The European Union is intensifying its focus on the Western Balkans with a comprehensive Growth Plan, aiming to accelerate economic convergence and deepen integration with the EU’s single market. This initiative seeks to provide tangible benefits of EU membership to the region ahead of full accession, fostering stability and prosperity amidst geopolitical challenges.
Key Takeaways
- The Growth Plan aims to integrate the Western Balkans into the EU’s single market, boost regional economic cooperation, and deepen EU-related reforms.
- A €6 billion Reform and Growth Facility for the Western Balkans is established for 2024-2027, comprising grants and concessional loans tied to reform implementation.
- The plan incentivizes pre-accession preparations by offering early benefits, potentially doubling the size of Western Balkan economies within a decade.
- Challenges include the enforceability of strict conditionality for fund disbursement and the overall financial support compared to previous EU member states.
Pillars of the Growth Plan
The Growth Plan is structured around four key pillars designed to drive socio-economic convergence and EU integration:
- Enhanced Economic Integration with the EU Single Market: This involves seven priority actions, including free movement of goods and services, access to the Single Euro Payments Area (SEPA), facilitation of road transport, energy market integration, a digital single market, and integration into industrial supply chains.
- Boosting Regional Economic Integration: This pillar focuses on strengthening the Common Regional Market, based on EU rules and standards, to overcome fragmented markets, enhance business competitiveness, attract investors, and retain workers.
- Accelerating Fundamental Reforms: Beneficiary countries are required to prepare and implement a Reform Agenda, approved by the Commission, to support their path towards EU membership, improve sustainable economic growth, attract foreign investment, and strengthen regional stability.
- Increased Financial Assistance: The Reform and Growth Facility provides €6 billion for 2024-2027, reinforcing existing financial assistance under IPA III. Disbursements are conditional on the implementation of specific socio-economic and fundamental reforms.
Driving Private Investment and Future Steps
To further stimulate economic growth and EU integration, the EU has launched a Call for Expressions of Interest to mobilize private investments in priority areas such as the green transition, integration into EU industrial supply chains, critical raw materials, sustainable transport, digital transition, and sustainable tourism. Projects must meet a minimum threshold of €10 million. Commissioner Marta Kos emphasized the transformative potential of these investments, inviting private companies to participate in shaping the region’s future. The plan also involves leaders meeting to discuss progress and next steps, with Reform Agendas from key countries expected to be approved by October 2024.
Sources
- Growth Plan for the Western Balkans, Enlargement and Eastern Neighbourhood.
- The European Union Growth Plan for the Western Balkans: A reality test for EU enlargement, Atlantic Council.
- Commissioner Kos meets with Western Balkans leaders to promote growth in the region, Enlargement and Eastern Neighbourhood.
- What the EU’s Growth Plan for the Western Balkans means for the region, Atlantic Council.
- EU launches Call for private investment in the Western Balkans to drive economic growth and boost EU
integration, Enlargement and Eastern Neighbourhood.
