Saturday

22nd Jul 2017

Opinion

The Western Balkans in the EU: To be or not to be?

The Western Balkans (WB) is relatively small but a complex region with wide cultural and religious diversity. The last two decades showed that such an environment might be easily misused by politicians with nationalist agendas that ultimately lead to severe conflicts and wars. This had direct negative impact on economic growth and living standard of the people in the region.

In addition, the actual challenges in the region, such as the complex governance system in Bosnia and Herzegovina, sensitive relations between Kosovo and Serbia, as well as the name issue of Macedonia, heat up the debate between the eurosceptics and euro-optimists about EU integration of the WB.

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  • Macedonian and EU flags (Photo: Boris Grdanoski)

EU integration continues to be the main slogan of almost all party leaders and prime ministers in the WB. This has proved to be a politically attractive position, since it matches with the optimistic expectation of the people for better future.

The expected benefits from joining the EU will be an increase in trade and investments. This will create new jobs and improve living standards. These positive effects will be enhanced by integration in a wider market such as the EU. Most policymakers support the idea - that the orientation of the WB countries towards the EU is the right way to go and is a sustainable option for these countries.

This is the main and sole convergence point within and among countries of the WB. The progress of WB countries recognized by EU through granting status of candidate, visa liberalisation and the opening of negotiations for membership generate stability and further optimism in the region.

However, EU integration is a long and complex process dealing with convergence and catching-up with the existing economic performance of EU countries.

If we compare the standard of living among EU members and WB countries we will see huge differences. In 2008, GDP per capita for countries in the euro area was around €30,000, while the average GDP per capita for the WB countries for the same year was around €5,000.

There are significant differences also in the rate of unemployment. The average rate of unemployment in the euro area is 8-9 percent while the average rate for the WB countries exceeds 21 percent. These figures expose wide differences in the standard of living between WB countries and the EU.

In order to catch-up with EU economies, WB countries need to grow faster and to become more competitive. The experience of this decade shows that the average rate of economic growth of the EU, until the beginning of the world economic crisis was around 2.5 percent, while economic growth of WB countries was around 5 percent. A simple arithmetic exercise shows that with this ratio, it will take 75 years for WB countries to reach the living standard (measured as GDP per capita) of the EU countries. This is a long and complex process with certain socio-economical costs.

Any further prolongation of this process and the delay of benefits compared to the costs increases the arguments of the sceptics versus the optimists for the European future of the WB. On top of this, prolongation encourages nationalist policy options in the WB which could lead the region to isolation, instability and economic decline. It is clear hat integration of the WB in the EU is essential for stability and peace in the EU itself.

WB countries today are closer than ever to EU integration. However, meeting the criteria for integration still remains a great challenge for these countries. Perhaps it is time that EU countries should look to increasing the scope and intensity of support for the WB. This is not economically a big burden for the EU, with a market of around 500 million inhabitants, while the WB countries count a population of just 23 million. Since the cost of non-integration of these countries in the EU can be greater than the cost of integration itself, EU support is both economically and politically correct. This will increase the capacities of the WB countries to mobilise their own growth resources and encourage euro-optimists in the region.

Addressing the main question - "WB into the EU: to be or not to be, when and how?" – we may say: Yes to the integration of the WB into EU and the sooner the better. But it requires more intensive support and involvement from the EU both in political and economic terms to help the WB generate their own capacities of growth. This is a win-win game both for the EU and WB to ensure peace, stability and growth.

Dr Fatmir Besimi is the Minister of Economy in the Republic of Macedonia

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