European Commission proposes a new €6 billion Growth Plan for Western Balkans
Last November 8th, the European Commission unveiled a comprehensive Growth Plan aimed at providing early benefits of EU membership to the Western Balkans, bolstering economic growth, and fostering socio-economic alignment. This initiative seeks to expedite reforms and investments to significantly propel the enlargement process and the region’s economic advancement. A proposed €6 billion Reform and Growth Facility for the Western Balkans for 2024-2027 has been introduced, with payments contingent upon agreed reforms.
Four Pillars of the Growth Plan
- Enhancing Economic Integration: This involves aligning with the EU’s single market rules, opening sectors to neighboring countries simultaneously, and implementing seven priority actions such as free movement of goods and services, access to SEPA, and digital market integration.
- Boosting Integration within the Region: Emphasizing adherence to EU rules and standards within the Western Balkans’ Common Regional Market, potentially adding 10% to their economies.
- Accelerating Fundamental Reforms: Focusing on crucial areas to support the region’s path toward EU membership, attract foreign investments, and fortify regional stability.
- Increasing Financial Assistance: The proposal introduces a €6 billion instrument comprising grants and loans, linked to specific socio-economic and fundamental reforms.
Implementation and impact
Partners in the Western Balkans will craft Reform Agendas based on existing recommendations. These will undergo assessment and adoption by the Commission, forming a pivotal part of the Growth Plan’s execution.
Envisioned economic impact
European Commission President Ursula von der Leyen highlighted the plan’s potential to double the Western Balkans’ economy in the next decade. The combination of reforms and investments is set to grant access to key aspects of the EU’s single market, presenting opportunities in goods, services, payments, transport, energy, and the digital sector.
The proposal now moves to the European Parliament and the Council for review within the MFF mid-term package. Subsequently, the six Western Balkan partners will delineate individual reform agendas to drive growth and convergence during 2024 – 2027. Essential engagement in the EU-led Dialogue on normalizing relations is highlighted as a prerequisite for Serbia and Kosovo.
Economic convergence is crucial in aligning Western Balkan countries with the EU. Currently, the pace of convergence remains inadequate, with GDP per capita standing at 30% to 50% of the EU average. Integration with the EU’s single market has historically been instrumental in driving economic growth among member countries, significantly impacting GDP and income levels.
In essence, the Growth Plan aims to bridge this gap and accelerate the socio-economic alignment between the Western Balkans and the EU, ensuring a more robust and interconnected economic future for the region.
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