDP rising 9.1 per cent in Q3 2008 according to official statistics, but economists predicted a sharp slowdown in 2009.
In a story that entertained news desks around the world, Romanian education minister Cristian Adomnitei was fired in October 2008, supposedly for using an official helicopter to get to his wedding on time, although informally it was suggested that his departure was a settling of political scores. Also fired was Romania's police chief Gheorghe Papa, dismissed in October for allegedly misusing public funds by paying 58 000 euro each for 392 Dacia Logans fitted with special features including GPS and video systems. Papa denied the allegation, saying he had been following instructions from higher up.

SERBIA
The year 2008 was a time of "home and away" for Serbia's ambassadors, recalled from capitals of countries that recognised Kosovo as independent, and returned later after Belgrade felt that it had made its point. Coincidentally, just as Serbia made the decision to restore its ambassadors to countries from which they had been recalled, it expelled the Montenegrin and Macedonian ambassadors in October, a day after their respective governments announced recognition of Kosovo.

Time and again, representatives of major players in the EU denied that recognition of Kosovo by Serbia would smooth the path for Belgrade's EU hopes. Whatever the reality, there was a step forward in July with the arrest of former Bosnian Serb leader Radovan Karadzic, wanted for war crimes in the 1990s, although this on its own did not prove enough to persuade the EU to remove from the backburner the Stabilisation and Association Agreement that Serbia signed in April with the EU. The Netherlands in particular continued to demand that Serbia capture and hand over to the Hague war crimes tribunal Bosnian Serb general Ratko Mladic before any further steps towards the EU could be possible.

By mid-December, Serbia was continuing to insist that if it was presented with a choice between recognising Kosovo or losing its EU prospects, it would sacrifice European integration. The stance was repeated just a few weeks after Serbia said it would unilaterally implement a trade deal with the EU from January 2009.

TURKEY
One of the very few positive developments of the year for Turkey was a mild thawing in relations with Armenia in spite of the running sore that is the dispute over the Armenian genocide, with Turkish president Abdullah Gul paying a historic visit to Yerevan in September at the invitation of his counterpart Serzh Sargsyan.

After two years of political instability, Turkey got some clarity with a court decision that turned down an attempt to have the ruling Justice and Development (AK) party declared unlawful on the basis of a claim that it violated the secular precepts of the Turkish state. AK got away with a fine and a warning. The court ruling prompted European Enlargement Commissioner Olli Rehn to call on Ankara to push ahead with social and economic reforms towards EU standards. Turkey has been an EU candidate since 1999 and membership talks started in 2005.

In the latter half of 2008, Turkey was warned by the World Bank that the worsening economic situation could hamper its prospects of meeting its substantial foreign debt obligations.

Another court case that dominated the news in Turkey in 2008 was the start of proceedings against Ergenekon, allegedly a terrorist organisation, with retired generals, a newspaper editor, the leader of a minor nationalist party and a business person going up on charges of plotting to overthrow the government.