WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

by Vladimir Gligorov and Mario Holzner
photo: Federica Mogherini, Johannes Hahn; European External Action Service, CC-BY-NC-ND-2.0.

• Today, the European Commission announced a new strategy for Western Balkan accession to the bloc.
• The Commission has put significant focus on two key areas: the resolution of outstanding security issues in the region, and the strengthening of the rule of law.
• This represents a change of focus from Brussels. Whereas previously the EU had assumed that improving economic connectivity would automatically bring about political cooperation, the approach now recognises that these two issues must progress together, and that sometimes the politics has to come first.
• Broadly, this also represents more of an interventionist strategy than previously; the EU is pushing for major changes in state-building and bilateral and regional cooperation.
• These moves are broadly positive, and a greater EU role in mediating regional conflicts is likely to increase the chances of a resolution. However, alone they will not be enough to ensure speedy EU accession for the Western Balkan states, as it remains to be seen to what instruments the bloc will be able to use to achieve its aims.
• An indicative target of 2025 has been set for EU accession, although this will be too ambitious for most if not all. The key to the whole region is Serbia, and an advance in membership talks could be positive for all.

Today, European enlargement chief Johannes Hahn and foreign policy head Federica Mogherini presented a plan to help Western Balkan countries move toward membership. There were two main messages. First, that all outstanding security issues must be resolved not just before accession, but in effect before negotiations get fully underway. This means that legally binding agreements must be signed to settle outstanding disputes, including (but not limited to) those between Serbia and Kosovo, and Macedonia and Greece. In addition, all outstanding border issues should be referred to the Arbitrage Court with the commitment to implement their decision (this is a lesson learned from the Slovenia and Croatia case).

The second condition is that the rule of law needs to be not just strengthened, but in effect introduced. The countries are portrayed by the European Commission as failed and captured states. Criminalisation and political control of the economy have been identified as particular issues.

An acknowledgement that economic connectivity alone is not the answer

The new Commission strategy represents a welcome change of tack, and effectively an abandonment of the idea that economic progress will solve tricky political issues. Until now, the EU’s approach to the Western Balkans has largely been based on the idea that more economic connectivity would lead to more political cooperation. The EU had hoped that more and better connectivity within the region, as well as with neighbouring EU countries, could be achieved primarily by two means. First, it was hoped that trade liberalisation with the EU as well as within the region’s CEFTA free trade agreement (and potentially a future regional customs union and common market) would increase the trade of goods and services, and attract foreign direct investment (FDI), thereby increasing productive capacity. Second, EU co-financed infrastructure investment in the transport and energy sector connecting the region internally and externally would facilitate trade flows, and act as an additional attraction for FDI. Both types of connectivity, in turn, should then lead to more regional cooperation among the Western Balkan states, which is a basic prerequisite for an EU accession.

The EU now appears to have come to the pragmatic conclusion that economic connectivity and political cooperation in the Western Balkans have to go hand in hand. Moreover, in many cases the sequencing has to be reversed; the prospect of improved infrastructure in return for stronger intra-regional cooperation could be a powerful incentive. The EU has begun to intervene as an active mediator as in the ‘Brussels Process’ for the normalisation of the relationship between Serbia and Kosovo. This mediation process is difficult and lengthy. Nevertheless, certain solutions have been achieved which have a positive impact on the connectivity between the two countries.

Integration with the near abroad should not be ignored

While this change of approach should be welcomed, the EU could still do much more to speed up the Western Balkan accession process. Most importantly, a similar EU-facilitated dialogue would be desirable for the relationships of the Western Balkan countries with their EU neighbours—Greece, Bulgaria, Romania, Hungary and Croatia—where outstanding disputes exist, and in some cases are more problematic than issues within the region (such as the name dispute between Greece and Macedonia). An improvement of the political and economic ties on the entire Balkan peninsula would serve all countries well and would also be positive for the EU.

The two holders of the EU’s rotating presidency this year, Bulgaria and Austria, both have a strong focus on the region, which provides reason for optimism. The current EU presidency of Bulgaria has declared the Western Balkans to be one of their four priorities, although in general Sofia’s strategy follows the old EU logical with a focus on greater economic connectivity driving an improvement in political relations. In July Austria will take over the EU presidency, and it is likely that Vienna will also have the Western Balkans as one of its priorities. It would be wise for this to be part of a broader Southeast Europe strategy, rather than a narrower focus on just the Western Balkans 6.

A long road to accession

No matter what happens from here, the Western Balkan countries continue to face a long road to accession. In terms of sequencing, Serbia and Montenegro are seen as joining in 2025, Macedonia and Albania are expected to start negotiating next year, and Bosnia and Hercegovina is seen as advancing to candidate country status (with negotiations set to start in 2019). Kosovo is only expected to implement its Stabilisation and Association Agreement, and is not specifically mentioned as a possible candidate for EU membership in the EU plan for the Western Balkans. Aside from technical issues and relations with Serbia, political considerations from outside the region mean that Kosovo remains a special case; reportedly Spain objected to Kosovo being included in the Commission strategy at all.

The key question now is which means the EU has to drive political reconciliation in the region and thereby move the Western Balkan countries towards EU membership. Clearly, the EU needs to get involved in the Greece-Macedonia dispute and it also needs to find more direct instruments to influence Serbia and Kosovo. In the case of Bosnia and Herzegovina, a more constructive stance from Serbia would be more significant than any internal political development. The Kosovo issue looks more intractable, and may become a new Macedonia-type problem given Spain’s refusal to support a secessionist state.