How to get things moving in EU-Western Balkan relations

Abstract

The EU's enlargement policy is in a dilemma, especially with regard to the Western Balkan countries. The promise of accession contrasts with the slow realisation of this promise. The dilemma results less from the process of the Western Balkan countries' readiness for accession than from the absorption capacity of the Union itself. Against this background, a further evolution of the Association Agreements, for example in the direction of a customs union and decision-shaping can buy the Union time for its own reforms. Legal regulations in other association agreements, including the Europe Agreements and with the countries of the European Economic Area, are patterns.
JEL classification: F 53, F55, K33

Full text

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How to get things moving in EU- Western Balkan relations
by Hubert Gabrisch
Abstract:
The EU's enlargement policy is in a dilemma, especially with regard to the Western
Balkan countries. The promise of accession contrasts with the slow realisation of this promise.
The dilemma results less from the process of the Western Balkan countries' readiness for
accession than from the absorption capacity of the Union itself. Against this background, a
further evolution of the Association Agreements, for example in the direction of a customs
union and decision-shaping can buy the Union time for its own reforms. Legal regulations in
other association agreements, including the Europe Agreements and with the countries of the
European Economic Area, are patterns.
JEL classification: F 53, F55, K33
Keywords: Western Balkans, EU accession, association, legal basis, EU reform
CONTENTS
1. Introduction
2. The legal basis
3. Association as a pre-accession instrument
4. SAA with Western Balkan states as a pre-accession instrument
5. Conclusions: further evolution of SAAs

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1. INTRODUCTION
Croatia was the first Western Balkan country to apply for accession to the European
Union (EU) in February 2002, and Kosovo was the last to do so in December 2022. All countries
except Kosovo have been accepted by the EU as candidates for accession; Croatia already
joined the Union in July 2013. Accession negotiations have been opened with Albania,
Montenegro, Northern Macedonia and Serbia, except for Bosnia and Herzegovina and Kosovo,
which does not yet have official candidate status (Table 1). In the Western Balkan countries
remaining after Croatia's admission, and also among independent commentators in the EU, the
impression has solidified that the conclusion of accession negotiations, let alone a date for the
countries' admission to the Union, has become an uncertain prospect and that the accession
process may well end up that way, at least for some of the six countries (Serbia, Kosovo, Bosnia
and Herzegovina), as with Turkey, which has been considered a candidate country since 1999
and with which accession negotiations were opened in 2005, but have been frozen since 2018
for reasons of inability to join. On the EU side, it is its own limited absorption capacity that
prevents the Western Balkan countries (but also Ukraine and Moldova) from being admitted
quickly.1
Overview on the status of EU-Western Balkan accession process per July 2023
Country Application
for
membership
in……
SAA
effective
since...
Accession
candidate
since….
Accession
negotiations
started in…
Accession
Albania
28/4/2009
1/4/2009
24/6/2014
/7/2022
------
Bosnia and
Hercegovina
15/2/2016 1/6/2015 15/12/2022 ------ ------
Kosovo
15/12/2022
1/4/2016
-------
------
------
Montenegro
15/12/2008
1/5/2010
17/12/2010
18/12/2012
------
Northern Macedonia
22/3/2004
1/4/2004
17/12/2005
/7/2022
------
Serbia
22/12/2009
1/9/2013
1/3/2012
21/1/2014
------
Memorandum item:
Croatia
21/2/2003 1/2/2005 18/6/2004 4/10/2005 1/7/2013
Source: European Union: https://european-union.europa.eu/principles-countries-
history/joining-eu_en; accessed 20/07/2023.
1 The European Commission in February 2018 set an indicave deadline (2025) for
admission to the EU of the two most advanced candidates – Serbia and Montenegro (European Commission
2018), which seems in 2023 outdated.

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The EU has concluded bilateral Stabilisation and Association Agreements (SAAs) with
all Western Balkan countries. The preamble of these agreements mentions the 'European
perspective' and explicitly the potential candidate status for EU membership in case of a
successful implementation of the agreement. This last formulation, however, is missing in the
SAA with Kosovo. In this respect, the SAAs with all other countries can de facto be regarded
as pre-accession instruments, just as in the earlier cases of the Association Agreements with
Greece and Turkey (1964).
This policy note discusses the possibilities of accelerating and deepening integration
into the EU through the further evolution of SAAs, on the one hand to overcome what may be
perceived as a deadlock in the Western Balkan states attempts to join the Union, and on the
other hand to give the EU time to find its own destiny. My remarks begin with a presentation
of the legal basis for accession and association. This is followed by a characterization of those
Association Agreements that the EU concluded with the Central-Eastern European transition
countries ('Europe Agreements') and with the EFTA-EEA Agreements in the 1990s. The next
step is to earmark the the main legal differences of SAAs to these former agreements. The final
section presents conclusions, using options of the EU's capacity to admit new members as an
additional assessment criterion.
2. THE LEGAL BASIS
Admission to and association with the EU are legally different instruments of EU policy.
Under international law, association is an instrument of foreign policy, while membership is an
instrument of ‘domestic’ policy. Both are based on bilateral treaties with the third country.
Article 49 of the EU Treaty (TEU) regulates the admission of an exclusively European state.2
The European Council appoints the details of the accession process. At the Copenhagen Summit
in 1993, the Council developed criteria for accession in view of the accession aspirations of the
Central and Eastern European transition countries. The previous enlargements of the then
European Economic Community (EEC) - "Northern Enlargement" in 1973 (Denmark, Ireland,
Great Britain) and "Southern Enlargement" (Greece in 1981, Spain and Portugal in 1986) had
still taken place without these criteria, the following "EFTA Enlargement" (Finland, Austria,
Sweden) in 1995 did.
Article 49 TEU makes no reference to association as an instrument of EU accession or
even as a precondition for accession. Association of a third country is regulated in various
articles of the Treaty on the Functioning of the Union (TFEU). Article 217 states: 'The Union
2 EU jurisdicon does not provide a definion of ‘Europe ‘.

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may conclude with one or more third countries or international organisations agreements
establishing an association involving reciprocal rights and obligations, common action and
special procedure'. Article 218(6 and 8) TFEU states that an Association Agreement negotiated
by the Commission requires the unanimous consent of the European Council and of the
European Parliament. Part IV of the TFEU also provides for the association of territories of
member countries, but this is not dealt with further here.
According to a 1986 ruling of the European Court of Justice (ECJ) in the Demirel case,
an agreement based on Art. 217 TFEU creates 'special privileged links with a non-member
country,' allowing the third country concerned to 'take part in the [Union] system'.3 An
association agreement thus creates a contractual state that lies between membership and other
bilateral treaties such as trade agreements. Unlike the latter, an association agreement implies a
privileged relationship of a non-member country in the political practice of the Union vis-à-vis
third countries, with three main features:
(1) The defining aspect in Article 217 is 'common action and special procedure', which
in practice means the creation of common institutions with competence to take binding
decisions.4
(2) These decisions form an integral part of the EU legal system, as stated in another
ECJ decision of 1989 on relations with Greece.5 This allows for a deepening of the association
beyond the original content of the agreement itself (but evidently within this framework). This
means that the association can be further developed through decisions of the joint institutions
(association councils) - as happened, for example, in the case of Turkey, whose association
agreement was supplemented by a customs union through Decision 1/95 of the Association
Council.
(3) While Article 217 TFEU is not explicit on the possible scope and depth of the
privileged relation established by an association agreement, the Court (again in the Demirel
case) noted that Article 217 TFEU empowers the Union "to guarantee commitments towards
non-member countries in all the fields covered by the Treat[ies]. "As a result, the Court draws
a parallel between the EU's internal scope of action and the relation it may set up with an
associated country or international organisation. This implies that the instrument of association
can develop in line with the evolution of EU integration itself and with the international context
3 See Case 12/86, Demirel, ECLI:EU:C:1987:400, para. 9.
4 Here, I follow Van Elsuwege and Chamon (2019, pp. 10-14) in their study of the Ghent European Law
Instutes, Ghent University, commissioned by Commiees for Constuonal Affairs of the European Parliament
(AFCO).
5 Case 30/88, Greece v. Commission, ECLI:EU:C:1989:422, para. 13.

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in which the EU operates.6 Association agreements must be ratified by the European Council
and by the member states of the EU. This implies that the member countries must also
incorporate the agreements into their economic order through their own constitutional
procedures.
The relationship privileged on the basis of an association agreement can take various
forms (and names), ranging from little more than a free trade agreement to a level of integration
approaching membership. In other words, Art. 217 TFEU is a rather flexible instrument that
allows for a variety of links of the EU with states interested in a formal relationship with the
Union.
It should be underlined, however, that the TFEU does not contain a link to Article 49
TEU; association thus does not establish a legal claim to EU membership, nor is it, as is
sometimes read,7 membership of the EU below ‘full’ membership. Partial membership is not
provided for in the EU Treaties.
3. ASSOCIATION AS A PRE-ACCESSION INSTRUMENT
The admission of a country to the EU is also possible without prior association.
Examples of this are the "northern enlargement", but also the admission of Spain and Portugal,
which, with the exception of Spain, were EFTA members. In practice, no country has been
admitted to the EU after 1986 without a previous association agreement. What was still the
exception in the case of Greece and Turkey (both Association Agreements contained the
identical clause that EEC support should promote the accession of the associated country at a
later date) has become common practice at the latest since the Europe Agreements with the
transition countries. Even the fulfilment of the three Copenhagen criteria by the candidate
country is not legally binding for admission. What is decisive is how the EU sees its own
absorption capacity, which, as I said, is an 'internal political matter'.
The Europe Agreements showed how effective this "fourth" criterion for enlargement
can be. Originally, the European Communities (EC) entered into the negotiations with the
intention of designing the Europe Agreements as an alternative for EU membership. In addition
6 For example, monetary cooperaon might become necessary smothing too strong fluctuaons of the
associated country‘s exchange rate against the Euro triggered by its monetary policy.
7 Recently found in a 2002 report by the Konrad-Adenauer-Sung on the SAA with Croaa.
hps://www.kas.de/de/laenderberichte/detail/-/content/erster-schri-zur-vollmitgliedscha-in-der-eu;
accessed 31/7/2023.

6
to the success of a political and market-economy turnaround in the former communist countries,
which was still considered uncertain, the EC itself was in a major reform phase on its way to
the EU (key words: political union, internal market, monetary union), which had not yet been
completed with the EU Treaties at that time. Confronted with the urgent desire of the Central
and Eastern European transition countries, the EC accepted in the course of the negotiations the
mention of membership in the preambles of the agreements in carefully weighed formulations,
according to which the ultimate goal of the associated countries is accession to the EC ‘and
that association, in the views of the parties, will help the associated countries to achieve this
objective' (Maresceau 1993). The reluctance of the transition countries to join encouraged
commentators to consider the countries' accession to the EEA (Maresceau 1993, p. 233;
Gabrisch and Werner 1995, pp. 89-93). Three arguments were put forward: First, membership
in the EEA would bring significantly greater economic benefits to the countries than their status
as a separate association country. Second, their involvement in economic policy coordination
would help the EU achieve greater economic policy stability, especially currency devaluations.
And third, the EC/EU would gain time for necessary reforms. But by admitting the countries
to the EU in a first wave in 2004 (Poland, the Czech Republic, Slovakia and Hungary) and then
2007 (Romania and Bulgaria), the Europe Agreements proved to be de facto political pre-
accession instruments.
The agreements that the Union concluded with the EFTA countries to create a European
Economic Area, after Denmark, Ireland, Great Britain and Portugal had already left EFTA
earlier, are by their legal nature bilateral association agreements concluded under Art. 217
TFEU 1994/95. However, they were conceived much more clearly than the Europe Agreements
- as an alternative to EU membership. In their preambles, the goal of membership is neither
mentioned expressis verbis nor hinted at in diplomatically tortuous language.
Although conceived as an alternative, the possibility of applying for EU membership is
of course always open to an EEA-EFTA country. Finland, Austria and Sweden joined the EEA
as EFTA members on 1 January 1994 and became EU members on 1 January 1995. The
application for EU membership had already been submitted by the Austrian government in
1989, that of Sweden and Finland in 1991, i.e. the accession process took 5 and 4 years
respectively, and the EEA actually served - as a one-year – transit period used for further
adaptation to EU rules that did not correspond to EFTA rules, for example the transition from a
free trade area to a customs union and preparation for the later monetary union. In this respect,
the EEA took on the character of a de facto political pre-accession instrument for these three
countries and has retained its original destination as an EU alternative only for the three

7
remaining EFTA countries Iceland, Liechtenstein and Norway. (The EFTA member Switzerland
did not join the EEA and has concluded bilateral treaties with the EU.)
The EFTA-EEA agreements are of interest when considering the accession aspirations
of the Western Balkan countries because they are the most far-reaching association agreements
to date and the question arises as to whether EEA membership could not only give this accession
aspiration a special boost, but also give the EU time to implement its own reforms, as it did
with the Europe Agreements at the time, which could improve its own absorption capacity.
According to the Preamble and Article 1 of the EFTA-EEA Agreements, these aim at
‘the fullest possible realization of the free movement of goods, persons, services and capital’,
equal conditions for competition as well as strengthened cooperation with respect to so-called
‘flanking policies’ such as research and development, the environment, education and social
policy. For this purpose, the EEA involves a sophisticated institutional structure ensuring the
homogenous interpretation and application of the shared legal rules (Baudenbacher 2008). What
separates the EFTA-EEA countries from membership of the Union, however, is the full
implementation of the EU's internal market, including monetary union and customs union, as
well as the current arrangements for political union, i. e. participation in the Union's decision-
making. In fact, this is a form of 'integration without membership', but it implies that the EEA
countries are under a direct legal obligation to apply selected parts of EU legislation 'as if' they
were part of the EU’ (Maresceau 2013). In other words, the participating countries have become
'virtual' EU members, applying the entire single market legislation by analogy.
The functioning of the EEA is based upon a two-pillar institutional structure with the
EU and its institutions, on the one hand, and the EEA EFTA States and their institutions, on the
other hand.8 Between the two pillars, a number of joint bodies have been established by the
EEA Agreement including the EEA Council (representatives at ministerial level), the EEA Joint
Committee (representatives at civil servant level), the EEA Joint Parliamentary Committee
(representatives at parliamentary level) and the EEA consultative committee (representatives
of the social partners). All EU legislation with EEA relevance, i. e. concerning an area covered
by the EEA agreement, is incorporated in the annexes or protocols to the agreement.
Considering the dynamic development of EU law, the common rules of the EEA Agreement
are subject to constant revision. Following the adoption of new EU legislation, it is the task of
the EEA Joint Committee to amend the annexes as soon as possible in order to secure the
homogeneity of the common rules.
8 For the following see Van Elsuwege and Chamon 2019, p. 28.

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The EEA Agreement does not grant an EEA EFTA state any decision-making powers
within the EU Institutions. Such powers at the EU level cannot be granted on the basis of
association and are part of the prerogatives of EU membership. This basic rule stems from the
autonomy of the EU legal order and has i. a. been reiterated in the framework of the Brexit
discussions.9 However, they play a role at the level of ‘decision-shaping’ in the sense that
representatives of the EEA EFTA States are involved in the preparation of EEA relevant
legislation. They have a right to participate in expert groups and committees of the European
Commission and should be consulted in the same manner as EU experts. Moreover, they have
the right to submit comments on legislative initiatives, which are officially noted by the EEA
Joint Committee after they have been sent to the relevant.
4. SAA WITH WEST BALKAN STATES AS PRE-ACCESSION INSTRUMENTS
In contrast to the Europe Agreements and even more so to the EFTA-EEA Agreements,
the SAAs emphasise the 'European perspective' for the Western Balkan countries. The
preamble of five of the six SAAs (Kosovo being the exception) states 'RECALLING the
European Union's readiness to integrate to the fullest possible extent (name of country, H.G.)
into the political and economic mainstream of Europe and its status as a potential candidate for
European Union membership ....'. The goal of candidate status did not appear in the afore
mentioned agreements. In this respect, the SAAs can be regarded as de facto pre-accession
instruments. This role is underlined by additional instruments for pre-accession assistance, the
so-called IPAs, through which the Union has supported reforms in the region with financial and
technical assistance since 2007. In the agreement with Kosovo, however, there is no mention
of Kosovo as a potential candidate for accession, which is related to the careful avoidance of a
state recognition of Kosovo by the EU.10 On the other hand, Kosovo also benefits from IPAs,
which, however, does not legally prejudge any promise of candidacy or accession.
9 the European Council guidelines on the framework for the future EU-UK relaonship explicitly provide that “the
Union will preserve its autonomy as regards its decision-making, which excludes parcipaon of the UK as a third
country in the EU Instuons and parcipaon in the decision-making of EU bodies, offices and agencies.’ Van
Elsuwege und Chamon (2019, p. 29).
10 The preamble reads: ‚NOTING that this Agreement is without prejudice to posions on status and is in line
with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaraon of independence ….’

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Despite the explicit perspective as a potential candidate country, the SAAs do not form
the basis of a 'virtual membership' annexed to the EFTA-EEA agreements. Rather, they have a
conditional transitory character, reflected in their time limit of 5-10 years depending on the
country. The successful implementation of the Association Agreement within this period and
designed by stages is measured by the fact that each country negotiates with the other SAA
countries in the face of Yugoslavia's disintegration conflicts on the establishment of political
dialogue, free trade, mutual concessions on free movement of workers and services, movement
of payments and capital, cooperation on justice, freedom and security. This is a remarkable
contrast to the Europe Agreements, where conditionality was more implicit and focused on
economic and political reforms. As far as the countries' influence on EU decision-making
processes is concerned, the same applies here as in the case of the EFTA-EEA countries: they
have no voting rights in the European Council, Council of Ministers, or European Parliament.
The relatively close dovetailing between EFTA-EEA and EU institutions is also not to
be found in the SAAs, so that even decision-shaping is lacking. Like the EEA agreements, all
treaties provide for an SAA Council, a Parliamentary Council and a Committee. However, these
bodies are exclusively responsible for the implementation of the agreements. In all cases except
Kosovo, the SAA Council is made up of representatives of the European Council and the
government of the country concerned. In the case of Kosovo, the provisions follow the EU's
general diction of verbally avoiding state recognition. Here the treaty speaks only of
"representatives" of both sides, whose tasks are to evaluate progress in the association process
and to decide on entry into the next phase of the agreements. Unlike the EFTA-EEA
agreements, the SAAs do not provide for participation and consultation in EU expert groups
and committees, nor do they have the right to comment on Union legislative initiatives.
5. CONCLUSIONS: FURTHER EVOLUTION OF SAAs
The options for an enlargement of the Union - and the political elites not only in the
Western Balkans but also in all other current and potential accession candidates know this -
depend on the Union's capacity to admit new members. Enlargement in the current state of the
Union and in view of the many global and internal crises entails the danger of "overexpansion",
as Paul Kennedy analyzed in his book The Rise and Fall of the Great Powers in the Interplay
between Economic Change and Military Conflict from 1500 to 2000 (Kennedy 1987).
Overexpansion would lead to an end of European integration. The sometimes talked about
gradual admission into the EU - depending on the successful closing of chapters in the

10
negotiation process - overlooks the problem of absorptive capacity and is one-sidedly oriented
towards accession capacity of candidate countries.
Two options offer a way out. The first is to downsize the Union into an economic
community and to dismantle the technocratic bureaucracy in Brussels following the principle
of subsidiarity, to a state similar to that of the European Communities in the 1980s. A
comprehensive political union would then no longer be on the agenda as a European project.
Membership would essentially be membership in the internal market together with flanking
policies (such as foreign trade and agricultural policy). This, it must be said, "Orbanisation" of
the Union would undoubtedly defuse many conflicts, which primarily revolve around the
restriction of national sovereignty in political matters (Calliess 2023) and might accommodate
the accession wishes of the Western Balkan countries. Negotiations with Northern Macedonia
could be concluded relatively quickly if the total of 35 chapters were "purged" of overly rigid
political and legal adaptations to EU law. However, a number of objections can be raised against
such a supposed dismantling of the Union (I have written about this in Gabrisch, 2023), perhaps
the most important of which is directed against an overly theoretical understanding of
subsidiarity. With a national economic, monetary and fiscal policy and, for that matter, also
migration policy, the global crises that are spreading through the global networks can no longer
be warded off nationally.
The second option is the targeted further evolution of the Union into a political union,
as proposed by many commentators from academia and media. However, it is precisely the
indeterminacy of the reform debate in the European political arena that is the reason for the
delay in the accession process of the Western Balkan states. Since this will not change in the
short term, the accession candidates can only wait patiently. However, there are opportunities
to strengthen their integration into the existing Union: Following the above-mentioned legal
interpretation of Art. 217 TFEU, which allows for a further institutional evolution of the
Association Agreements, SAAs could be further developed in two directions that would make
them a de-facto transit area for eventual EU accession: Customs Union and decision-shaping.
The former had been part of the Association Agreement with Cyprus since 1984, and with
Turkey since 1995. The EU thus has experience in coordinating the financial policies resulting
from a customs union with a non-member (money laundering, organized crime, human
trafficking, etc.); Western Balkan states would thus be an integral part of an important area of
economic policy coordination and participation. A customs union does not have to cover all

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trade but can also include only selected trade sectors. With respect to the second option, there
is also experience with the EFTA-EEA relations, in which the possibilities of decision-shaping
for the EFTA countries go beyond those contained in the SAAs. EEA membership itself, as was
also proposed,11 would then make little sense, because it presupposes accession to EFTA and
thus doubled accession negotiations.
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