EU unveils €6 billion growth plan for Western Balkans

Today, the European Commission adopted a new growth plan for the Western Balkans, aiming to bring to the region some of the benefits of membership before accession, boost economic growth and accelerate essential socio-economic convergence. The aim should be to enable partners to step up reforms and investments in order to significantly accelerate the enlargement process and the growth of their economies. To this end, a new €6 billion 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.

The new growth plan for the Western Balkans is based on four pillars aimed at:

1. Strengthen economic integration with the European Union single market, subject to the Western Balkans aligning themselves with the rules of the single market and simultaneously opening the relevant sectors and areas to all their neighbors in accordance with the regional common market. Seven priority actions are proposed:

1. Free movement of goods;

2. Free movement of services and workers;

3. Access to the Single Euro Payments Area (SEPA);

4. Facilitation of road transport;

5. Integration and decarbonization of energy markets;

6. Digital single market;

7. Integration into industrial supply chains

2. Boost economic integration within the Western Balkans through the regional common market, based on EU rules and standards, which could potentially add 10% to their economies;
3. Accelerate fundamental reforms, particularly on the fundamental aspect, support the Western Balkans’ path towards EU membership, improve sustainable economic growth, in particular by attracting foreign investment and strengthening regional stability;
4. Increasing financial aid to support reforms through a Reform and Growth Facility for the Western Balkans for the period 2024-2027, a proposal for a new instrument worth 6 billion euros, consisting of 2 billion €4 billion in grants and €4 billion in concessional loans, with payment conditional on Western Balkan partners implementing specific socio-economic and fundamental reforms.

As part of the growth plan, each Western Balkan partner 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, evaluated and adopted by the Commission.

European Commission President Ursula von der Leyen said: “With today’s adoption of the new €6 billion growth plan for the Western Balkans, we are bringing the economies of the Western Balkans closer to the EU . The potential of this growth plan 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, this 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.”

Next steps

It is now up to the European Parliament and the Council to examine the proposal for the Facility as part of the MFF mid-term review programme. Once adopted, the six Western Balkan partners will be invited to submit their individual reform programs outlining the socio-economic and fundamental reforms they will undertake to boost growth and convergence under the Growth Plan over the period. 2024-2027. Serbia and Kosovo must constructively engage in the EU-facilitated dialogue on normalization of relations, led by the High Representative, as a necessary precondition.

Background

Economic convergence is an essential element in bringing the Western Balkan countries closer to the EU. Currently, the level of convergence between the Western Balkans partners and the EU is not progressing fast enough, with the average GDP per capita in purchasing power of our Western Balkans partners lying between 30 and 50% of the EU average. 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.