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The Western Balkans, lost on the road to the EU. The initiative that could take the region out of the deadlock

Serbian President Aleksandar Vucic (L) is welcomed by European Council President Charles Michel (R) ahead of an informal summit between the EU and the leaders of the Western Balkans nations (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) at the EC headquarters in Brussels, Belgium, 16 February 2020.
©EPA-EFE/OLIVIER HOSLET  |   Serbian President Aleksandar Vucic (L) is welcomed by European Council President Charles Michel (R) ahead of an informal summit between the EU and the leaders of the Western Balkans nations (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) at the EC headquarters in Brussels, Belgium, 16 February 2020.

The countries of the Western Balkans have been on their European path for more than two decades, but without the prospect of successfully reaching their goal, membership in the European Union. The integration process seems to be in a limbo, and it got there because of the insufficient readiness of these countries to implement the necessary reforms and resolve their bilateral issues, but also because of a lack of sincerity of the EU members, who don’t seem as determined as they claim to welcome the region to their community.

The Open Balkans Initiative: a regional mini-Schengen as a way out of the current stalemate

A regional initiative whose members are Serbia, Albania and Northern Macedonia was launched in 2019 under the informal name of mini-Schengen. Later it changed its name to the Open Balkans initiative. The most important goal of this initiative is to connect citizens and their businesses. The immediate effects of this initiative could be the long-term provision of peace and the abandonment of nationalistic policies and rhetorics.

One of the failures of the European integration process lies in the insufficient motivation of domestic political leaders to be the owners of this process together with the citizens. Instead, European integration was often seen as meeting other coutries’ needs and formally ticking boxes. Such an approach has led to a situation in which most of the countries of the Western Balkans are in a status quo position when it comes to European integration.

Although the leaders of the Open Balkans explicitly said that it is not an alternative to the EU accession process, it seems that the initiative did arise from the need to do something with this region as waiting for the EU is not an option anymore. The advantage of this initiative, unlike the process of European integration, is that it was designed by domestic political leaders, and that gives the initiative higher prospects for success. When you are the owner or the initiator of a process, your motivation for success is much higher than when you have to meet the criteria set by someone else. This still does not mean that the countries of the Western Balkans do not need to implement the necessary reforms in order to become members of the EU, but perhaps the Open Balkans is a way to get even closer to the EU.

We have heard criticism from the EU many times about bad regional relations, but because of that, the Open Balkans can be a way to achieve better relations in the region with the goal of stronger economic connections and freedom of movement of goods, people and capital. If in the Western Balkans countries will show a higher level of political maturity and seriousness towards overcoming differences and using the region's capacities, then they would be taken more seriously by Brussels as well. The stronger and more connected a region is, the stronger its negotiating position.

The coronavirus pandemic was a good example of how important regional cooperation and assistance is, when countries could not rely on the EU but turn to themselves. Although by donating vaccines to the countries in the region Serbia did more of a PR stunt than provide a substantial help, Belgrade has shown that it is possible to pursue a policy independent of Brussels. The turn towards regional cooperation should not make Brussels fear that its influence in the Western Balkans could be lost. The Open Balkans and EU integration should not be mutually exclusive but complementary processes. Even if the process of European integration today remains only a fiction.

Is the Open Balkans an initiative meant to help some leaders circumvent EU reforms?

Although businessmen are reacting positively to the attempt to create a larger market in the Balkans, the question arises as to why Montenegro, Kosovo and Bosnia and Herzegovina do not see themselves in this initiative at the moment. It is no coincidence that those three countries have complicated relations with Serbia: Bosnia and Herzegovina, where Republika Srpska flirts with separatist intentions, Montenegro, which is strongly influenced by Belgrade politics, and Kosovo, whose independence Belgrade does not recognize.

The main criticism coming from these countries is that the Open Balkans was created as a consequence of large-scale projects of Serbia and Albania, or that this is Vučić's project of creating a "Serbian world". Then the question arises as to what is the interest of Northern Macedonia to be a part of the initiative led by Serbian and Albanian nationalistic interests.  

BiH and Montenegrin political leaders said they did not see concrete benefits from joining the initiative because travel and trade are already regulated by the CEFTA trade agreement between Southeast European countries, while Kosovo's prime minister said he would rather see an improved version of the CEFTA agreement. However, joining the Open Balkans would make the transport of people and goods even easier, as controls at border crossings would be abolished.

However, the Open Balkans initiative can also be seen as the way for the autocrats Vučić and Rama to avoid implementation of EU-needed reforms that would endanger their grip on power. If the EU loses its influence in the region, then it will be even easier for political leaders to do what they have done so far, undermining independent institutions and concentrating power in their own hands. However, there can be no long-term economic development if there is no favorable political and legal climate where investors would be confident in their investments and the possibility of legal protection.

The Open Balkans can also be seen as a step closer to the European Economic Area as a substitute for EU membership. Belonging to this area is the highest possible degree of economic cooperation and integration with the EU without being a member. This area implies the same freedoms of movement of goods, services, people and capital as in the internal market of the European Union. Residents of these countries are free to move around the territory of other EEA countries, to study or work in them without a work or residence permit, and there are no customs or other barriers to exports.

This region belongs economically and culturally to Europe, and therefore the most logical outcome is to strengthen cooperation with European partners either through this or some other initiative. Where there is no such cooperation, there’s room for other players to strengthen their influence, as is the case with China today.

Why turning towards non-EU powers is not feasible in the long run

Following President Vučić’s recent visit to China, the signing of a free trade agreement with this country has been announced. Although at the moment it is not known what exactly what does the agreement mean, this is not a good message for the relations between Serbia and the EU. Serbia should harmonize its foreign and economic policy as much as possible with the policy of the Union, and such a move with China pushes Belgrade away from the integration process. On the other hand, if Belgrade signs a free trade agreement with China, as it already has with Russia, it could attract EU investors to invest in Serbia so that they can later export from Serbia to China. At the same time, when – and if – Serbia completes the process of European integration, it would have to terminate all free trade agreements that it signed earlier.

It is true that exports from Serbia to China have increased significantly over the past few years, from just over 6 million USD in 2012 to the current 377 million USD. But this is not the whole story: the largest part of this growth is the export of only one Chinese company to its home country, and that is Zidjin in Bor. Exports of copper and related metals (such as silver, platinum or gold) account for $ 238 million, or nearly two-thirds of the total.

If you want to export something to China from the domain of industry, it is much easier for you to open a factory in China itself than in Serbia. China is far away, transport costs have increased significantly, there is already a serious industrial base there, and when you look at exports from the EU to China, these are technologically demanding products that are not made in Serbia.

Therefore, the reasons for the free trade agreement with China can be found in the domain of political and diplomatic, rather than purely economic. With the upcoming elections in April, the current regime in Serbia is trying to repeat the great economic promises of a better life. In this domain, China is playing an already notable propaganda role.

China is not the only country that has been increasing its profile in the Western Balkans during the past several years. Russia has been quite active politically, and there have been Russian investments, especially on the energy market. Countries like Turkey and the UAE have also been taking an interest in the region. However, in spite of these developments, the region remains committed to cooperating with European countries, on which trade depends the most. If the Open Balkans project were implemented, it would be another step closer to stronger economic cooperation not only in the region but also with the EU. No matter how much the influence of China and others will grow, that influence will remain more in the domain of the political than the economic one, because the economic interests of the Western Balkans are in Europe and not in Asia.

 

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  • Countries in the Western Balkans have long expressed their desire to join the EU, but their inability to get through with the reforms required by Brussels, as well as the latter's hesitations, continue to prolong the pre-accession process. The answer to the stalemate could be a regional mini-Schengen.
  • Although the leaders of the Open Balkans explicitly said that it is not an alternative to the EU accession process, it seems that the initiative did arise from the need to do something with this region as waiting for the EU is not an option anymore. The advantage of this initiative, unlike the process of European integration, is that it was designed by domestic political leaders, and that gives the initiative higher prospects for success. When you are the owner or the initiator of a process, your motivation for success is much higher than when you have to meet the criteria set by someone else. This still does not mean that the countries of the Western Balkans do not need to implement the necessary reforms in order to become members of the EU, but perhaps the Open Balkans is a way to get even closer to the EU.
  • The Open Balkans can also be seen as a step closer to the European Economic Area as a substitute for EU membership. Belonging to this area is the highest possible degree of economic cooperation and integration with the EU without being a member. This area implies the same freedoms of movement of goods, services, people and capital as in the internal market of the European Union. Residents of these countries are free to move around the territory of other EEA countries, to study or work in them without a work or residence permit, and there are no customs or other barriers to exports.
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