Reviving the EU’s Western Balkans growth plan

The plan, launched in November 2023, aims to accelerate the socio-economic convergence of the region with the EU, extend some of the benefits of EU membership, and ultimately speed up the accession process.

It’s been an important week for the Western Balkans. On Monday, the European Bank for Reconstruction and Development (EBRD) hosted the sixth Western Balkans Investment Summit in London, where the bank made clear its support for the EU growth plan for the region, and at which the bank’s president, Odile Renaud-Basso, said that the plan could “bring forward some benefits of EU membership before accession”.

“This EU initiative has the potential to be a real game-changer in the region, providing new impetus for much-needed investments and reforms,” she told the heads of government from all six of the region’s would-be EU members (Albania, Bosnia and Herzegovina, North Macedonia, Kosovo, Montenegro, and Serbia).

The EU Growth Plan for the Western Balkans, published in November 2023, is based on four pillars, aimed at enhancing economic integration with the European Union’s single market, subject to the Western Balkans aligning with single market rules and opening the relevant sectors and areas to all their neighbours at the same time, in line with the Common Regional Market.

It is also aimed at boosting economic integration within the Western Balkans through the Common Regional Market, based on EU rules and standards; supporting the Western Balkans’ path towards EU membership; and improving sustainable economic growth including through attracting foreign investments and strengthening regional stability.

To incentivise reform, the plan includes six billion euros in conditional loans and grants through a new fund, of which at least 37 per cent must go towards climate action. Every eurocent, however, is tied to reform.

“Standards of public governance should be improved, by reforming state-owned enterprises, fighting corruption and leveraging digital technology. These reforms are key to instil trust, to protect economic stability and to attract foreign investments,” added Renaud-Basso.

On Tuesday, European Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi—who had also attended the EBRD event—travelled to Montenegro to continue discussions on key reforms needed in order to access funding under the growth plan.

“Montenegro is the most advanced candidate country in accession negotiations. We are all ready to close the interim standards, our goal is to take Montenegro to the next level,” Várhelyi said after meeting with Montenegrin President Jakov Milatović.

So far, out of a total of 35 negotiation chapters, Montenegro has opened 33 but has provisionally closed just three.

‘An opportunity not to be missed’

From Montenegro, Várhelyi flew to the Albanian capital Tirana for a summit dedicated to the growth plan, where he told leaders to “move quickly” to complete the reforms the EU has asked for.

“You must apply EU rules and you can become part of the European market even before you become a member of the EU,” Várhelyi said, adding that if fully implemented, it can help the six economies double in size.

“We are at the beginnings of a very fundamental, but also very rapid change in the Western Balkans,” he said.

Summit host, Albanian Prime Minister Edi Rama, said that the growth plan was an opportunity that should not be missed.

“This out-of-the box plan represents not only recognition from the EU of our decade-long efforts to build a common future against the savage winds of the past, but also challenges us to demonstrate our readiness for a shared European destiny,” he said

Serbian President Aleksandar Vučić said that the growth plan will enable these countries to additionally benefit from closer cooperation within the region itself and with the European Union.

“This brings us closer to a market of over 400 million consumers, with access to a greater number of suppliers of goods and services, lower production costs and simpler trading methods,” he said.

Western Balkans support for Ukraine

Ahead of the summit, Rama hosted a separate event with Ukrainian President Volodymyr Zelensky designed to encourage further support for Kyiv from the countries of the Western Balkans and wider South East Europe region.

For his Albanian host, Zelensky was effusive in his praise.

“Since the first days of the full-scale invasion, Albania has supported Ukraine, our struggle for freedom and territorial integrity. We will also never forget the warm attitude of your society towards Ukrainians who were forced to leave their homes because of the war,” Zelensky said.

Not all the Western Balkans countries have fallen in behind Ukraine in its war against Russia. Serbia for example remains the only European country that has refused to align with EU sanctions against Moscow, and was this week reported to be cracking down on Russian pro-democracy activists who have sought refuge in the country.

However, Serbia’s President Vučić signed a joint declaration at the end of the event which called for, “the entire international community to strongly increase support for Ukraine in its ongoing struggle for freedom, independence, and territorial integrity”.

Zelensky also used the Tirana event to promote the idea of joint arms production. “We are interested in co-production with you and all our partners,” Zelensky told leaders from Albania, Bulgaria, Serbia, North Macedonia, Kosovo, Bosnia and Herzegovina, Montenegro, Croatia, Moldova and Romania.

“There are about 500 defence companies operating in Ukraine, each of them adds strength but it is not enough to win. We see the problems with the supply of ammunition, which affects the situation on the battlefield.”

Photo by Árpád Czapp on Unsplash.

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