The benefits of the EU’s Growth Plan for the Western Balkans
04/06/2024
In the margins of Europe Day celebrations, the WeBalkans team had the chance to meet with David Hudson, Senior Expert on Western Balkans Policy & Regional Strategy in DG NEAR at the European Commission. His work is to promote economic integration within the region, and he told us about the benefits of the EU’s Growth Plan for the Western Balkans. Continue reading to learn more about it!
What is the EU’s Growth Plan for the Western Balkans?
It is about making life better for citizens in the Western Balkans by creating opportunities for business and by expanding and accelerating the economic growth of the region. That is one of the key objectives of the Growth Plan, because there is a need for more economic growth, to create more jobs, bring investment in, and increase attractivity to businesses in the region.
But the Growth Plan has also a political objective: we want to speed up the accession process and the Growth Plan will contribute to that in two ways: firstly, because an increase economic growth means an increase in the resources available to governments to invest in the accession process. The second reason relates to the way the Growth Plan is constructed: it is based indeed on implementing and aligning with EU legislation, and in advancing in the work toward accession.
How will this plan make life better for ordinary people in the Western Balkans?
It will make life better because it will boost economic growth, which will improve people’s lives, since it will create new jobs and new opportunities but also ensure that the goods circulating within the region are of a better quality, safer and more affordable. In short, it will give more opportunities, both in the region and in the European Union, for citizens of the Western Balkans and their families.
Can you give examples of specific projects that will be started under this plan?
Let’s take one very current example that governments are working very hard on: the Single Euro Payment Area, or ‘SEPA’ as it is often called. In simple terms, it is an area in which there are very low fees for transferring Euros. But currently, if you are a worker from the Western Balkans working in Germany for example, there is a high cost in transferring money back to your family. The rates for doing that are very expensive while a similar transfer inside the European Union is very cheap. Becoming a member of the Single Euro Payment Area, as it is foreseen by the Growth Plan, could save households in the Western Balkans up to 500 million euros a year, based on the current transfers from family members abroad to back home.
How will the Growth Plan help create new jobs in the Western Balkans?
It will help create new jobs because it will increase the attractiveness of the region. It will notably simplify the possibility for exports to the European Union, both of finished goods and of what we call intermediate goods, which are goods that are produced in the region as part of a supply chain that then goes to European companies, like car parts or electronic components. Furthermore, it will enable the standards for the quality of goods to be recognized more easily in the future, which will also make the exports easier. In addition, it will help reduce the border queues for goods, which can currently be up to 16-18 hours long. By shortening the time spent at border queues, good will also become cheaper to export. All of this will make the region more attractive for potential investors. And more investment means more jobs and better paid jobs in higher value sectors. That will benefit the Western Balkan economy, its families, and citizens.
What opportunities will young people have thanks to the Growth Plan?
The Growth Plan will have a wide range of benefits for young people. One of the things that we want to do is extend existing agreements from a couple of years ago: the mobility agreements, the recognition of professional qualifications, and the recognition of academic qualifications. As I explained, with a bigger regional market, people will be able to find job opportunities matching their skills and expectations within the region. It will boost young people and stop the necessity of moving out elsewhere. And at the same time, we want to ensure that in the short term it will be possible for those who wish to get experience, to work outside the region, in the EU, but in a way which is advantageous to them.
Young people from the region will also be able to take advantage of concrete measures which should start soon, such as the Wi-Fi for the Western Balkans. This has been already done within the European Union: we funded Wi-Fi in municipalities across EU Member States. We want to do this for the Western Balkans as well. So, up to 500 municipalities will receive Wi-Fi in areas where they have not had it before, as of the end of this year or by the first half of 2025. This again will make the region more attractive, including also for tourists.
Besides short-term outcomes, what are the long-term benefits that people in the Western Balkans can expect from the Growth Plan?
Ultimately, it will speed up the path to EU accession. On the one hand, it is important to understand that the Growth Plan, by integrating the Western Balkans into the single market, will bring some of the economic benefits of accession to the region, before the date of accession itself. On the other hand, we are giving an incentive to take on board EU standards and to implement EU laws in advance of membership through the Growth Plan. Having adopted and implemented those laws will speed up the accession negotiations because the Western Balkan partners will be able to demonstrate that they are ready to join the European Union in those areas.
Last but not the least, how does the Growth Plan address environmental concerns and sustainability in the Western Balkans?
Environmental concerns are obviously very important and are therefore included in the Growth Plan’s logic. We already have a Green Agenda for the Western Balkans that the governments have agreed to. It is a blueprint looking at long-term sustainability and decarbonisation. We have now integrated the elements of the Green Agenda in the architecture of the Growth Plan, more specifically into what we call the Reform Agendas. They are agreements between the entities of the Western Balkans and the European Union, according to which the European Union will distribute funds once certain reforms are carried out: it is a wholly new way of managing our assistance. And there is an important focus on green reforms in these Reform Agendas, more specifically on decarbonisation and moving away from fossil fuels, so it will be a key incentive to do reforms addressing environmental issues and fostering sustainability.