The Regional Economic Area: An EU Mirage?

On Saturday August 26, EU Commissioner for Enlargement Johannes Hahn attended an informal meeting hosted by Prime Minister Edi Rama for the prime ministers of the “Western Balkans Six”: Serbia, Bosnia & Herzegovia, Kosovo, Montenegro, Albania, and Macedonia. The meeting focused in part on the implementation of the Regional Economic Area (REA), agreed during the recent Trieste Summit.

During a press conference held after the meeting, Commissioner Hahn stated that the “implementation of the regional market is key to unlock opportunities of millions of people and boost EU path.” In other words, the REA is a plan hatched by the EU to keep the Western Balkans busy until miraculously a majority of EU citizens is no longer opposed to enlargement and the populist resentment that feeds off that opposition has vanished in thin air.

According to the Consolidated Multi-annual Action Plan for a Regional Economic Area in the Western Balkans Sixthe implementation of the action plan, which is planned until 2023,

will enable unobstructed flow of goods, services, capital and highly skilled labour, making the region more attractive for investment and commerce, accelerating convergence with the EU and bringing prosperity to all its citizens.

One of the impressions one might get from reading the Action Plan is that the Western Balkans Six would already be a rather homogeneous group, with similar structural problems. To large extent this is true. However, it is not economic differences that threaten the implementation of the Action Plan, it is the political relations – both with the EU and among the six countries.

Let us start with the relations with the EU. Serbia and Montenegro have already opened accession negotiations with the EU, Albania and Macedonia are official candidates, whereas Bosnia & Herzegovina and Kosovo or potential future candidate states. It is therefore likely that Serbia and Montenegro will become EU members before the other four countries. This implies in turn that the political fates of the Western Balkans Six are not tied to each other; the countries do not depend on each other to make the REA work. The countries closer to EU membership have less incentive than those furthest away from it. This was already clear from the Serbian representative sent to Tirana on Saturday, Prime Minister Ana Brnabić, who is irrelevant compared to President Aleksandar Vučić.

Moreover, Serbia and Bosnia & Herzegovina do not recognize the state of Kosovo, which is currently still involved in an unsolved border dispute with Montenegro. The recent attempts of Serbia to reopen a “broad discussion” on the recognition of Kosovo, which is still without a functioning government, is so far not going anywhere fast. Meanwhile, Serbia is still blocking the electrical interconnection line between Albania and Kosovo. Bosnia & Herzegovina is increasingly becoming a failed state. And also recently, Macedonia and Serbia had their own diplomatic conflict, the source of which is still a matter of discussion.

All of this is to say that the European Union, unable to learn from its own mistakes, is using economic integration as a pathway toward political integration, both within the Western Balkans and with the EU. The Greek crisis as well as the EU-wide rise of populist resentment should have shown EU bureaucrats that economic entanglement and development of a single, open market did not make the political differences between EU countries disappear. In fact, they seem only have become more pronounced.

By imposing the same “integration process” on the Western Balkans, the EU is playing a dangerous game: the asymmetric EU accession paths, persistent political and ethnic tensions, and markets that are all defined by widespread informality and corruption cannot be wished away by removing “bureaucracy” and “opening up” the markets. Instead of collaboration, it will become a scenario in which the winner (those closest to EU membership) takes all, and losers will have even less.