Growth Plan and the Western Balkans: Do EU payment dynamics and political messages align, and what is required from Pristina?

The first tranches of the EU's promised Growth Plan have reached the Western Balkans, with Bosnia and Herzegovina and Kosovo as the only recipients still awaiting disbursement. The ambitious EU plan, worth around six billion euros, brings a significant economic stimulus to the region but also conveys clear political messages. For Pristina, the message is unambiguous: without institutional formation and cooperation in implementing agreements reached in the Brussels Dialogue, there will be no money, say interlocutors for Kosovo Online.

Written by: Djordje Barovic

The EU Delegation to Serbia announced late last week that the European Commission had disbursed €51.7 million, corresponding to the pre-financing portion allocated under the EU Growth Plan for the Western Balkans.

Serbia’s Minister for European Integration, Nemanja Starovic, stated that the payment is "the clearest confirmation of Serbia’s progress in the reform process."

"This is also the most effective rebuttal to all malicious claims about the EU halting support to Serbia. Serbia’s European future, which brings prosperity to all our citizens, cannot and will not be blocked," said Starovic.

Previously, Albania received €30 million, North Macedonia €24.4 million, and Montenegro €12.5 million in pre-financing.

Under the initial plan, Bosnia and Herzegovina was to receive approximately €70 million, but the process was frozen because its Council of Ministers failed to fulfill the agreed obligations or adopt the necessary legislation.

Kosovo has also not received a single euro, despite acting Foreign Minister Donika Gërvala claiming that Kosovo had submitted the Reform Agenda 2024–2027 and taken concrete steps to utilize Growth Plan funds.

The Group for Legal and Political Studies (GLPS) warns that over €800 million in Growth Plan funding remains blocked due to the failure to constitute Kosovo’s parliament.

"If institutions are not formed by July 1, Kosovo will be denied its first pre-financing tranche of €61.8 million from the Growth Plan, as well as another €32.8 million for reforms already implemented," the researchers state.

Stalemate

Tirana-based economic analyst Eduard Gjokutaj stresses that Bosnia and Kosovo are effectively in a stalemate with the EU.

He highlights that the EU uses both political and economic criteria when approving Growth Plan funds, and that the withholding of pre-financing tranches to Bosnia and Kosovo sends a clear political message.

"Bosnia and Kosovo are not benefiting from the Growth Plan funds primarily due to political problems and because they have not yet begun certain reforms or adopted documents that are crucial for launching such a large project. This is the EU’s way of saying they are currently stuck in a deadlock, which poses the greatest problem for their economic policies," Gjokutaj told Kosovo Online.

He explained that the Growth Plan is not only about each country’s economic alignment with the EU market but also about regional market integration.

"The criteria the EU applies to this plan are both political and economic, aligned with the strategic goals and priorities of the European Union. The EU expects each country to use its capacity to absorb and efficiently implement projects. Everything is measured by results, as in the EU accession process."

He noted that Serbia is the leading economy in the Western Balkans, which also influences the EU.

"Serbia is the leading economy in the Western Balkans. The second tranche it received aligns with this approach. The country demonstrated readiness to align its investment policies with those of the EU and should have received more funding, given the scale of its economy. That didn’t happen due to internal political challenges and limited results in fighting corruption and strengthening the rule of law," said Gjokutaj.

He believes that Albania received project funding thanks to progress in reforms and investments.

"Albania has made satisfactory progress in that regard and is currently in a strong political position in the Balkans, even at a leadership level. North Macedonia follows suit, properly implementing the Growth Plan. Montenegro is also progressing, although as a smaller country it faces greater challenges than others."

Based on the Western Balkan countries’ readiness to implement reforms and projects, Gjokutaj believes forecasts can be made for the future.

"Although Serbia has internal issues, it has met most of its reform obligations when needed. The same applies to Albania, which currently enjoys the best political moment among all countries, and from which others may benefit. However, the speed of implementation will depend on internal capacities. Albania needs to further strengthen these capacities," he noted.

Comparing Kosovo’s current situation to the 2014 institutional crisis, he warned:

"There were also delays in government formation back then, and internal issues that, if prolonged, lead to deeper complications. Given that Kosovo’s economy is weak, import-based, and urgently needs infrastructure and reform-related investments, the current situation is highly damaging. Not only because funds are not arriving, but also due to the erosion of political support, which harms not just one party but Kosovo itself on the international stage."

Two Obstacles

Alma Lama, an expert on European integration from Pristina, believes there are two main obstacles for Kosovo to receive its first tranche: parliamentary ratification of the agreement and implementation of the Brussels Dialogue.

"The reason Kosovo hasn’t started benefiting from the Growth Plan is the situation in parliament. The agreement must be approved there for the process to begin. While the EU has positively assessed Kosovo’s reform efforts, financial benefits—7% of the amount—depend on functional institutions. The fact that we still don’t have a parliament or government is very problematic," Lama told Kosovo Online.

She explained that the Growth Plan procedure is clear and requires parliamentary approval because it is an international agreement that must be ratified.

"Unfortunately, without parliamentary formation, this isn’t possible, and I consider that a major loss."

She added that the second obstacle is implementing the Brussels agreements.

"The Growth Plan—for both Kosovo and Serbia—is conditional upon agreement implementation and building relations. So, it’s not just about reforms common to all Western Balkan countries, but also about dialogue and executing what was agreed. Right now, the main issue is that the parliament is not functioning," said Lama.

Coherent EU Messaging

Marko Miskeljin, from the Center for Social Stability, believes the core issue lies in the EU’s coherent policy, which in Pristina’s case means no more tolerance for raising tensions or confrontation.

"This is a continuation of Europe’s coherent message: that institutional functionality is paramount, and that constant escalation and confrontational tactics will no longer be tolerated," he said.

Miskeljin claims that the blockade of Kosovo institutions is due to Self-Determination Movement leader Albin Kurti.

"The situation surrounding the constitutive session is merely a maneuver for him to retain power, and Europe sees this as abuse of the democratic process."

Regarding Serbia’s recent payment, he commented:

"This sends a message that Europe counts on Serbia, is satisfied with the reforms it has completed and those in progress. Also, it reflects satisfaction with meetings held in May with President Vucic, Speaker Brnabic, and Minister Starovic."

He expects further Growth Plan payments to be accompanied by new "political decisions and messages" from Brussels.

"Europe will closely monitor reform implementation, especially regarding legal harmonization and anti-corruption efforts. A key focus will be ensuring that regional dialogue and cooperation are not used as political theater but as instruments of regional stability."

Reform Dynamics

Skopje-based analyst Petar Arsovski agrees that the timing of Growth Plan payments will depend entirely on each country’s reform progress. He sees the European Commission’s decision to withhold Kosovo’s tranche as a clear signal to accelerate reform priorities.

"The main message the European Commission wants to send through Growth Plan disbursements is that it solely depends on candidate countries’ readiness. Reform adoption in Brussels is what drives the payment dynamics. Brussels wants to deal with meritocracy, not political favorites in the Balkans," Arsovski told Kosovo Online.

Commenting on Bosnia and Kosovo not receiving their first pre-financing tranches, he added:

"The key message to Kosovo is that it must speed up reforms and communication to obtain the first tranche. I believe Serbia’s political challenges in EU talks don’t affect the Growth Plan; it’s more of a technical assistance tool. The central message is that Kosovo must set its own reform priorities."

Asked whether future tranches will also be tied to political conditions, Arsovski said this will depend on how efficiently the first tranche is absorbed by national administrations.

"The European Commission announced that the second tranche will depend not only on confirmation of new reform priorities and agendas but also on the absorption capacity of the first tranche. If successful, yes. North Macedonia is one step ahead of the others and can expect the second tranche," he concluded.