Growth Plan for the Western Balkans: EU's desire to help the region or a pressure mechanism?

The European Council gave the green light on May 7 this year for the establishment of the Western Balkans Reform and Growth Fund, an instrument to support reforms and economic growth in the region, serving as a financial pillar of the Western Balkans Growth Plan. As stated by the European Council at the time, there is a precondition for Kosovo and Serbia regarding the use of funds from the Fund related to the normalization of relations. If this condition is not met, both Belgrade and Pristina could be denied access to grants and loans totaling six billion euros. Kosovo Online's sources believe that, although there is a genuine desire from the EU to assist the region, the Development Fund represents a mechanism of pressure.

By: Milena Miladinovic

The Western Balkans Reform and Growth Fund will cover the period from 2024 to 2027. During this period, as indicated by the European Council, the Fund will provide up to two billion euros in grants and four billion euros in loans for six EU partners from the Western Balkans.

The Growth Plan is based on four pillars: Strengthening economic integration with the EU Single Market; Enhancing economic integration within the Western Balkans through a common regional market; Accelerating fundamental reforms; Increased financial assistance.

To receive support under this instrument, every partner in the region, as highlighted by the European Council, must prepare a Reform Agenda outlining the reforms they plan to undertake to achieve the project's goals.

However, an additional condition has been set for Kosovo and Serbia.

"For Serbia and Kosovo, another prerequisite is to engage constructively with measurable progress and tangible results in the normalization of relations to fully implement all their obligations arising from the Agreement on the Path to Normalization and its Implementation Annex, as well as all previous agreements from the dialogue, and to engage in negotiations for a Comprehensive Agreement on the normalization of relations," the statement said.

Kosovo's Deputy Prime Minister Besnik Bislimi stated that the EU Growth Plan could bring Pristina up to 945 million euros.

"This will bring tangible results in many key areas, including improving the business environment," Bislimi said.

The expectations of Kosovo officials were tempered by the EU's envoy for the Kosovo-Serbia dialogue, Miroslav Lajcak, who, during his visit to Kosovo, reminded that access to the EU Growth Plan for Serbia and Kosovo is conditional on a constructive approach to the dialogue process.

Although he did not meet with President Vjosa Osmani and Prime Minister Albin Kurti in Pristina, Lajcak explained the reason for his visit in front of the Kosovo Government.

"I am here in the role of assessing constructiveness, to discuss how we can contribute more to this approach and to ensure that Serbia and Kosovo take the right steps in advancing the dialogue and gaining access to this fund," Lajcak said.

While no signals are coming from Kosovo indicating readiness to meet the EU's condition to benefit from the Reform and Development Fund, especially after Kurti refused to meet with Serbian President Aleksandar Vučic in Brussels, Serbia, on the other hand, claims to have a very ambitious economic progress agenda, relying on the Growth Plan for the Western Balkans.

This was emphasized by Nikola Stojanovic, State Secretary of the Serbian Ministry of Foreign Affairs, at the Dubrovnik Forum.

"We currently have a very ambitious agenda, relying on the EU Growth Plan to stimulate economic growth in the region and connect as leaders," he said.

The EU Shows Readiness

Economic expert Safet Grxhaliu believes that the EU, through the Development Fund, has shown readiness to help the economic development of the Western Balkan countries. However, he argues that the region is missing the opportunity to utilize these funds by taking steps backward.

"Now is the right time for a compromise solution, as the common denominator for resolving problems in the Western Balkans is the normalization between Kosovo and Serbia. The EU and donors have done a lot to support the Western Balkans and individual countries with various projects and their financing. In this context, we must pay more attention to the EU. We know that until 2030, an amount of 30 billion euros has been allocated for supporting the Western Balkans, whether through economic development, normalization, or digitalization of this region. From 2024 to 2027, six billion euros have been earmarked for supporting the Western Balkans. It must be understood that democracy has no alternative; it is the right mechanism for gaining that support. The governments in Kosovo and Serbia know this very well. I think it is time to achieve results and not be hostages of political disagreements when it comes to using these funds. It's time for politicians to focus on the people, not power and political parties. The sooner this is realized, the better the prospects for the Western Balkans," said Grxhaliu.

Grxhaliu cited the agreement between North Macedonia and Greece as a good example, from which, he emphasizes, both countries have benefited.

"We don't need to reinvent the wheel, just learn from such examples. The sterile dialogue conducted in recent years is of no use. I fear that the Balkans will take one step forward and three steps back, which does not favor the future and integrations. This is a missed opportunity to utilize all the funds and resources allocated for the economic revival of the Western Balkans, as preparation for EU membership," he stated.

According to him, the sanctions imposed by the EU on Kosovo and the conditions for using the Development Fund resources are a bitter pill for Kosovo.

"The mere fact that Kosovo has been under EU sanctions for 25 years since the war is a complicating circumstance that we must analyze through several dimensions. Due to these sanctions, normal dialogue with EU countries and Brussels itself is lost; many projects are frozen, and when we add the bypassed circumstance of using the Development Fund's resources, it becomes a bitter pill for Kosovo. It is time to go to Brussels, to talk, and to agree on some solution, rather than always agreeing that we disagree," Grxhaliu believes.

He adds that the EU has clearly stated that both Kosovo and Serbia will be affected by measures if they do not meet the conditions, but the question arises whether solving the problems in the Western Balkans always requires pressure from major powers, or if the countries can reach agreements on their own.

"The EU has been clear, several times indicating that both Kosovo and Serbia will be affected, if not directly, then indirectly by measures. This is soft pressure on the governments of Kosovo and Serbia, but we must ask whether there always needs to be external pressure from some powers or the EU, instead of finding solutions ourselves. It is time to look to the future, because the more we produce politics, the more we strengthen the past, and the future is far more important than the past," Grxhaliu concluded.

Serbian Side Under Essential Pressure

Economist Ljubodrag Savic, on the other hand, believes that the EU might use the Growth Plan funds for the Western Balkans as a mechanism of pressure and conditionality on Pristina for not taking steps towards reducing tensions and normalizing relations with Serbia. However, he also believes that the West is essentially on the Albanian side, and that most pressures are directed at Belgrade.

He argues that all the measures the West uses against Kosovo are a "farce" and only serve to keep that side "under control."

The fact is, he points out, that even if EU funds are cut off, it won't be a big problem for Pristina, considering that Kosovo's main mentors are "across the ocean."

"The 'carrot and stick' system only applies to Serbia, and this is best seen when the Kosovo side eliminated the dinar in Kosovo. There was talk that something would be done - of course, nothing was done. The talk about forming the Association of Serb Municipalities has been going on for years, and every time we get some vague explanation. I think that if the EU wanted to do this, it could be done in almost seven days. But, in essence, they have chosen a side and have committed to that side. Unfortunately, that side is not us, even though the idea that the EU is our destiny is being pushed in public. This is something all countries in the world strive for, but I don't think so; I believe they are exerting the most blatant pressure and pushing their own interests. They have chosen their partners; the USA came and built a base, participated in the war against Serbia, and clearly took a side," Savic pointed out.

He assessed that the West, with the Growth Plan and punitive measures, aims to control the Albanian side and set conditions for it, but that essentially the main pressure is on the Serbian side.

"This is nevertheless a farce in which any reasonably intelligent person can clearly understand what is really happening - Serbia will get nothing, the Albanian side will get everything, it is just a matter of time and tactics. They are not going straight to the point and probably want to control the Albanian side a little by setting some time frames. And these people from Europe who come, they come to justify the money, and that's the essence. The goals and solutions are absolutely known, neither are they in favor of the Serbian people in Serbia, nor the Serbian people in Kosovo, who in the 21st century suffer unprecedented terror that the EU either does not see or does not want to see," he said.

If Pristina's funds from the Growth Plan for the Western Balkans are cut, the economist says, such a measure will not have much effect, considering that Kosovo's main help and support come from "across the ocean" and outside the EU.

The EU, he explains, is on the brink of collapse and is trying to keep pace with the USA and Great Britain as much as possible.

"The only ones who pull the real strings are across the ocean, and it will be as the Americans say. This is just a farce in which the result is already known - the Serbian side will be marginalized in every way, pushed aside, and nothing will be acknowledged. The Albanians will get everything, it just takes time. They are trying to keep them on a short leash, so they don't get out of control," Savic concluded.

Savic notes that Serbia will continue to endure pressures and it is expected to be conditioned with funds from the Growth Plan, emphasizing that this is neither new nor unexpected.

"We face all sorts of issues, from sanctions to border closures, and we were even forced to impose sanctions on another part of the Serbian people across the Drina, thinking that it would achieve something. Serbia is being choked and pressured, sometimes to discipline Serbia to act in their interest, and sometimes to show other countries what awaits them if they do not follow the West's instructions. Serbia is playing a complex game and its leadership is under significant pressure, now we are being persistently pushed to impose sanctions on Russia," Savic states.

State of Democracy and Rule of Law

The allocation of funds that the EU has earmarked for the Western Balkan countries through the Growth Plan will be conditioned by various mechanisms. In the case of Serbia and Kosovo, it will depend on the implementation of agreements from Brussels and Ohrid, says Nemanja Todorovic Stiplija, director of the Center for Contemporary Politics and editor of the European Western Balkans portal.

The Growth Plan, he adds, will also depend on the state of democracy and the rule of law in the Western Balkan countries.

"Some Western Balkan countries will surely be left without funds due to the state of democracy and the rule of law, and Serbia and Kosovo due to the non-implementation of the agreements reached," Stiplija told Kosovo Online.

He points out that the contentious issue regarding the implementation of obligations from the agreements reached in Brussels and Ohrid, in the case of Pristina, concerns the formation of the Association of Serb Municipalities (CSM), while for Serbia, it is Article Four, which involves Belgrade's opposition to Pristina's membership in international organizations where it is possible.

He adds that for the allocation of funds within the Growth Plan for the Western Balkans, the decisive factor for Serbia will be the state of democracy and the rule of law.

"We are expecting the European Commission's report on the state of the rule of law in candidate and potential candidate countries, and I believe that this report will show whether Serbia, as well as other Western Balkan countries, deserve funds from the Growth Plan," he concludes.