'Frozen conflicts must be resolved' in Balkans
July 12, 2017
Deutsche Welle: The Western Balkans Summit in Trieste (July 12) aims to promote cooperation between governments and businesses in the Balkans. How would you assess the current situation?
Vladimir Gligorov: The EU strategy is as follows: economic cooperation helps the process of political normalization. But this takes a long time. In practice, none of the frozen conflicts in the region has been permanently resolved. This limits regional cooperation – political and economic. And then there is the problem of closed markets. The Balkan states have a relatively small share of exports in the production process.
This has been changing in recent years and interest in increased cooperation with the EU, and regional trade and investments, is growing. But since the markets are so small, there are no large companies in the region. This is why there are no major partnerships that can show strong presence in third markets. This would require foreign multinationals that are not active in the region.
Germany supports EU Enlargement Commissioner Johannes Hahn's plans to create a regional economic area. But not all Balkan countries are equally enthusiastic about this idea.
The Central European Free Trade Agreement (CEFTA) was reached decades ago to achieve this goal. The implementation of the Stabilization and Association Agreement between the countries and the EU are supposed to lead to the legislative harmonization with the EU. This is also the case with CEFTA. I am not sure whether everyone really understands that a common market in the Balkans is only possible in conjunction with the harmonization of markets and laws with the EU.
Serbia's President Aleksandar Vucic is a strong advocate of a western Balkan customs union. He believes that stronger economic integration will lead to a major step towards the EU. Do you agree?
One must understand that if they become EU members, all of these countries must adopt the EU's common customs strategy. Therefore, there are two possibilities: countries could adopt the EU customs duties, i.e., join the European Union Customs Union (EUCU), which is already a goal of EU accession. The second option would be for all the countries concerned to harmonize their agreements with third countries with the existing EU agreements.
The main problem in this process is the free trade agreement between Serbia and Russia, meaning the Eurasian Economic Union (EAWU). Either Serbia gives up this agreement, or all other members of a Balkan customs union reach an agreement with Russia and the EAWU. But this is not realistic. Serbia would have to give up the free trade agreement with Russia, but this will happen in the context of the EU accession negotiations anyway.
In order to make progress in these issues, political stability is required. Are the western Balkans ready for this brave step forward?
The frozen conflicts and other disputes must be resolved. This applies in particular to Kosovo, and Republika Srpska, the Serbian part of Bosnia and Herzegovina. Everything depends on Serbia's willingness to normalize its relations. Perhaps a multilateral solution would be realistic in order to reach a regional agreement on the inviolability of borders. The EU could play a major role, especially if the integration process were to be accelerated. Investments in the region are also important.
Will the integration be easier if the west Balkans approaches the EU as a region, or should each country stand up for itself?
The basic idea is that regional cooperation is of greater economic and political interest to the EU than a fragmented Balkan region. This should stimulate regional cooperation during the integration process. As a result, this would spark the interest of European companies in the region and would also reinforce Europe's political stability.
This does not mean that- in the event that their negotiations with the EU are resumed - countries such as Montenegro or Macedonia should wait for the other countries. I am of the opinion this would accelerate political normalization in the Balkans, especially the processes in Serbia.
Vladimir Gligorov is a senior economist at the The Vienna Institute for International Economic Studies and a lecturer at the University of Vienna. He is also an expert on politics and economics of Balkan countries, especially Serbia, Montenegro and Macedonia.