In November 2019 officials from the Republic of Serbia, Albania, and North Macedonia (then FYR Macedonia) have proposed liberalization of the movement of people by what is now widely referred to as mini-Schengen. In 2020, regional cooperation took another step forward with the proposition of a Common Regional Market[1], an embodiment of the four core freedoms[2], the pillars of European integration. The proposed common market has been heralded by many, with the High Representative Josep Borell welcoming the idea stating that “Western Balkans are at the heart of Europe, and their future is in the EU”.[3]
With no thorough analysis of the impact the common market would have on the entire region’s EU accession path, this paper will address some benefits, costs, and potential scenarios of the proposed integration.
Common Regional Market and its benefits
To the best knowledge of the author, no in-depth analysis of the impact common market would have on the region’s economies and EU accession aspirations has yet been made. The proposed initiative would build upon the free movement of people, goods, services, and capital, the same freedoms the European common market is built upon. To this end, leaders of the Western Balkan countries have signed a Declaration and adopted an Action Plan targeted at shaping the common market by 2024.
Action Plan, an ambitious document, envisions a joint trade area with internal obstacles removed, a region integrated into the pan-European digital market, an investment area aligned with the best international and EU practices, and an industrial and innovation area. An abundance of measures needed to be taken in order to achieve this bold idea, would all be done in accordance with the EU standards enhancing the region’s accession path.
Furthermore, in a factsheet put forward by the WB6 Chamber Investment Forum[4], clear benefits of the integration process such as the higher attractiveness for FDI (Foreign Direct Investments) as an 18 million people market and higher competitiveness with no internal trade obstacles, have been depicted. It is also suggested that various taxes, quantitative restrictions, and technical regulations would be abolished, resulting in lower consumer prices and increased competitiveness of companies. Diplomas and professional qualifications would be recognized everywhere in the region, bolstering cooperation, trust, and unity between peoples.
Similar to the EU, citizens would travel, work, and live without restrictions or permits in any of the Western Balkan countries. If the region was to follow suit, internal trade, production, and growth would increase as they have in the EU. In the long run, the Action Plan suggests that integration could lead to more job opportunities possibly adding up to 6.7 percent of GDP growth to the region.
Moreover, with the broad support the project has received from the European Commission and several member states, it could prove an important stepping stone towards full membership. Reacting to the conclusions of the Sofia 2020 Summit, which saw the common market initiative put forward, the Commissioner for Neighbourhood and Enlargement Olivér Várhelyi stated that “the commitment of the region’s leaders to develop a common regional market and implement a green and digital transition is crucial for bringing the region closer to the EU”.[5]
Creating a common market whilst implementing EU acquis communautaire in one of the primary EU competence areas, could testify to the region’s willingness to reform and participate as full members in the European integration process. As an important step towards the realization of this goal, officials of Serbia, North Macedonia, and Albania have signed agreements allowing inter-state travels with nothing more but the ID and a comprehensive cooperation in the fight against the pandemic[6]. Additionally, this process of enhanced regional cooperation could kick-start accession talks, regardless of whether they have already begun and ran into a stalemate or are yet to be opened.
Possible obstacles
On the other hand, the question looms whether Western Balkan countries do have the capacity and readiness to implement everything agreed. When the forefront project mini-Schengen has been announced, the public was quick to disregard it. Warnings that this was an attempt to create Great Albania or Great Serbia put mini-Schengen in jeopardy, reminding us that severe trust issues are haunting modern relations between Western Balkan peoples. The Action Plan for the common market put the target date at the end of 2024, which could prove too optimistic.
The proposed integration would require an increased legislative activity and change that could not be realized without broad public support and devotion which, in the authors’ opinion, are missing. Recently made commitments by the Regional Cooperation Council and the CEFTA Secretariat[7] to spearhead the implementation of the Action Plan could be encouraging but, the leading role does remain in the hands of national governments. With the region’s falling democratic standards, the whole process could turn out to be empty words said only to create the impression of making an effort. Additionally, it remains unclear whether people in the region would actually support this idea and, to what extent are the business communities and political elites ready to go through with this project.
Alternative scenarios
Even if the common market project is implemented successfully, some Western Balkan countries might end up further away from the full membership. Although the proposed project has seen praise from all over Europe, one scenario would see participating countries tied up in a whole-region accession path. Just as Central and Eastern European countries have all been a part of the 2004 enlargement, the same principle of joint accession, could apply in this case as well.
As with the mentioned enlargement, more advanced candidates would have to wait for the other countries to catch up. Effectively, this would mean protracted accession process for the whole region. In return, it would give the EU more time to prepare for another big enlargement and sort out its internal differences. It would also mean more time for the Western Balkan countries to advance and reform. But, it might not be optimal strategy for some countries.
If we take Montenegro as an example, which has done the most, or Serbia, which is currently in a stalemate position, the regional approach to accession might not be optimal. With North Macedonia and Albania both facing uncertainties[8], for different reasons, over the start of accession talks, Bosnia not yet granted a candidate status and Kosovo* not even recognized by five member states, decades could pass while the whole region rises to the occasion. Montenegro and Serbia would, thus, prolong their paths to full membership. Unwillingness of Montenegro to commit to this project right away might be prompted by this kind of thinking. After all, other countries have shown superb interest by sending high-ranking officials to the cooperation talks, such as heads of states or governments, while Montenegro’s officials have conspicuously been lower-ranking.
Furthermore, a lot has been written on the enlargement fatigue (see Schimmelfennig, 2008), raising a question on the Union’s willingness to actually enlarge. In yet another scenario, regional integration would be only a substitute for the integration into the European Union. Moreover, to this day, no tangible commitments from the EU side, such as in the case of 2004 enlargement, have been made. At the same time, the latest Commission reports on the Western Balkan countries are less than favorable, shedding some light on the falling democratic standards, increased pressure on the free media, corruption, and politicization of civil services[9].
In this scenario, there is no real readiness from Brussels to enlarge and no real readiness from Western Balkan leaders to reform and meet the required standards. A regional common market, whilst having economic benefits, would remain at that and not bring the region closer to the full membership.
Conclusion
Sound economic reasoning could lead us to identify various economic benefits of the common regional market. After all, the European Union, at its core, is made of the success of economic integration. There is hardly any doubt that emulating this process would have a positive impact on the region’s economies. On the other hand, there is no clear understanding of the repercussions regional integration would have on the EU accession. Since the plan has been put forward, EU officials have reiterated that this undertaking would be a stepping stone towards full membership. By speeding up the process of adopting EU practices, at first only in the common market area, further reforms could be incentivized and accession accelerated. However, a few possible alternative outcomes are in play:
- Firstly, it is not clear how committed and able are the governments of the participating countries to successfully implement this ambitious plan until 2024. Many obstacles that might arise could derail the initiative, leaving the region no closer neither to the common market nor the EU membership.
- Secondly, creating a regional common market could set a whole-region accession trajectory, an unfavorable outcome for some. Common market would successfully be implemented with economic benefits there to reap but, each and every country would have to fulfill the accession criteria before the region joins EU as a whole.
- Lastly, the regional cooperation process could turn out to be a substitute for full membership as there is no diligence from either side, the EU and the Western Balkan countries, to commit further to each other and advance with the reforms. Enlargement fatigue and internal differences results in no tangible commitment from the EU. Western Balkan countries do enjoy the benefits of an integrated market but no real advancement is made when it comes to the rule of law, corruption and democratic standards.
In the end, it remains to be seen which scenario would be played out.
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References:
[1] Common Regional Market would apply to WB6 or Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, and Serbia. To see the whole text of the Declaration and Action Plan on Common Regional Market signed at the Sofia Summit 2020 visit here.
[2] To see more in detail about the core European freedoms encompassing free movement of people, goods, services, capital and payments visit here.
[3] Western Balkans Summit in Sofia: Remarks by High Representative/Vice-President Josep Borrell (visit here).
[4] Western Balkans 6 Chamber Investment Forum, Common Regional Market Factsheet, see here.
[5] To see some of the reactions to the proposed plan visit here.
[7] The RCC and CEFTA Secretariats are leading regional organizations to facilitate the implementation of the Action Plan, while other regional and/or international structures are included in specific actions in line with their scope of work and program. To see RCC’s full investment into this project visit here.
[8] Bulgaria vetoed the decision to open EU accession negotiations with North Macedonia on Tuesday (17 November), a move which indirectly also affects Albania, another Western Balkans candidate which has advanced on its EU path in tandem with Skopje. See full text here.
[9] To see more in detail about the Commission’s report on Western Balkan countries visit here.
Note: This article is part of Road to Warsaw Security Forum – Western Balkans Programme
Cover Photo: Tanjug/Presidency of Serbia
Author: Dušan Ristić, member of the Centre for International Public Policy
