Vienna Economic Talks Belgrade Meeting will be organized on May 21-22 under patronage of Jean-Claude Juncker, President of the European Commission. On this occasion we spoke to Dubravka Nègre, Head of European Investment Bank Regional Representation to Serbia and for the Western Balkans.
European Western Balkans: As the EIB is an EU’s institution, how would you asses the integration process of the Western Balkans? Why it is important for those countries to continue their EU paths?
Dubravka Nègre: All the countries of the Western Balkans are part of the EU integration process. Albania, Montenegro, Serbia, the former Yugoslav Republic of Macedonia are official candidates. Accession negotiations and chapters have been opened with Montenegro and Serbia. Bosnia and Herzegovina and Kosovo* are potential candidate countries. All the countries of the region are committed to integrating into the European Union and have declared it as their strategic goal. The efforts of their institutions are focused at meeting the criteria in order to achieve this objective.
The EU aims to promote peace, stability and economic development in the Western Balkans and open up the prospect of EU integration. These countries’ membership in the EU would provide a chance to become part of a community that aims to advance peace through economic, political and cultural co-operation between member states.
EWB: You will participate at the Vienna Economic Talks in Belgrade this Sunday. You are one of the discussants at the session titled “The Responsibility to Be Regionally Connected”. Speaking about it, a great part of the Berlin Process is tackling the regional connectivity. What is the role of the EIB regarding this issue? What are the major projects supported in the region and why are they important?
DN: EIB is supporting the Connectivity Agenda and we already have several projects signed in the road and rail sectors starting to be implemented in Montenegro and Bosnia. We are working on appraising new projects in Serbia and Bosnia-Hercegovina in rail, road and energy sectors. All these projects will contribute to connect people and countries of the Western Balkans and with the Member States, and are very important from the connectivity and regional cooperation point of view which are also important for the EU integration process.
EWB: Are the Western Balkan countries using the EIB’s support enough? What are their key challenges for using it more?
DN: Well-designed infrastructure is essential for the success of a competitive modern economy. Infrastructure development in transportation, communication, water, and energy networks can raise countries’ productivity, foster economic growth and consequently improve living standards. The accessibility and quality of infrastructure determines countries’ attractiveness to foreign investors. To that end, the continuation of building up infrastructure in the Western Balkans, such as transport, energy, municipal infrastructure, health and education are all equally important.
The EIB’s support to the region started more than 15 years ago and today we are one of the largest lenders to Western Balkan economies with close to EUR 9 billion of committed financing. EIB is financing the construction of motorways and by-passes, rehabilitating the road and railway networks, refurbishing and building of new schools, hospitals, municipal infrastructure, modernizing energy networks, as well as providing much needed financial support to local SMEs which are the backbone of these economies. Significant funding has already been channeled into those sectors and we still have numerous ongoing projects where funds are to be released.
In the future, we intend to widen further our lending activities to sectors such as renewable energy and energy efficiency and the environment which have a positive impact on climate change and Western Balkan countries’ further economic and social development. Better project preparation and project management are some of the areas for improvement which we are successfully addressing with our partners.
EWB: At the EIB’s website it is stated that “EIB plans to increase its assistance to the private sector (in the Western Balkans) and lend more in the health and education sectors in the coming years”. Does that mean it will support SMEs in the region, and if so, how it will do it?
DN: The EIB has launched its Economic Resilience Initiative (ERI) to increase its support and help build resilience in countries hit by the recent refugee and migration crisis, namely in the Western Balkans and Southern Neighbourhood.
The countries in both regions are already facing significant economic challenges, including high levels of public debt, low growth and high levels of unemployment, especially amongst young people. The influx of large numbers of refugees is putting poor infrastructure under additional strain. Existing financial instruments do not adequately meet the regions’ requirements. Nor do they provide financing on sufficiently favourable terms for the critical investments required to stimulate growth and job opportunities and ensure basic public services to both the local and refugee populations.
The ERI is evidence of the EIB’s determination to help meet these challenges. It is a new initiative endorsed by the European Council in June 2016. It will focus on raising additional investments to support of sustainable growth, vital infrastructure and social cohesion, including creation of new jobs opportunities. This will involve support both for the public and the private sectors.
With these investments, we could improve services like clean water, energy and electricity, and improve education, healthcare, local transport and urban services. We can also support the creation of jobs through more support for small businesses and micro-enterprises, encouraging them and other companies to grow their businesses and in so doing to increase job opportunities.
The ERI will support efforts by the public sector including municipalities and public sector entities, but also by providing support to the private sector through additional risk taking capacity and more volume as well as Concessional lending (combining loans and grants). In addition the ERI would allow the Bank to accelerate the finalisation of key infrastructure projects and provide additional financial and technical support on the ground where it is needed.
EWB: As you will visit Belgrade, what are the key potentials of Serbia in economic terms? Is it agriculture, IT sector or maybe something else?
DN: Since August 2016, I am based in Belgrade as the Head of the EIB Representation for the Western Balkans. Serbia, at one of Europe’s main crossroads, has a strong potential to attract Foreign Direct Investments to fuel its export-led economy, whether in agroindustry, manufacturing or high tech services. For this to happen, the country needs to continue building up its public infrastructure, such as transport, municipal infrastructure, health, education, research and development and its judiciary, all of which are supported by EIB’s activities.