* Berlin joins Washington in warning NATO ally Albania
* Uptick in nationalist rhetoric ahead of June election
* Hard-won Balkan peace still fragile
By Benet Koleka
TIRANA, Feb 22 (Reuters) - Germany joined the United States on Friday in telling Albania to stop fanning nationalist sentiment in the Balkans, and said borders between the region's ethnic Albanians would become irrelevant within the European Union.
Washington issued a blunt missive to NATO ally Tirana last week warning that nationalist rhetoric in the run-up to a June election risked destabilising a hard-won but still fragile peace in the region.
Over two million ethnic Albanians live among Albania's Balkan neighbours. Using the carrot of eventual EU accession, the West quelled ethnic Albanian insurgencies in southern Serbia and Macedonia in the wake of a 1998-99 war in majority-Albanian Kosovo, then a province of Serbia.
But integration has been slow and dissatisfaction remains high among ethnic Albanians over poverty and unemployment. For most, EU accession remains at least a decade away.
Albanian Prime Minister Sali Berisha, facing a close-run parliamentary election on June 23 and a challenge from emerging hardline nationalists, has veered increasingly to the nationalist right.
"Nationalist emotions and feelings should be treated very carefully, especially during election campaigns," German Foreign Minister Guido Westerwelle told a news conference during a visit to the Albanian capital.
"The changes of borders are not allowed even in the Balkans," he said. "We think borders in Europe are neither removed nor avoided or changed, they just lose their importance," he said through a translator.
Croatia is set to become the EU's 28th member on July 1. But its fellow former Yugoslav republics, and Albania, are still dogged by struggling economies, rampant crime and corruption and weak governance.
The West fears that deepening discontent in places like Macedonia could reignite violence, just as the EU pursues a delicate rapprochement between Serbia and its former Kosovo province.
Analysts say the rise in nationalist sentiment followed Kosovo's 2008 secession from Serbia, which was backed by the West. According to some polls, Albania's nationalist Red and Black Alliance could take third place in the June election on a platform that calls for the unification of Albania and Kosovo.
Celebrating 100 years of Albanian independence in November, Berisha referred to towns in Macedonia, Greece, Serbia and Montenegro as "Albanian lands", and last month hailed Albanian ex-guerrillas in Serbia as "heroes of the Albanian nation."
A U.S. State Department memo, leaked to Albanian media last week, warned such comments could "erode peace and stability". It told Tirana to "stay out of the affairs of Serbia".
U.S. Deputy Assistant Secretary of State Philip Reeker drove home the point on Thursday on Albanian television.
"Borders and boundaries are set, and the U.S. is firmly against any changes of borders, so calls to unify Albanians or calls to unify groups based on ethnicity or nationality are counterproductive," he told an interviewer.
"It concerns us, it concerns our European friends, and it should be of concern to everyone."
At a joint press conference with Westerwelle, Albanian Foreign Minister Edmond Panariti insisted Tirana was a force for stability. "It has not, does not and will not have any territorial claims towards its neighbours," he said. (Writing by Matt Robinson; Editing by Sonya Hepinstall)