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Integrating the Balkans with the European Union
Abstract
The present paper addresses the issue of economic (and political) integration of the Balkans with the European Union (EU). The focus of the paper is on the five countries in the western Balkan region (the SEE-5)2: Albania, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic (FYR) of Macedonia, Serbia and Montenegro. Although Kosovo is still formally part of Serbia, it will be explicitly excluded from the analysis.3 Occasionally, the wider definition of the region is used which also includes Bulgaria and Romania (the SEE-7). Although these two countries entered the EU in January 2007, they may serve as useful points of reference in a comparative framework, given that they are also part of the Balkans region.
The paper will briefly recall the events of the 1990s, as they are crucial for understanding the present economic and political situation of the SEE countries. It will then discuss recent macroeconomic performance, progress achieved with transition-related reforms, and the important issue of integration with the EU. Some tentative conclusions regarding future prospects are given at the end.
Supplementary resource (1)
... Balkan countries have experienced the so-called brain drain: many people leave these countries for better economic conditions (Bartlett et al. 2016). There are also cases of underemployment and brain waste, meaning that people also accept working in a different sector, often requiring fewer skills than they used to work back home (Uvalic 2008;2011). In addition, there is also an issue of depopulation and regional peripheralization in the Balkans (Borsi and Metiu 2015;Lukić et al. 2012;Lulle 2019;Mickovic et al. 2020). ...
The Balkan countries undergoing the transition must advance their economies to be more competitive. The aim of this paper is to analyse economic growth with a primary focus on the analysis of economic convergence in the Balkan region in the period of 1997–2020. The research analyses the following Balkan economies: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Romania, Serbia, and Slovenia. This study applies Gross Domestic Product (GDP) as a measure of economic growth and is based on the neoclassical economic growth model: the Solow’s convergence concept. The results show that the Balkan countries experienced economic convergence with a speed of 1.82% in the cross-sectional model and 7.87% in the panel data model. It means that the initially less developed economies noted higher economic growth than those richer.
... employment or training might also be seen in that there is still a tendency to emigrate in order to find a better-paid job abroad (Gërmenji and Milo, 2011;King and Oruc, 2019). This is known as the brain drain or brain waste concept, which has a high frequency in WB countries (Bartlett et al., 2016;Uvalic, 2008Uvalic, , 2011. Possible reasons for high unemployment can be seen in the results of the next indicator, which is: the share of youth not in education, employment or training (Figure 4). ...
participate in the framework of Sustainable Development Goals (SDGs) set by the United Nations. In total, there are 193 countries committed to fulfilling the 2030 Agenda for Sustainable Development, which was implemented in 2015. One of the seventeen Sustainable Development Goals is to promote sustained, inclusive, and sustainable economic growth and decent work for all. This goal is expressed in the following indicators: employment and unemployment rates, people killed in accidents at work, real GDP per capita, resource productivity, and domestic material consumption. The aim of this paper is to analyze SDG 8 in the Western Balkan economies. Since the Western Balkan countries are EU candidates or potential candidates, comparing their performance with the EU average is vital. The results show that although Western Balkan countries have improved their performance, they still fall behind the EU average. They should focus more on increasing their economic growth rates and providing more sustainable workplaces. Therefore, future actions to be enhanced by the economic policy in the Western Balkans should include the implementation of legal facilitations for start-ups and other firms in order to boost the stimulus for entrepreneurship, develop sustainable migration policy, and promote stable forms of employment.
As a result of the two Eastern enlargements, the European Union (EU) now consists of 27 countries, 17 of which will be members of the euro Area (EA) as of 1 January 2011. Except for Bulgaria, Romania and Slovenia, the South East European (SEE) countries still lack full integration into the EU, although some of them have already obtained, or will soon obtain, candidate status. Because of the EU’s internal problems, but also because of the slow progress these countries have made so far towards functional economic and political structures, it cannot be assumed that they will be admitted to the EU, or even to the EA, fairly soon. Fears have been expressed that the accession of SEE countries might increase economic divergence within the EU and might result in more asymmetric shocks acting on European economies. In particular, some observers regard the membership of these former communist countries as a threat to the macro-economic stability of the EU, as some of their political systems appear to have but a weak tradition of macro-economic policies for stability and high growth.
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