The EU promotes the Regional Economic Area in the Balkans

Serbia Balkan Summit 2017 jamnik

(European External Action, CC BY-NC)

The key topic of the fourth summit of Western Balkan countries was acceleration of work on the creation of a common market in that region. It would remove trade barriers and introduce uniform rules for entrepreneurs from various countries.

Representatives of the European Union and several EU member states participated in the summit, together with the prime ministers of six countries of the region with union ambitions, but which are at various stages in the discussions with the Brussels. These are Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Macedonia and Serbia. The question of creating a common market in the Western Balkans was discussed. Although all countries of the region are CEFTA (Central European Free Trade Agreement) members, it was not enough to remove all customs barriers.

The strengthening of economic cooperation between these countries is supported by the European Union and the European Bank for Reconstruction and Development (EBRD). They hope that it will lead to the strengthening of individual economies and bring them closer to the EU. This last argument is questionable, as enlargement of the European Union through the accession of the Balkan countries is not expected within the next several years. Although at the summit meeting in Thessaloniki in 2003 it was stated that “the future of the Balkans is within the European Union”, 14 years later it is hard to say now what that would mean.

The only states of the former Yugoslavia which joined the Union are Slovenia (2004) and Croatia (2013). The candidate countries are Albania, Montenegro, Serbia and Macedonia (that is the Former Yugoslav Republic of Macedonia). The latter has been waiting for its turn since 2005, but Greece will keep blocking the accession of its neighbor until the disputes between these countries are settled. The criteria for official application for accession were not met by Bosnia and Herzegovina and Kosovo.

The opinion poll company – the Gallup Institute – asked the citizens of the Western Balkans if they think that accession to the EU would be beneficial for their countries. The survey indicates that citizens of Kosovo and Albania are the biggest euro enthusiasts (respectively 84 per cent and 80 per cent claim that there are more benefits). As regards Bosnia and Herzegovina and Macedonia, almost 60 per cent of respondents see benefits, in Montenegro 49 per cent, and in Serbia only 40 per cent.

There will be more regional integration

The summit resulted in the signing of the Transport Community Treaty, which is thought to be an incentive to perform common infrastructure projects. The Union estimates that the initiative may result in investments worth EUR514m, which would come from private and EU funds. The treaty itself was discussed almost 10 years ago, and technical agreements were made in 2010, but due to an objection from Kosovo the case was frozen for the next several years. Therefore, the adoption of the treaty is a success and even the lack of signature of the Prime Minister of Bosnia and Herzegovina does not undermine it.

The parties committed themselves to continue their talks on creating a Regional Economic Area with the free flow of goods and services. The area would cover 20 million citizens. One common economic area instead of six small and weak countries should indeed be an incentive for foreign investors. EU experts calculated that 80 thousand new jobs could be created as a result of its full implementation, but in order to make it happen, the full harmonization of legislation and removal of all trade barriers is needed.

However, the will for such deep cooperation is not shared by all summit participants. Bosnia did not sign the “transport treaty” due to objections from the Russia-friendly Republic of Serbia, which is one of the Federation members. Bosnian Minister of Foreign Affairs criticized the Summit’s final provisions as a kind of poor substitute for membership in the European Union. In turn, the Prime Minister of Kosovo announced that his country would boycott the plans for creating the regional customs union in order not to lose customs revenue. The Minister of Foreign Affairs Enver Hoxhaj said that what had been discussed in Trieste was completely different from the arrangement made during the summit in February 2017.

The EU has to maintain its attractiveness

Johannes Hahn, EU Commissioner for European Neighborhood Policy and Enlargement Negotiations, stated that the Union does not set any, even approximate date of enlargement. He said that countries of the region would decide themselves on the pace of proceedings. Meanwhile, there is no doubt that Western Balkan countries do not meet accession requirements. High unemployment (reaching 40 per cent in Bosnia and Herzegovina and balancing between 20 and 23 per cent in Montenegro), a large grey market and corruption, and inefficient management at the national and regional levels are the reason why it is still a long way for them to meet all the requirements for candidate countries. However, if the state of limbo and uncertainty lasts for too long, other forces will come to the region and promise funds for less sacrifice. That help will not be for free, because in return they will ask for certain political concessions – and this is what the EU is trying to avoid at any cost.

In this respect, the European Union may make very generous promises to the Balkan countries in the coming months. The risk that these countries may attract the interest of Russia concerns mainly Serbia, where Russian influence is especially visible. The governments of both countries cooperate closely and the media traditionally portrays Russia as a close friend of Belgrade. This has led to a paradox: despite the fact that the greatest part of international aid to Serbia comes from the European Union, in public opinion it is Russia who is the greatest donor. In turn, growing Turkish influence is observed in Albania and Bosnia, which – taking into account the undemocratic processes taking place in that country – forces a stronger presence of the EU in these countries.

In this situation, the logic of the European Union is simple: it has to constantly promote stability in the Balkans because unrest in that region means unrest in the entire continent, as was the case several times in the past. Direct financial aid that reaches all six countries constitutes an important pillar for that concept, but of course not the only one. It is equally important to encourage these countries to implement their own common projects, for example related to transport. Maneuvering between the interests of neighbors who are to some extent hostile to each other requires the grace of a ballerina. For example, during the summit Albania and Kosovo raised concerns that they would be dominated by the stronger members of the Regional Economic Area (in fact, this referred to Serbia).


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