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Geopolitics and loans: The EU does not want to lose the Western Balkans

Point of View, 05.05.2020 Research Areas

The European Commission promises 3.3 billion € to help the Western Balkan countries mitigate the impact of the pandemic and bring them closer to the EU. Without a fundamental change of direction, however, this initiative comes too late, says Dušan Reljić.

When EU leaders and their counterparts from the Western Balkans meet on 6 May for a video conference, the focus will be on a €3.3 billion aid package from the European Union. The planned level of financial support for the countries of south-east Europe is proof, the Commission has said, that the EU is taking decisive action in the face of the crisis. In addition to emergency aid to address the health crises and the resulting humanitarian needs, a substantial “economic and investment plan" will be presented in the autumn, with measures in the areas of health, education and social policy aimed in particular at social development. According to the Commission, the assistance package goes far beyond what any other partner has provided to the region, as the Western Balkans is "a geostrategic priority" for the Union. Apparently, the "geopolitical Commission” (President Ursula von der Leyen) now wants to send a clear signal in south-east Europe. Because, according to the German Foreign Minister Heiko Maas, "without the Western Balkans, the European project is unfinished", it is surrounded by EU states, therefore no uncertainty and instability should be allowed there.

Friend and brother Xi Jiping

However, the EU's ability to assert itself in the Western Balkans and especially in the largest and politically most important state in the region, Serbia, seems to have weakened since the outbreak of the pandemic. The region's news media initially reported mainly on the arrival of medical aid shipments from China, Turkey or Russia. EU solidarity is a fairy tale, rumbled Serbia's strong man, President Aleksandar Vučić. The immediate cause for his displeasure was the Brussels decision not to exempt the Western Balkan countries from an export ban on personal medical protection equipment to third countries, which was imposed on 19 March 2020. Shortly before the Commission's Communication on the Western Balkans Summit, the export of these goods was released for the region.

The fact that Vučić allowed himself be carried away in a ham-fisted attempt to thank the Chinese people in Chinese in front of running cameras, kissing the Chinese flag and ingratiatingly calling the Chinese leader "friend and brother XI Jiping", can only partly be interpreted as an immoderate attempt to curry favour. In point of fact, the perception has spread in the Western Balkans that the aspired EU membership cannot be the panacea for the region's persistent problems.

The region's strong integration with the EU, especially through German and Italian companies, has not only advantages. As a result of the crisis in the Union, demand for products and services from the region is declining (the EU accounts for over 70 percent of external trade), investments from the EU are mostly on hold, and migrants' remittances to their homelands are falling. The World Bank expects economic output in the Western Balkans to decline by up to 5.7 percent this year. Even in the best economic situation in the EU, however, the Western Balkans will not be able to raise enough investment to achieve an annual growth of over six percent, the level necessary to catch up with the EU average in 30 years. For this reason, the region is increasingly looking to Asia, especially China, in the hope of attracting larger investments.

A change of direction is necessary

The announced EU aid package will be able to do little to change the fundamental problems of the region if the EU does not treat the Western Balkans as an integral part of the EU – for the “geopolitical" reasons mentioned above. This would entail, first of all, that the planned aid is not a one-off effort based mainly on loans rather than grants. In contrast to the "new" member states of the Union, the Western Balkan countries have so far not received robust, solidarity-based development aid to offset their trade deficit with the EU of over 100 billion euros, accumulated over the past decade. In order to change this, the region needs to be given access to the EU's structural and cohesion funds or a comparable source of zero-priced capital before membership, so that comprehensive and sustainable growth can begin.

Even if the EU takes a fundamentally different stance with this approach, it is unclear whether it is not 12 years too late: a similar push should have taken place after 2008/2009, when the international debt and financial crisis spilled over to the Western Balkans and hit the region even harder than the EU itself. In the meantime, two probably irreversible developments have taken place in the Western Balkans. Firstly, people have given up on the hope that they will experience prosperity. This is why they are emigrating en masse – in 2018, every two minutes a citizen of the Western Balkan countries received a residence and work permit in the EU, a total of 230,000 people.

Secondly, after the 2008 financial crisis, right-wing populist and authoritarian forces have regained the upper hand everywhere in the Western Balkans (Northern Macedonia is currently the exception). The democratic potential of these societies has further declined – among other things because of the ageing population and mass emigration, economic weaknesses and unresolved ethno-political conflicts. All studies by international democracy and human rights organisations point to this. Moreover, it is questionable whether Vučić and the other autocrats are prepared to peacefully relinquish power.

Consequently, after next week's summit, one dilemma will remain unresolved: should the EU, geopolitically motivated, ultimately wave the states through to membership, as was the case with the eastern Central European states? Or should the Western Balkan states only be allowed to continue their rapprochement with the EU after their governments have started delivering on the rule of law? Once the pandemic has subsided, parliamentary and other elections are to be held in Serbia, Montenegro, Northern Macedonia and Bosnia and Herzegovina. A thorough review of the democratic quality of these elections should be the basis on which the EU decides with which governments it wishes to continue the enlargement process and with which it wishes to freeze it for the time being.