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Interviews

[EWB Interview] Bregu: EU Growth Plan could double Western Balkan economies in the next decade

While the Western Balkan countries works on implementation of signed agreements regarding the creation of Common Regional Market, the EU offers new Growth Plan for the Western Balkans, with the aim of bringing Western Balkan partners closer to the EU membership. One of the ambition of the Growth Plan is to advance accession, boost economic growth and accelerate socio-economic convergence. For that purpose, the EU will offer €6 billion financial instrument for the period 2024-2027.

About the significance of the EU Growth Plan for the Western Balkans, continuation of the work on creation Common Regional Market we spoke with Majlinda Bregu, Secretary General at Regional Cooperation Council (RCC).

European Western Balkans: The procedure for adopting the Growth Plan for the Western Balkans is underway within the EU institutions. How do you assess the significance of this plan for development of the region and the EU integration process?

Majlinda Bregu: Backed by a commitment of €6 billion in grants and loans, the Growth Plan is essential because it is aiming to boost the economic growth and accelerate socio-economic convergence of the Western Balkans. These are pivotal for advancing our region’s trajectory towards the EU integration, a paramount objective we all strive to achieve. Currently, our region is noticeably behind the EU member states in terms of key economic indicators, and I’d like to explain why this matters.

While the Western Balkans witnessed a commendable 79% increase in GDP per capita between 2003 and 2022—almost triple the EU’s average growth rate of 29%—our current per capita GDP of approximately €16,000 stands at less than half of the EU’s nearly €42,000. This statistics vividly underscores the considerable distance we must traverse to achieve full convergence with the EU. To offer perspective, at current growth rates, convergence would only be achieved by 2076 — more than five decades from now, a timeline that’s unacceptable for both my generation and younger ones.

This is where the Growth Plan comes in, with its vast potential. If executed correctly, it could essentially double our economies’ size in the next decade. The recent announcement during a high-level meeting in Skopje earlier this year, indicating the commencement of fund dispersion this summer, couldn’t have come at a better time, providing much-needed financial support to a region in dire need.

Central to the Growth Plan is the Common Regional Market (CRM) Action Plan, spearheaded by the Regional Cooperation Council (RCC). Building upon successful initiatives already in place within the CRM, the Growth Plan is crucial in offering the Western Balkans opportunities for closer integration with the EU’s Single Market. However, access to the EU Single Market is contingent upon fulfilling commitments within the Common Regional Market framework, itself modelled on the EU Single Market.

EWB: What do you see as benefits of including the Western Balkans in the EU Single Market?

MB: It’s widely recognised that integration into the EU’s Single Market has been a key catalyst for economic growth in countries that have joined the EU, offering tangible benefits that improve citizens’ quality of life. This trend holds true for our region as well.

The annual Balkan Barometer survey conducted by the RCC sheds light on the aspirations of Western Balkan citizens in this regard. When asked what the EU means to you personally, the top three responses indicate a desire for economic prosperity (40%), the freedom to study and work within the EU (29%), and the freedom to travel (24%). These aspirations align closely with the opportunities presented by entry into the EU Single Market.

The Growth Plan serves as a roadmap towards this objective, focusing on seven priority areas: the free movement of goods, services, and workers; access to the Single Euro Payments Area; integration of road transport and energy markets; development of the digital Single Market; and integration into industrial supply chains. For instance, participation in the Single European Payment Area alone could yield benefits of up to €500 million annually.

In practical terms, this translates to more abundant and higher-quality educational and employment opportunities, smoother and safer travel experiences, improved business prospects, streamlined processes, increased investment opportunities, and facilitated exports, among other benefits.

But this is a challenging process, which will not be easy for anyone. Right now, respective Western Balkan administrations are working in two parallel streams: first, their national reform agendas that would potentially advance their path on EU phasing-in policies; and second, deepening the regional economic integration among themselves, which is a pre-requisite to access the EU Single Market.

While the European Commission defines priority areas for national reforms, development of a functional Common Regional Market within the Western Balkans remains a work in progress. This endeavour represents a truly regional initiative, driven by the collective vision of closer cooperation and integration within the region over the next four years. Both of these efforts converge towards the overarching strategic goal of closer association with the EU and its Single Market.

EWB: You have announced that the RCC is working on a new Action Plan for Common Regional Market (CRM). How do you assess the fulfilment of the previous Action Plan, and what would you highlight as priorities that should be included in the new Action Plan?

MB: Regional cooperation has made a significant impact across our region, particularly through the implementation of the Common Regional Market. As of the last October roaming charges with the EU are significantly lower, making travel more affordable for our citizens and sparing them the hefty phone bills. Additionally, four mobility agreements have been signed, enabling mutual recognition of professional qualifications for 7 professions, as well as easier flow of students in our region with simpler procedures for diploma recognition which affects students of more than 70 Universities in the region. Green Lanes the region agreed upon during the pandemic enabled uninterrupted supply of medicine and food in the region, and now extended in post-pandemic period are significantly shortening the waiting time at border crossings.

While the results are promising, our focus on regional cooperation must intensify as our future prospects are deeply intertwined with it. The success of the Common Regional Market hinges on smooth operation, free from regional disputes, as it serves as a conduit to the EU Single Market.

Looking ahead, the continuation of the CRM Action Plan, referred to as CRM2 in this phase, should prioritise measures that bolster the four freedoms and foster sustainable economic growth. This includes attracting foreign investments, facilitating trade within the region and between the EU and Western Balkans, advancing digitalisation, enhancing the service sector, and facilitating the movement of people.

We anticipate that by the end of March Western Balkan governments will identify new potential areas for the second phase. So far, two high-level meetings have been convened to discuss the benefits of the Growth Plan, with the next scheduled for 16 May in Podgorica.

Following extensive consultations with Western Balkan economies, regional partners, and stakeholders, our aim is to have the new phase of the CRM Action Plan adopted by Western Balkan leaders at the upcoming Berlin Process Summit on 14 October. This collaborative effort underscores our commitment to achieving the full potential of regional cooperation for the benefit of all stakeholders involved.

Photo: RCC/Armand Habazaj

EWB: Bosnia and Herzegovina is still the only country that has not ratified the agreement on travel with ID cards. Are there any indication of when this agreement will be ratified? How do internal political crises in the countries of the Western Balkans, as well as regional problems, especially the stalemate in the dialogue between Belgrade and Pristina, affect the process of creating the Common Regional Market?

MB: It’s an unfortunate reality in our region that reaching consensus can be challenging, given our differing perspectives. However, it’s crucial to recognise that while we may not see eye to eye on everything, there are many areas of common ground that shouldn’t be overshadowed by disagreements.

At the leaders’ meeting in January in Skopje, and later again in Tirana, a clear consensus has been voiced on the importance of implementing agreed-upon measures without obstructions. It’s essential to ensure that hard-won agreements are upheld, despite any disagreements.

To this end, the European Commission is actively exploring mechanisms to prevent blockages. Those who attempt to stall progress may find themselves at a disadvantage, as hindering regional progress could result in a loss of much-needed funding. In contrast, others may proceed unhindered.

With time being of the essence for our region, we can no longer afford persistent stalemates and blockages. Remaining stagnant when progress is imperative puts our goals at risk. It’s vital that we collectively strive for advancement before facing further challenges down the road.

EWB: How do you assess the role of civil society organizations in promoting regional cooperation and better integration of the region? How important is it to heed the recommendations that civil society gives to the countries of the region and European institutions regarding the Berlin Process?

MB: As the Secretary General of an inter-governmental organisation, which RCC is, my primary focus is on facilitating dialogue and collaboration among governments within the region. While civil society organisations undoubtedly play a crucial role in promoting regional cooperation and integration, it’s not within my purview to assess their specific contributions.

That said, I recognise the importance of engaging with civil society and considering their recommendations seriously. Civil society organisations often offer valuable insights and perspectives that complement the efforts of governments and institutions like the RCC. Their input can help shape policies and initiatives under frameworks such as the Berlin Process, ultimately leading to more inclusive and effective regional cooperation

While I may not directly assess the role of civil society, I do believe it’s essential to foster an environment where their voices are heard and their recommendations are given due consideration by both regional governments and European institutions involved in initiatives like the Berlin Process. Collaboration between governments and civil society is vital for achieving our shared goals of greater regional cooperation and integration.

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