Economic Integration of the Western Balkans into the European Union: The Role of EU Policies

Abstract

The chapter seeks to evaluate the results of EU policies towards the Western Balkan countries and related issues of their economic integration into the EU. It first recalls the most relevant features of EU policies towards the region over the past two decades and illustrates the present high level of economic integration between the Western Balkan countries and the European Union which has taken place through increasing trade, FDI, financial and banking integration. It also discusses some of the main longer-term problems of the Western Balkan countries that may hamper swifter EU-Western Balkan economic integration, including labour market problems, insufficient competitiveness, unfavorable economic structure and relatively low level of economic development. Recent changes in EU policies towards the Western Balkans are also briefly examined. It is argued that it is in the EU’s own interest to accelerate EU-Western Balkan integration through more substantial financial support and inclusion of these countries into several EU policy areas even before EU membership.