bne IntelliNews – ‘You reform, we invest’ is European Commission president’s message for Western Balkans

A common theme of the discussions between European Commission President Ursula von der Leyen and leaders of the Western Balkan states during her tour of the region this week was that reforms by the EU-aspiring states will pay off in the form of investments by the EU. 

Von der Leyen’s tour of the Western Balkans took place just two weeks after the Berlin Process summit in the Albanian capital Tirana on October 17, at which she unveiled the New Growth Plan for the Western Balkans, a €6bn initiative aimed at fast-tracking the economic integration of the Western Balkans. 

The plan, comprising €2bn in grants and €4bn in loans, focuses on enhancing the economic ties of the region before pursuing political integration. By doing so, the Western Balkans stand to gain various privileges, including the freedom to trade goods and services and participate in sectors such as transportation, energy networks and digital technologies.

However, as repeatedly stressed by von der Leyen as she visited five of the six capitals this week, the disbursement of this financial aid is contingent upon the recipient countries implementing crucial reforms. 

Visiting Montenegro on October 31, von der Leyen noted that the EU already used the “principle of investment and reforms” within the European Union with NextGenerationEU. “[I]t worked excellently. Therefore, we want to apply the same principle for our Western Balkan countries: investment comes with reforms.”

“If you do the reforms, we come with investment,” she said at a press conference alongside President Aleksandar Vucic in Belgrade the same day. 

Many of the examples of required reforms include improving the business climate, pursuing the green transition and digitisation. However, in Serbia she also described the EU-facilitated dialogue between Serbia and Kosovo as “the only way forward” and “a good way to access the Growth Plan”. 

Financial incentives 

Further details of the New Growth Plan, based on four pillars, were forthcoming during the visit.

The first pillar involves the EU granting the Western Balkans access to seven pivotal sectors of the European Single Market.

The second entails the Western Balkan nations opening their borders to neighbouring countries and establishing the Common Regional Market.

The third element is the need for reforms once the Single Market is opened and the Common Regional Market is established in the Western Balkans, in order to create a fair and equitable playing field. 

The fourth pillar is the support the EU will extend to help the Western Balkans make those changes.

Von der Leyen also detailed some of the financial benefits the region has already received, such as through the €30bn Investment Plan for the Western Balkans. Projects that have benefitted from funding include the Kostolac Wind Farm, Serbia-Bulgaria gas interconnector, Railway Corridor X. In Pristina, the European Commission noted the €75mn help extended during the “enormous, severe energy crisis” last year. 

Tricky reforms 

But while von der Leyen dangled the carrot of investment, she also stressed the need for reforms if countries from the region are to benefit. The reforms required and how politically difficult they are vary widely between countries. 

Montenegro, currently the most advanced of the accession candidates and with hopes of joining the EU by the end of this decade, needs to reactivate its reforms that were long stalled amid political instability and the failure until now to form a new government after the June general election. (Prime Minister Milojko Spajic’s new government was endorsed by the parliament less than two hours before his meeting with von der Leyen on October 31.)

In Bosnia, von der Leyen praised the progress by the current government during its first year in office, but stressed that the EU “cannot accept is a backsliding on our common values, or divisions, in any part of your country”. What is now required is “resolute progress” on the 14 key priorities set out when Bosnia was granted candidate status. They are intended to strengthen the rule of law, the fight against corruption and organised crime, migration management and fundamental rights.

There are challenges for North Macedonia too. Skopje is required to make changes to the constitution to include ethnic Bulgarians, a demand made by EU member Bulgaria. This is politically difficult, not least because the country already took the step of changing its name to persuade Greece to unblock its EU accession process. Now, if it is to advance in accession negotiations, the government in Skopje must persuade opposition MPs to back the constitutional changes in order to achieve the required two-thirds majority in parliament.  

Normalisation required 

Serbia and Kosovo, which unilaterally declared independence from Belgrade in 2008, have the even more difficult hurdle to overcome of normalising their relations. The two sides came close to a deal earlier this year, but it was not signed and since then relations deteriorated over the summer that saw a series of violent incidents in northern Kosovo. 

Top officials from EU institutions and influential member states have been putting their efforts into finding a solution and bringing the two sides to the negotiating table. 

Leaders from Germany, France, Italy, and key EU officials jointly urged Serbia on October 27 to take significant steps towards de facto recognition of Kosovo. Additionally, they called on Pristina to move forward with the establishment of the Association of Serbian Municipalities in northern Kosovo. This message was reiterated by von der Leyen during her visits to the two countries’ capitals. 

Focus on enlargement 

On a more positive note, von der Leyen assured politicians from the Western Balkans that the EU’s focus is still very much on enlargement. 

“[T]here is a true momentum now, all over the European Union and those countries who want to join the European Union, for the enlargement process. So, it is important to seize that moment,” she said during the first leg of her tour in Skopje. 

“Basically, the first message is: Enlargement is at the top of the agenda of the European Union. It is a time of global turbulences, so we must strengthen the unity and the security of our continent. And enlargement is the way to do it,” she went on to affirm in Belgrade. 

The European Commission president’s visit took place shortly before the release of the Commission’s latest set of enlargement progress reports covering candidate states from the Western Balkans and the broader region that are expected to be published in early November.