Page 10 - SE Outlook Regions 2023

mandate to Lekic. Early elections are now anticipated in March.

Progress on EU enlargement

EU enlargement is the common goal of the Western Balkan countries.
With the war in Ukraine giving EU members a prod to embrace
European countries outside the bloc, 2022 saw some of the biggest
progress on enlargement in recent years. Not only did Albania and
North Macedonia get the long-awaited nod to start accession talks, but
EU members also extended candidate status to Bosnia, Moldova and
Ukraine.

At the start of 2023, Croatia was admitted into both the Eurozone and
the Schengen area, overtaking Bulgaria and Romania, which joined the
EU six years earlier. Romania in particular plans to make a concerted
effort to secure Schengen membership in 2023.

Overall, however, less action on EU integration is expected in 2023.
North Macedonia’s government now has the politically difficult ask of
getting unpopular constitutional amendments through Parliament for the
country to progress with its accession talks. Meanwhile, of the two
frontrunners in the process, Serbia’s progress appears stymied by its
refusal to fall into line with EU foreign policy on Russia, and
Montenegro’s by its political instability.

Romania had a relatively calm year politically, but 2023 is expected see
the emergence of cracks in the grand coalition between the country’s
two largest parties, the National Liberal Party (PNL) and Social
Democratic Party (PSD). The first challenge will be the handover of the
prime minister position from the PNL to the PSD. After that, as the
super-election year of 2024 approaches, the two parties can be
expected to assert their differences as they art to woo the electorate.

Economic crisis

All this is happening against the backdrop of the economic crisis
caused by the war in Ukraine and related sanctions. The final months of
the year saw the start of a slowdown as rampant inflation took its toll on
companies and households.

For most of the region, growth continued relatively robustly in 2022,
albeit slower than during the rebound from the coronacrisis in 2021.
Three small Southeast European economies — Croatia, Montenegro
and Slovenia — appear to have clocked up some of the fastest growth
in the Emerging Europe area in 2022, helped by the recovery of
international tourism, even though by the end of the year their

10 SE Outlook 2023 www.intellinews.com