Article: EU Pledges to Extend Single Market Benefits to Western Balkans Amid Instability
The European Union has vowed to prolong some of the benefits of its single market to the Western Balkans, with the aim of increasing funding as the region faces uncertainty. The Balkans, which have long awaited EU membership, could now be brought into the union’s digital single market specifically within e-commerce, cybersecurity, and trading goods and payments. The promise of pre-accession funding has also been made, according to European Commission President, Ursula von der Leyen.
“Our common goal is to accelerate their journey to European Union,” said the President, during a conference in Bratislava recently. She added, “It is not enough to say that the door is open. We must also assume the responsibility of bringing the aspiring members of our union closer to us.”
This promise comes as Russian President, Vladimir Putin, continues to invade Ukraine on a large scale. The EU’s focus on neglecting countries that could fall under Kremlin rule has led to some member states pushing for a membership push regarding the Balkans. However, enlargement since Croatia joined the EU has stalled. Kosovo, whose independence is yet to be recognized by Serbia and a handful of EU states, is furthest from achieving candidate status. Bosnia and Herzegovina, Albania, and North Macedonia have yet to begin accession negotiations, while Serbia and Montenegro have started negotiating, but joining the bloc is still a long way off.
Meanwhile, the United States has just taken punitive measures against Kosovo for inciting ethnic tensions, prompting violent clashes that left NATO peacekeepers and Serb protesters injured. This marks the worst clashes the Balkan country has seen this year. Despite this, Kosovo Prime Minister, Albin Kurti, struck a firm note, indicating that the US’s recent moves were wrong and that his government supports newly elected ethnic Albanian mayors in the north, who have been at the heart of the recent outbreak alongside the predominantly Serbian population of the region.
“Perhaps, those who talk about sanctions should think broader or deeper,” Kurti said in a Financial Times interview, “Serbia does not impose sanctions on the Russian Federation and funds this fascist militia in the north of my country, so maybe they should [receive] punishments.”
Extending Benefits to the Western Balkans
The announcement made by the EU would be critical in providing stability and security to the region. For years now, the Balkans have been left with a feeling of political and economic isolation, with the EU providing the only serious option for all states to join the bloc. Despite this, the Western Balkans are directly exposed to conflicts and security threats due to a lack of solid institutionalization or governance reform. However, von der Leyen announced that United Nations sustainable development goals were the blueprint for “a new partnership” between the EU and Western Balkan countries.
Additional Piece:
The Western Balkans presents an incredible potential opportunity for companies and investors with interests in the region. The general perception of the region is that it is unstable and potentially volatile, with sporadic outbursts of ethnic tensions, disagreements, and conflicts, leaving foreign investors in a constant state of despair. However, it is the opposite that is true. As the EU has pledged to extend single-market benefits to the Western Balkans, it only makes the region more attractive to investors and businesses.
Currency Market
The Western Balkans features a variety of different currencies including Serbia’s Dinar, Kosovo’s Euro, North Macedonia’s Denar, Bosnia and Herzegovina’s convertible mark, Albania’s Lek, and Montenegro’s Euro. The potential for a stable currency market is limited due to the region’s high levels of political instability. Balkan states are notorious for their frequent changes of government, which further increases uncertainty in this regard. For instance, Turkish investments in Albania are at 2.3 billion USD and continue to grow, but the devaluation of the Lek currency could have huge implications for investors if it were to fail or provide the wrong rate of return.
Conversely, the region does provide an excellent influence for investors who deal in a portfolio of currencies. For instance, Kosovo utilizes the Euro, yet Serbia uses the Dinar, allowing for investors to play both currencies since the fluctuations between numerous Balkans currencies tend to follow each other closely.
The legislation needed for financial transparency
Potential investments must know the severity of the Balkans’ financial institutions’ transparency ratings. Although companies who are keen to invest can directly contact financial institutions for transparency ratings, it is suggested that investors are best placed to conduct this research themselves as ratings can be misleading. Financial transparency is critical to attracting long-term investments, and therefore Kosovo’s rating is low and is a poor choice for anyone looking for high levels of financial transparency. Under the North Macedonian Securities act, all companies trading within the country’s stock exchange must report their financials in a straightforward manner, increasing awareness of the financial institutions under question.
The Western Balkans has one of the highest tax regimes globally. This makes the region unattractive for potential investors who are looking to park their money over a long period since it undercuts the possible benefits such investments can bring.
Corruption
Corruption is a major problem across the western Balkans region. The entire region is struggling with a perception problem, with the EU’s recent pledge to extend single-market benefits being a catalyst for new investors and businesses. Kosovo recently fell 10 places in the corruption perception index 2020 report, scoring just 36 out of 100. However, Albania’s government is currently putting measures in place to make the country more attractive to investors. Investors seem to be optimistic but cautious nonetheless about the region’s potential, with optimism mainly focused on Albania and Montenegro.
Summary:
The European Union has pledged to extend some of the benefits of its single market to the Western Balkans. This includes integrating the region into EU digital trade, such as e-commerce or cybersecurity and benefit from easier trade in goods and payments. Pre-accession funding to the Western Balkans is included to meet “crisis needs” without giving specific amounts. Although there has been a push towards membership in western Balkan states, enlargement has stalled since Croatia joined the EU ten years ago. The US has also recently taken punitive measures against Kosovo, sparking tension, and instability in the region.
Meanwhile, the Western Balkans continues to present an incredible opportunity for investors and businesses. However, currency fluctuations, lack of transparency, and high tax systems plague the region, along with persistent corruption. Nonetheless, investment interest in the region is growing, and with the EU’s pledge to extend benefits to the Western Balkans, the region is showing considerable potential as a new market.
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Brussels has pledged to extend some of the benefits of the EU’s single market to the Western Balkans and to increase funding as the region faces a new episode of instability.
western countries Balkans still waiting to join the EU could be integrated into the EU’s digital single market in areas such as e-commerce or cybersecurity and benefit from easier trade in goods and payments, said the Commission President European, Ursula von der Leyen. Pre-accession funding should also be boosted to help meet a “crisis need” for investment, she added, without giving figures.
“Our common goal is to accelerate their journey to European Unionvon der Leyen said at a conference in Bratislava on Wednesday. “It is not enough to say that the door is open. We must also assume the responsibility of bringing the aspiring members of our union closer to us.
Russian President Vladimir Putin’s large-scale invasion of Ukraine has focused minds in the EU on the risks of neglecting countries that could fall under Moscow’s influence, with some capitals pushing for a new push towards membership in the Balkans.
Enlargement, however, has stalled since the union admitted Croatia ten years ago. Kosovo, whose independence has yet to be recognized by Serbia and a handful of EU states, is furthest away as it is still awaiting candidate status; Bosnia and Herzegovina, Albania and North Macedonia have not yet started accession negotiations; and Serbia and Montenegro have started negotiations, but they are also far from joining the bloc.
The United States on Tuesday describes punitive actions against Kosovo for stoking ethnic tensions that have left NATO peacekeepers and Serb protesters injured in the worst clashes in the Balkan country this year.
Kosovo Prime Minister Albin Kurti on Wednesday struck a defiant tone, saying the US moves were wrong and that his government supported newly elected ethnic Albanian mayors in his country’s north, who have been at the heart of the recent outbreak. with the predominantly Serbian population of the region.
“Perhaps those who talk about sanctions should think broader or deeper,” Kurti said in an interview with the Financial Times. “Serbia does not impose sanctions on the Russian Federation and funds this fascist militia in the north of my country, so maybe they should [receive] punishments.”
He described the United States as Kosovo’s “friend, ally and key partner”, adding that he was in daily contact with the American ambassador in Pristina. “I admit and acknowledge that in terms of the approaches taken we had a slight difference, but honestly I don’t think any kind of sanctions [on] Kosovo. . . is the right measure,” he said.
Kurti said he would be ready to hold a meeting with Serbian President Aleksandar Vučić if mediated by Brussels. He also praised the deployment of more NATO troops to quell the violence, saying, “I’ve called for more NATO troops since last year.”
Miroslav Lajčák, EU special representative for the Belgrade-Pristina dialogue, said he understood Kurti’s logic of ensuring that elected officials can take office, “but at the same time, I think we have to more empathy and understanding”.
Lajčák urged “both sides to take a step back”, adding that Kosovo police should be removed from municipal buildings – a move that had led to violent clashes in recent days that left 30 NATO peacekeepers and more than 50 injured Serb demonstrators.
Brussels’ offer of funding to its Western Balkan partners was immediately welcomed by leaders in the region.
“The EU should open a new way of cooperation in terms of funding because otherwise there is no future in terms of security and stability for the Balkans and if the Balkans cough, for the European Union it is pneumonia,” Albanian Prime Minister Edi Rama said. said at the Globsec conference in Bratislava.
He stressed that receiving more money from the EU does not mean that the six Western Balkan countries will join the EU faster. “We’re not running to become members of the European Union, I’m part of that school of thought that thinks if it doesn’t work with 27, how will it work with 33,” Rama said. “But we have to enter into a new relationship, so let’s do it.”
North Macedonia’s Prime Minister Dimitar Kovačevski described von der Leyen as “a great friend of our countries”, but he insisted that Brussels should have helped earlier to reduce the wealth gap between his region and the EU, especially after seeing the benefits of including mostly former communist states in 2004.
“Why have the countries of South-Eastern Europe and Eastern Europe improved economically? For one reason only, because they became members of the European Union,” he said.
Kurti, from Kosovo, said more EU money was ‘definitely good news’, while insisting renewed violence in his country should not derail his path to membership to the EU. “In my belief, the EU is our destiny that we must embrace,” he said.
https://www.ft.com/content/ae7f5bf4-a0ff-4a6d-8ab0-126419dac538
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