EU changes its economic approach toward the Balkans


The Union sets new criteria for membership candidate countries and potential candidates.

By Linda Karadaku for Southeast European Times in Pristina -- 21/04/14


The European Commission will issue new country-specific recommendations in May. [European Commission]

The EU is changing its economic approach toward the western Balkan countries to make their economies more functional and closer to the EU's standards.

The Union now requires regional countries to strengthen the co-ordination of economic reforms while it provides greater financial and policy support to make them more attractive to investors.

EU officials said none of the countries presently meet the economic accession criteria, which include a functioning market economy and the capacity to cope with competitive pressures within the EU.

"The new approach will help first address fundamentals and better guide the enlargement countries toward meeting the criteria. It implies a change in the dialogue and improved reporting in order to give clearer guidance on the reforms needed to support long-term growth and competitiveness," Peter Stano, spokesperson for EU Commissioner Stefan Fule, told SETimes.

Stano said the countries are now invited to prepare annual national economic reform programmes and bi-annual competitiveness and growth programmes. They will replace the existing pre-accession economic programmes (PEPs) for EU membership candidate countries and economic and fiscal programmes (EFPs) for potential candidates.

"Reforms addressed in these documents will be underpinned by IPA assistance," Stano said.

The EU also requires that Balkan countries develop competitiveness and growth programmes for reforms in transportation, energy, education, environment, research, industry, competition and internal markets. The EU will particularly support efforts at reforming public administration and improvements of tax collection capacity, Stano said.

"The European Commission will engage with the countries in a new dialogue on public financial management, which will support progress toward meeting the economic criteria and is a pre-condition for using IPA funds in the form of budget support. The countries will need to draw up action plans in this field, which will be monitored by the Commission," he said.

The European Commission will use its autumn progress reports to assess these programmes and provide guidance. The dialogue will be based on newly established national economic reform programmes beginning next year to jointly agree on a set of country-specific recommendations to guide reforms.

The IMF will provide technical assistance to support implementing the recommendations.

Beginning next year, the Commission will invite the countries to provide a comprehensive overview of their structural reform plans for sectors of greatest concern every two years.

"[The new approach will help] each state to achieve a certain level of economic development, not only to be an EU member, but also to be more functional and competitive within the EU market," Fatmir Curri, programme director at the Kosovar Civil Society Foundation in Pristina, told SETimes.


Citizens said they hope the new EU approach will improve their countries' economies. [AFP]

Serbia will have more time to prepare to assume responsibilities in the economic field, said Maja Poznatov of the EurActiv Media Network in Belgrade.

"Serbia would get recommendations on what needs to be done on the path to the EU, i.e., it will have some kind of guide. The new approach in the EU should not be surprising after the experience with the economic crisis that has raised the issue of budget discipline and the need for better supervision and harmonisation within the EU," Poznatov told SETimes.

Tanja Miscevic, the head of the Serbia's EU negotiating team, said not enough people in Serbia know how to create a project that is eligible to receive EU pre-accession or other funds -- one that is complete with a clear plan and budget goals in English.

"What we know is that we need people who will stay long in this job. This is a job that is hard to learn, but that is one of the most important in European integration," Miscevic told SETimes.

Bosnia and Herzegovina (BiH) already has started to work on the new conditions, according to officials of the country's European integration directorate.

"We will create a special strategic document that will define goals with which we will fulfil the conditions set up by the EU," Nevenka Savic, director of the directorate, told SETimes.

Savic said this document will cover employment policy, create a better investment environment and describe how to better use EU funds.

Macedonia also needs to gradually carry out reforms, particularly regarding monetary, fiscal and customs policy, said Tome Nenoski, a professor at the University American College Skopje.

"Positive steps have already been taken, such as the customs policy that was mostly aligned with that of the EU and the WTO [World Trade Organisation] standards," Nenoski told SETimes.

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Citizens welcome the EU's new approach and are hopeful it will improve their living standards, said Resad Ismirovic, 38, a web designer from Sarajevo.

"That is why it is very important that the EU continues to pressure local politicians to consolidate the country's economic system and to ensure better living standards for all. When we set up the appropriate incomes, then we can talk about the politics again," Ismirovic told SETimes.

Correspondents Igor Jovanovic in Belgrade, Drazen Remikovic in Sarajevo and Miki Trajkovski in Skopje contributed to this report.

What can Balkan countries do to better align their economies with the EU? Share your opinion below.

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