EU's Growth Plan for the Western Balkans – Economic development and opportunities for all

The Growth Plan for the Western Balkans is an offer from the European Union to membership candidates (Albania, Bosnia and Herzegovina, Kosovo,  Montenegro, North Macedonia, and Serbia ) to accelerate their accession process. The Growth Plan provides for a faster integration into the EU’s Single Market, while requiring stronger regional economic cooperation, which is expected to lead to an accelerated socio-economic convergence with the EU. To support these reforms, a fund of €6 billion has been prepared – comprising €2 billion in grants and €4 billion in concessional loans – conditional on the implementation of specific reforms and alignment of domestic legislation with the EU acquis.

It is estimated that the implementation of the Growth Plan could provide significant momentum to reforms, potentially leading to a doubling of the region’s economies over the next decade.

“The Growth Plan does not affect the ongoing accession processes, or the specific conditions set within those frameworks, particularly regarding fundamental principles. The Common Regional Market is an initiative agreed upon by the leaders of the Western Balkans  at the Berlin Process Summit in Sofia in 2020. This market, along with its accompanying action plan, aims to enable the free movement of goods, services, capital, and people within the region”, the Growth Plan states, emphasising that “speed is key” and that the plan is intended to help the region focus on their shared future as EU members and overcome bilateral challenges hindering progress.

Adi Ćerimagić, an analyst from the European Stability Initiative, explains that the EU is attempting to provide membership candidates with some of the benefits of membership in advance.

“One component is additional funding to narrow the gap between what EU members and candidate countries receive. However, this comes with the requirement of a detailed reform plan that covers not only the rule of law and economic reform, but also other areas such as public administration and public procurement reform, depending on each country’s needs. Another aspect is pre-accession benefits, with the expectation that candidate countries will adopt legislation and institutions enabling them to function as if they were members. A good example is SEPA, which allows banks in candidate countries to conduct euro transactions as if they were in the EU, without additional fees, but this requires adapting national legislation and banking regulations,” says Ćerimagić, noting that the essence of the Growth Plan is to offer candidates more money and more opportunities for their economies and citizens, based on the pace at which they implement reforms.

Professor Lejla Ramić-Mesihović, from the Department of International Relations at the International Burch University (IBU), says this represents a major opportunity.

The Growth Plan focuses on seven key areas: the free movement of goods, services and workers; access to euro-denominated payments; easier road transport; decarbonisation and energy market integration; a common digital market; and integration into industrial supply chains. Some of the opportunities created include new employment prospects, free public internet access, cheaper and faster money transfers (via SEPA), reduced border waiting times for road transport (green lanes), and digital hubs for start-up companies. The prerequisites for these benefits include harmonising border control legislation, signing the Convention on a Common Transit Procedure, reforming public finances in line with European standards, and mutual recognition of skills and qualifications between the EU and the Western Balkans – including professional qualifications, building on the existing mobility agreements.

The Growth Plan covers the period from 2024 to 2027, and the allocated funds will be distributed based on a formula that includes GDP, population, and several other criteria. According to preliminary estimates, Albania could receive €922 million, Montenegro €383 million, Kosovo €880 million, North Macedonia €750 million, Serbia €1.58 billion, while Bosnia and Herzegovina, once it finalises its reform agenda, could be eligible for €1.85 billion. At least 50% of the total amount will be directed towards investments through the Western Balkans Investment Framework (WBIF). The remaining funds will go directly to the governments of the Western Balkans, and access to the funds will depend on the progress made in implementing the reform agendas each country has developed.

Disbursements will take place twice a year, based on applications submitted by the Western Balkan governments, but only after the European Commission confirms that all conditions have been met – such as macroeconomic stability, sound public financial management, transparency, and budget oversight.

The Growth Plan was adopted on 8 November 2023, and by April 2025 the European Commission had approved the Reform Agendas of Albania, Kosovo, Montenegro, North Macedonia, and Serbia. Bosnia and Herzegovina has yet to receive the “green light.”

The Western Balkan governments have been warned that if they fail to meet payment conditions, the Commission will suspend or withhold the corresponding amounts. Furthermore, those that do not implement reforms within a year or two will be required to return the funds, which will then be redistributed to others.