A new EU growth agenda for the Western Balkans links cash disbursements to social and economic reforms. No reform, no money, EU chiefs say.
The European Commission adopted a new growth plan for the Western Balkans last week, aiming to bring some of the benefits of membership to the region ahead of accession, boost economic growth and accelerate convergence socio-economic essential.
The Commission says the aim should be to enable partners to accelerate reforms and investments in order to significantly accelerate the enlargement process and the growth of their economies.
To this end, a new six billion euro Reform and Growth Facility for the Western Balkans has been proposed for the period 2024-2027. Payments will only take place after the agreed reforms are implemented.
“With the adoption of the new growth plan for the Western Balkans, we are bringing the economies of the Western Balkans closer to the EU,” said European Commission President Ursula von der Leyen.
“The potential is extraordinary. This growth plan could double the economy of the Western Balkans over the next ten years. Through its combination of reforms and investments, it will enable the Western Balkans to soon benefit from key areas of our single market, including the free movement of goods, services and workers, the single euro payments area, transport, energy and the digital single market. »
No reform, no money
The new growth plan is based on four pillars, aiming to strengthen economic integration with the European Union single market, subject to the Western Balkans aligning with single market rules and simultaneously opening up relevant sectors and areas to all their neighbors, in accordance with the Common Regional Market.
It also aims to boost economic integration within the Western Balkans through the regional common market, based on EU rules and standards, which could potentially add 10 percent to their economies, and to accelerate fundamental reforms, by supporting the Western Balkans’ path towards EU membership. , improving sustainable economic growth, notably by attracting foreign investment and strengthening regional stability.
The fourth pillar provides for an increase in financial assistance to support reforms through the Western Balkans Reform and Growth Facility for the period 2024-2027, with payment conditional on implementation by partners of the Western Balkans specific socio-economic and fundamental reforms.
As part of the growth plan, the six Western Balkan countries will be asked to prepare a reform program based on existing recommendations, including those from the annual enlargement package and the countries’ Economic Reform Programs (ERPs). This reform program will be consulted, then evaluated and adopted by the Commission.
Accelerate convergence
Economic convergence is an essential element in bringing the Western Balkan countries closer to the EU. Currently, the level of convergence between the Western Balkan partners and the EU is not progressing fast enough, with the average GDP per capita in purchasing power of our Western Balkan partners lying between 30 and 50 percent of the average of the EU.
Integration into the EU single market has been the main driver of economic growth for all countries that have joined the EU. The positive impact of integration into the EU single market on a country’s GDP and income levels has been clearly demonstrated in the past.
“The new growth plan for the Western Balkans and the new Reform and Growth Facility build on the €30 billion Economic and Investment Plan (EIP) successfully launched in 2020,” said Olivér Várhelyi , Commissioner for Neighborhood and Enlargement.
“Our new growth plan is a unique catalyst to accelerate true socio-economic integration in the region. As we accelerate the implementation of fundamental reforms, we will open our single market to the Western Balkans. This will narrow the economic gap between the European Union and our partners and prepare them for competition in the EU single market so that they can reap the benefits of EU membership from the first moment.”
Josep Borrell, high representative of the European Union for foreign affairs and security policy, believes that the plan can help Serbia and Kosovo normalize their relations, encouraging them to make progress in fundamental reforms and socio-economic aspects.
“This offer can accelerate progress on the path to normalization of relations between Kosovo and Serbia through EU-facilitated dialogue,” he said. “Each of our partners in the Western Balkans has the opportunity to boost economic growth and ultimately access the European single market, even before enlargement. »
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