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Boosting and connecting the Western Balkans on the EU path

Op-ed by Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement

7 October 2020

Op-ed by Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement

Belgrade, Podgorica, Pristina, Sarajevo, Skopje, Tirana. Six capitals of the Western Balkans, at the heart of Europe, but traveling and trading between them and to other capitals of Europe takes twice as long as between cities much further apart. Yet being connected is key: for the lives of the people, for businesses and for the economies of the region, even more so now when we need to boost the recovery after the COVID-19 pandemic. Moreover, the economic development gap between the region and the EU must be closed faster, which will also speed up the integration process of the countries in the EU.

These are the main reasons why the European Commission this week put on the table a large-scale Economic and Investment Plan for the Western Balkans. This Plan foresees to mobilise up to €9 billion of funding for investment flagships in the areas of transport, energy, green and digital transition, to create long-term growth and jobs. In addition, it aims to boost the investment capacity of the region thanks to a new Western Balkans Guarantee Facility, with the ambition to raise investments of up to €20 billion.

We need the Western Balkans better connected, be it by road or rail between capitals or with the European Union or through ultra-fast broadband internet. I firmly believe that this will help to create solid market economies by stimulating strongly and directly trade and investments. We also offer our cooperation in creating a knowledge-based economy through helping SMEs, start-ups and the research and development industries. These economies also need to work for the people: the mismatch between skills supply and needs of the labour market must be addressed and brain drain must turn into brain circulation, especially among young people.

The Plan is also launching a Green Agenda for the Western Balkans. Green and digital transitions are the EU priorities for its own recovery and we want to support the region, in tune with realities on the ground, so it addresses pollution problem and at the same time creates sustainable business opportunities across economies. There will be a strong focus on decarbonisation, clean energy, cleaner environment and digital transformation, including the deployment of ultra-fast broadband.

In the fast phase-out from coal, the transition role of gas is of utmost importance, next to renewables. Phasing out coal could largely reduce present public health hazards swiftly. We want to bring  gas to the Western Balkan to create diversity and to decrease dependencies, while long-term climate neutral solutions like hydrogen could be built on that basis.

International Financial Institutions stand ready to support our ambitious Plan. This support will be crucial to maximise the region’s huge potential to ensure the biggest benefits to the citizens and economies.

Through the Economic and Investment Plan, the Commission also aims to reinforce the regional dimension of our co-operation. Regional economic integration among the six partners is not a detour on the European path, but an outright economic opportunity to create growth, to overcome the COVID-related economic crisis, to modernise the economies in line with the EU priorities and bring them closer to the EU internal market.

The Economic and Investment Plan goes hand in hand with reforms. Reforms, in particular in the rule of law, remain at the heart of the enlargement process and are also needed to underpin this Plan, as they raise business confidence and create a better investment climate.

Together with the Plan the Commission also adopted the 2020 Enlargement Package, assessing the ongoing fundamental reforms in the Western Balkans, and presenting recommendations and guidance on the next steps for our partners. Their dynamic implementation will not only produce long-lasting results, it will also speed up progress on EU path.

The future of the Western Balkans is in the European Union. Since the first day of this Commission’s mandate, one point has been very clear: the region is a key priority for us. We are working tirelessly on bringing the region much closer and faster to the EU, pursuing three objectives: to reinvigorate the enlargement process, to open accession negotiations with Albania and North Macedonia and to speed up the economic convergence with the EU.

On the first two objectives, significant steps forward have been taken, with a revised enlargement methodology and the decision by Member States to open accession negotiations with Albania and North Macedonia for which the revised methodology proposal broke the ground. This has shown that the EU stands by its partners and delivers on its promises.

We also stood by the region during the COVID-19 outbreak, providing essential and unparalleled support, including emergency medical assistance and a financial package of €3.3 billion to address the direct consequences of the pandemic.

The new Plan is the third pillar of my approach. It will not only support the longer-term socio-economic recovery of the region and convergence with the EU, it will also increase intra-regional cooperation and trade and unleash the region’s untapped economic potential. Importantly, it will consolidate the region as an investment hub for European companies and put it on the map of investors who seek to reduce the distance to EU markets and diversify supply.

I am traveling to the Western Balkans this week to present the new Economic and Investment Plan as well as the annual assessments in person directly to our partners. I hope to get support for the implementation of the Plan as well as clear commitment on reforms and cooperation. We will do this together, aiming to create a new economic and social landscape already in the next five years.

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