Balkans in the EU, towards a gradual integration?

Stimulating convergence with EU countries, creating a regional common market and proceeding with sectoral integration in the European single market are among the objectives of the European Union's renewed engagement with the Western Balkan countries. But the path remains uphill

In the last three months of the year that just ended, there were multiple occasions of meetings between the six leaders of the Western Balkan countries and representatives of the EU and its member states. Highlights included the Berlin Process summit held in Tirana last October and the EU-Western Balkans summit organised at the margins of the European Council in mid-December in Brussels.

Faced with the economic impact of Russia's aggression against Ukraine and the consequences of the pandemic crisis, the European political agenda relies on the new growth plan for the Western Balkans, desired by Commission President Ursula Von der Leyen and officially presented for approval to the European decision-making institutions last 9 November. The plan aims to foster socio-economic convergence between the countries of the region and the Union, and to balance the fact that the European integration process did not make any significant political progress during 2023.

What does the new growth plan foresee?

The level of economic convergence of the countries of the region is currently estimated to be between 30% and 50% of the EU average, in terms of gross domestic product: at this rate, it will take several decades to narrow the gap with the member countries.

Against this backdrop, the EU is committed to introducing a new financial instrument for the implementation of a convergence-focused reform agenda in the region. The growth plan aims at greater economic integration between the countries of the region and the EU, the implementation of fundamental reforms and increased financial assistance.

The countries of the region are asked to draw up a programme of reforms in the area of socio-economic convergence, which will be then examined and approved by the Commission. The procedures foreseen by the plan are aligned with the national recovery and resilience plans envisaged for the EU member states.

50% of the available budget is allocated on transport and energy connectivity, green and digital transition, and education and skills development, areas that are considered multipliers for economic development. The infrastructure investments will be managed through the Western Balkans Investment Framework (WBIF), an instrument already in use under the Berlin Process.

The resources made available amount to  6 billion Euros for the period 2024-2027, including 2 billion Euros in grants and the rest in soft loans provided by the EU. The allocation of resources for each country is based on population (60%) and GDP per capita (40%).

The support provided by the growth plan will complement the funds made available by the existing pre-accession instrument (IPA III), which aims at aligning national legislation with the acquis in view of the prospective EU membership. The two instruments will be implemented separately, while ensuring synergies between them.

A more gradual integration

Over the past two years, the EU initiatives promoting a gradual integration of the Balkan countries into the Union have multiplied, moving the prospect of membership further away.

The European Council of June 2022 invited the Commission , the Council and the High Representative to move forward towards the integration of these countries, on the understanding that the accession process remains reversible and merit-based.

In this perspective, the six Balkan countries already committed themselves as of 2017 - in the frame of the Berlin Process - to work towards the creation of a regional economic area, with the creation of a regional economic market based on the principles of free movement of goods, capital, services and people, following the example of the European single market. With the advancement of regional economic cooperation based on EU rules and standards, the countries of the Western Balkans will have the opportunity to join specific sectors operating within the single market, thus enjoying the benefits of partial integration before becoming EU members.

For its part, the Council committed last December to considering proposals that enhance gradual integration, including further strengthening of sectoral cooperation between the Balkans and the EU. In this context, the new growth plan would contribute to the gradual cooperation and integration of the economies of the region, as a preparatory measure for subsequent integration with the single market.

The issue of bilateral disputes

Formally, gradual integration should act as an incentive for the advancement of reforms in the Balkan countries, but the situation on the ground is complicated by the constant presence of bilateral disputes both between the countries of the region and with some EU member states.

The Council ties the implementation of the new growth plan and the related disbursement of funds to strict pre-conditionality and to the requirement that no Western Balkan country blocks the advancement process of another country of the region to the single market. Each country in any case remains free to temporarily or permanently suspend its own advancement within the regional economic market and related sectoral access to the European single market.

A specific clause is foreseen for relations between Serbia and Kosovo. The parties must demonstrate a constructive commitment to the normalisation of relations so that the obligations arising from this new financial instrument can be implemented. The ultimate goal remains the start of negotiations for a comprehensive agreement on the normalisation of relations.

What remains to be clarified, however, is the weight of the veto power of the EU member states against the advancement of the Balkan countries. 

At the moment, both Albania and North Macedonia are on hold in their accession negotiations with the EU precisely because of the vetoes imposed respectively by Greece and Bulgaria. While Skopje is set to hold its parliamentary and presidential elections in mid-spring, the results may not affect the Constitutional reform imposed by Bulgaria's veto. The relations between Albania and Greece appear even more uncertain, considering the time required for the conclusion of the trial of the ethnic-Greek mayor-elect Alfred Beleri currently in prison.

Hungary's use of the veto in the main European institutions is equally significant. On 15 December, Hungarian President Viktor Orban suspended the process of reviewing the Union's seven-year budget because he was against the allocation of further financial aid to Ukraine.

The temporary blockage of the European seven-year budget review process has adversely affected the timing of the launch of the Western Balkans Growth Plan, because the funds made available by the plan are dependent on the review of the EU budget itself.