This spring on the occasion of Croatia’s progress toward EU membership, we recalled Javier Solana (EU’s High Representative on Foreign Policy until 2009) saying in 2008 that the “train for Brussels” is ready to leave. The first station since then will be Zagreb, the city that in July 2013 is to become the 28th EU capital. The crisis in the last couple of years increased concerns that the train may be stopped to prevent it from derailing later if boarded by risk countries. The sad experience with Greece provides enough reasons for scepticism toward accession of new countries (from the Western Balkans) to united Europe. On the other hand, if our neighbours would be left on their own big players, such as Russia, China and even Turkey, will rapidly notice the strategic opportunity and will also rapidly take advantage of it.
Do it or not, the consequences will be burdensome – this is probably the best summary of the EU’s dilemma with regard to its political behaviour in the region. Dr Dimitar Bechev, Director of the Sofia office of the European Council on Foreign Relations (ECFR), however, almost entirely neutralises its hopelessness in his analysis (originally in English) “The periphery of the periphery: the Western Balkans and the euro crisis”. In his opinion, the EU needs to change its approach in the relations with its potential member states. Instead of counting on political stabilisation through association, transformation could be achieved by focusing on economy. If Brussels manages to mobilise all existing resources and stress on growth, employment and competitiveness, EU’s attractiveness will grow and encourage reforms in the Western Balkans.
In turn, the above mentioned approach will prove that the investments of political capital in the region so far have been reasonable. Despite the negative effect of the crisis, the EU still enjoys considerable support in the region. In eurosceptic Croatia, for instance, where in January 2012 a referendum on EU membership was held, 2/3 of the citizens (the total turnout was 43% of the population) gave their vote in support of the membership. In Serbia, Macedonia and Montenegro, the public support has gone down by 15-20% but the pro-European camp continues to outweigh the opposition attitudes. According to Dr Bechev, those polls show “Eurorealism” rather than “Europhilia”. He adds that people on the Balkans perceive EU as something inevitable. And the reason is clear – the Balkans are already part of Europe (geographically and partly economically, if we are still not talking about political connectivity).
Trade and financial liberalisation between the two sides in this dialogue are almost finalised processes. In political terms, despite the widespread stagnation, 2012 can be assessed as successful in general for the bigger part of our western neighbours. Montenegro started accession negotiations on 29 June and expects the EU accession to become a fact in the next decade. Serbia got a candidate status as a recognition for its efforts to harmonise its relations with Kosovo. Being, however, closely scrutinised by Brussels because of this new quality, Belgrade now has to cope with three key challenges: to manage progress toward EU with its pro-Russian President Tomislav Nikolić and the shaky government coalition; to normalise its relations with Pristina; and to finalise its painful economic recovery under the auspices of the IMF.
Even the Western Balkan’s laggards - Bosnia and Herzegovina and Kosovo - have achieved some progress. Constitutional changes regarding the rules on electing Bosnia and Herzegovina’s tripartite presidency are proving hard to negotiate but moving closer to the EU is a valuable prize, particularly with regard to Sarajevo’s intention to apply for EU membership by the end of the year. Kosovo also succeeded in moving on in the last couple of months. Following the start of the visa liberalisation process in January, on 14 June the European Commission presented a roadmap for reforms that should lead to a full abolition of visas. The agreement between Pristina and Belgrade from February 2012 for joint management of border control is a new step on the way to the Stabilisation and Association Agreement (SAA) between the EU and Kosovo.
Under the initiative by Štefan Füle, the EU commissioner for enlargement, in March 2012 a high level accession dialogue with Macedonia has been established. The aim of the talks is to support the country’s efforts for key reforms in the judiciary and the administration that would help overcome Greece’s veto on the start of accession negotiations that was imposed despite the green light given by the Commission.
While until recently the European integration and the EU membership were associated with prosperity, in the last couple of years they mean also greater vulnerability. The problems encountered by the countries in the region are identical with those the southern EU member states encounter – high unemployment, low growth and low competitiveness. Currently, the support by the IMF and the EU tools, and thanks to the smaller size of our neighbours in the Western Balkans, the situation is manageable but not at all relaxed. According to some recent World Bank studies, the projected growth of the economies in the region for the current year is 1.1%. This is twice less than the 2011 growth rate of 2.2%. Serbia, Montenegro and Bosnia and Herzegovina are on the verge of recession with projected growth of 0.4% - 0.1% in 2012, combined with high debt.
Already in 2008–2009 Croatia suffered a sharp shrink of trade and decreased export volume. The country continues to be in recession for a another year in a row. The less export oriented economies in the region, due to their relatively smaller exports and limited investment flow saw the crisis develop with slower pace. The banking sector, however, is a most perilous channel to transfer the negative effects of the crisis from the other parts of Europe. Through their local subsidiaries, Greek and Italian banks control just less than half of the banking sector in the region.
Given the situation, Dimitar Bechev sees a need for continuing the enlargement process but under somewhat revised conditions. In his opinion, the “EU should offer the Western Balkans a deal: improved support for overcoming economic and institutional problems in return for stricter adherence to democratic norms and practises.” For Brussels this means to work with all countries in the region on key issues and agreements; particularly in prioritising stability; limiting the negative impact on Greece’s banking sector through co-operation with IMF and EBRD; undertaking measures and initiatives for growth support through investment in joint projects with Turkey (a member country of the Sarajevo-based Regional Cooperation Council); inclusion in the trade integration platform and particularly in that for the trade of services.
On the other hand, the efforts of the countries in the Western Balkans should be aimed at structural reforms. It is necessary that the candidates and the potential candidates for EU membership present their national strategies for the goals in key sectors such as employment policies, energy efficiency programmes, development programmes etc. Of particular importance is another remark by Dimitar Bechev pointing out at the image aspect in the relations between Brussels and the countries that aspire EU membership: “If the EU cannot deliver transformation in the Western Balkans – a region that many see as its backyard – how I can't expect other global players to see it as a credible actor in the Middle East, the post-Soviet space or East Asia?”. EU’s abdication from the Western Balkans, that would practically mean ceding influence opportunities in the region to China and Russia through the tools of business and politics, would mean a voluntary refusal to harvest the fruits that have been cultivated for long and nourished by huge resource investment.