Page 80 - bne magazine July 2022_20220704

80 Opinion
bne July 2022
A number of variations on this concept have been floated but what they have in common is that the candidates get to share in some of the benefits of EU membership such as access to EU markets and more development funds, while progress towards full accession (and continued access to these benefits) remains contingent on reforms.
As the June 23 EU Council meeting approaches, at which critical decisions will be made not just for candidate states Albania and North Macedonia, but also for the three Eastern Partnership states, French President Emmanuel Macron
put forward the idea of a ‘political European community’.
This would create a “new space of political co-operation, of security, of co-operation in terms of energy, of transport and to invest in infrastructure” for the Western Balkan and Eastern Partnership countries to be part of a ‘political Europe’ while waiting for accession.
The potential for extending economic benefits to the aspirant states and various forms of staged accession were discussed on a webinar organised by the Vienna Institute for International Economic Studies (wiiw) on June 8. A new study from wiiw and Bertelsmann Stiftung, “The long way round: Lessons from EU-CEE for improving integration and development in the Western Balkans”, looks at the lessons from the EU accession process of the Central and Southeast European EU member states for the Western Balkan economies. It finds that EU accession has improved regional economic integration in the CEE member states. Trade in goods and services rose by 50%, while intraregional FDI inflows grew too, but more modestly.
“The main channel through which EU accession has enhanced regional economic integration has been the income channel. Higher GDP per capita in the region has increased demand for and the supply of products from the region, which in turn has increased intraregional trade and investment, and EU transfers appear to be one of the main determinants of the increase in income. In fact, doubling the annual EU transfers that a country receives results in an overall increase in its GDP of 14%,” said the report.
“These findings imply that the best way to foster regional economic integration and development in the Western Balkans would be through policies aimed at raising incomes, and that one way in which this can be achieved is by increasing EU transfers.”
The report recommends “the greatest possible integration of the Western Balkans into the EU, including through full access to the EU budget with the necessary conditionality attached. Even if full accession is still some way off, increasing regional economic integration and development would make the Western Balkan countries better able to meet the EU’s entry criteria. Moreover, it could also contribute to mitigating the region’s territorial and constitutional disputes, which also represent some of the main barriers to EU accession.”
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Slow convergence
wiiw economist Branimir Jovanovic argued on the panel that the "current engagement strategy for the Western Balkans has not been very successful, to put it mildly”, pointing to how long countries form the region have been waiting to join. North Macedonia applied back in 2004,
18 years ago, and other candidates applied 12-13 years ago and have no immediate prospects of joining. By contrast, all the CEE countries that joined the EU took less than 12 years from start to finish, and just eight years for Czechia and Slovakia.
Similarly, the convergence of incomes in the Western Balkans to EU levels has been very slow, said Jovanovic. While some CEE already incomes are around 90% of the EU average, those in the Western Balkans are only at 30-40%.
On the political side, according to Jovanovic, while the accession process is conditional on the states sorting out bilateral disputes – most notably the normalisation of relations between Serbia and Kosovo – they are largely left to sort these out for themselves. This has not been very successful either with Serbia and Kosovo or with North Macedonia’s disputes with first Greece and later Bulgaria.
While there have been many initiatives aimed at speeding up enlargement to the Western Balkans, these have failed, argued Jovanovic, because they have “conditioned EU accession on improving regional co-operation ...
“EU accession has improved the Balkan economic integration in the CEE member states. Trade in goods and services rose by 50%, while intraregional FDI inflows grew too, but more modestly”
and assumed that regional co-operation improves with regional economic integration.” However, he added, “the prerequisites for this have never been present in the Western Balkans”, listing institutional factors such as the rule of law and controlling corruption, as well as structural, political and economic factors.
Jovanovic argues in favour of increasing EU budget transfers to the region, which will have the effect of boosting regional trade and co-operation. The report indicates that doubling annual transfers from 1% to 2% of GDP leads to an overall increase in GDP of 14%. However, Jovanovic added, “Greater transfers should be accompanied by strict conditions for institutional reforms”, and he also stressed that the proposal is not a substitute for EU accession.