WESTERN BALKAN CRISIS

The war in Ukraine urges the European Union to get increasingly concerned with the protection of its south-eastern flank from the influence of Russia and China. This in turn encouraged the enlargement sentiments within the EU, although recently the leading member states have been reluctant to welcome new members. This phenomenon was later called the 'enlargement fatigue', due to the different levels of economic development and institutional quality of countries. Some EU members have demanded reforms in the union before accepting new members states.

The accession of the Western Balkan countries of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Northern Macedonia and Serbia has virtually stalled for years, although it has been on the agenda for 20 years. The admission of new members has never been the main issue that required an immediate solution.

Despite the eurozone crisis in the early and mid-2010s, the 2014 Russia-Ukraine conflict, the 2015-2016 wave of refugees, the coronavirus pandemic and economic problems, there has always been a more important issue that pushed the so-called backyard of Europe further down the list of urgent issues.

Emmanuel Macron, who became the president of France in 2017, initially insisted on the early accession of the Western Balkan states to the union, but later faced opposition from Spain, Greece and other countries, as well as waning interest from Angela Merkel. Also, he soon found himself on the radar of right-wing French politicians, who grumbled about the allegedly large number of Muslims in Europe, and became unexpectedly negative about admitting Albania to the union.

In addition, there are bilateral disputes involving member and candidate countries that further complicate the situation. For example, the historical conflict between Bulgaria and Northern Macedonia, language and national identities, tensions between Serbia and Kosovo, Slovenia and Croatia, and Greece and Northern Macedonia. In addition, Spain, Greece, Romania, Slovakia and Cyprus still refuse to recognise Kosovo's independence.

Finally, participants of the EU-Western Balkans summit held last year to also mitigate the growing frustration in the region argued over whether the final declaration should contain the word ‘enlargement’.

The EU is the largest partner

However, with a combined GDP of about $127 billion, the Western Balkan economies have long been closely integrated with the EU. The EU is their largest trading partner (more than two-thirds of trade in the region), the largest source of foreign investment and other financial flows, and a major destination for external migration.

Monetary and financial systems in the region are heavily dependent on the Euro. Kosovo and Montenegro have adopted Euro as their national currency, Bosnia and Herzegovina has a currency fund denominated in Euro, while the exchange rate of the Macedonian denar depends on the Euro too. Banks in all these countries are largely owned by foreign investors, mostly from the EU.

This close economic relationship has been further strengthened thanks also to respective association agreements with the EU, which also include provisions on the development of deep and comprehensive free trade area.

In addition, the EU is actively developing a horizontal free trade network. EU neighbouring countries are the dominant trading partners of each Western Balkan country, together accounting for at least 70% of their total trade.

Vetoing sanctions against Russia

Russia stands out among other economic partners of the Western Balkan countries, as it has a track record of energy supplies to these countries, especially Serbia, Macedonia and Bosnia and Herzegovina.

Serbia has perhaps the closest ties with Moscow. Gazprom owns a controlling stake in NIS, the country's main oil company. Last year, the two countries held joint military exercises near Belgrade. As in 2014, the Serbian government does not want to impose trade and financial sanctions against Russia. Despite the European Commission's efforts to reduce imports of Russian natural gas, Serbia continues to import it from Russia and even signed a new supply deal with Moscow. Belgrade also refused to stop flights of its national carrier Air Serbia to and from Moscow. A poll held this summer showed that 51% of Serbs would vote against the EU membership in a referendum, while 40% of respondents praised Russian leader Vladimir Putin.

Yet Serbia hardly balances on the fine line, condemning Russia when necessary. For example, Belgrade supported a UN General Assembly resolution condemning Russian invasion of Ukraine and even imposed some symbolic measures against Belarus and the family of former Ukrainian President Viktor Yanukovych.

In Bosnia, administratively composed of two parts—Republika Srpska (RS) and the Federation of Bosnia and Herzegovina—there is a strong split in political elites over Russian interference in internal affairs, according to German Deutsche Welle. Russia supports both Bosnian Serb leader Milorad Dodik and Bosnian Croat leader Dragan Covic.

Dodik says he respects Vladimir Putin and has openly supported the Russian invasion of Ukraine. Moreover, the president of Republika Srpska believes he should learn from Ukraine's so-called ‘referendums’ on joining Russia. Milorad Dodik meets regularly with Vladimir Putin, has inagurated a representation office of Republika Srpska in Moscow and hosted a business forum with Russian businessmen in September. Thanks to his efforts, Gazprom Neft and Zarubezhneft practically control the energy sector of RS.

Despite the formal support of Bosnia and Herzegovina to the EU sanctions against Moscow, this decision is not applied in practice, as Dodik has effectively vetoed any punitive measures against Russia.

Chinese alternative

China's activity in the region is also a growing concern for the EU amid the ongoing reassessment of relations with the world's second-largest economy. It has been a few years since Beijing has infiltrated the Western Balkans as part of its ambitious Belt and Road investment programme offering an attractive alternative to countries tired of waiting for the EU admission.

In general, the Balkan Investigative Reporting Network (BIRN) estimates that China has been involved in 136 major regional projects between 2009 and 2021 with a total value of more than €32 billion.

But along with money and investment, China also brings to these countries many problems. For example, Montenegro is struggling to pay back the Chinese loan taken in 2014 to fund a controversial road project that remains unfinished. This is striking example of the unfavourable conditions associated with Chinese investment. And it was the EU that made Podgorica ask for help to repay the crippling debt.

Major achievement

After granting candidate status to Ukraine and Moldova this summer, Brussels quite expectedly was criticised by the Western Balkan leaders extremely disappointed with their own lack of progress on the path to the EU membership. Nevertheless, there was some progress in the past few months between the EU and the Western Balkan countries. The main achievement is the first-ever summit between EU and Western Balkan leaders, which took place on December 6 in Tirana, Albania.

During the meeting, EU heads of state went to great lengths to demonstrate to their junior partners that they had a future within the rich economic bloc that the EU happens to be, gave them concrete signs, not just promises, that they would definitely join the union.

The talks also focused on a closer alignment of foreign and security policy with the EU, including pressure from Brussels on Serbia and Bosnia to accept Western sanctions against Moscow. EC President Ursula von der Leyen reminded the leaders of the Western Balkans, in rather strong terms, who should be their true partner and demanded them to determine their side.

The summit ended with the adoption of the Tirana Declaration, which uses the term ‘enlargement’ again. The EU reaffirmed its full and unequivocal commitment to the membership of the Western Balkans in the European Union.

Reconciliation project

In recent decades, the project of European unification seemed to rely mainly on the economic progress. However, the rationale of the European Coal and Steel Community back in 1952 was to support cross-border cooperation in order to consolidate peace in Europe. The founders of the European project succeeded in creating a truly successful reconciliation project.

We have yet to see whether the Russian-Ukrainian war transforms the current state of the EU and its enlargement process to substantiate the idea of the European Union as a community for peace.