Brussels – The gradual integration of candidate countries has become an increasingly prominent leitmotif within the European Union, particularly in relation to the Western Balkans – a region that has spent more than two decades waiting to join the EU and now risks being overshadowed by the newcomers, Ukraine and Moldova. But is it sufficient simply to extend as many economic benefits of EU membership as possible before full accession?
“I have always had a certain amount of sympathy for that approach. If we know it is harder in this environment to implement reforms, and if we know it takes decades to join,” says Richard Grieveson, Deputy Director at the Vienna Institute for International Economic Studies (wiiw) and a current member of the Balkans in Europe Policy Advisory Group (BiEPAG), in an interview with The New Union Post. However, this positive approach, which raises people’s living standards, also implies “a danger that it could become only that.”
For this reason, while advocating the Western Balkans’ inclusion in aspects of the Single Market, Grieveson stresses that “the ultimate goal still has to be accession,” describing it as “a complete game changer in economic terms.” He points to the post-accession growth of countries such as Poland and Romania, driven by “huge budget inflows” that funded major infrastructure improvements and “the different kind of foreign investment that can be attracted” through participation in the Single Market.
Between roaming and SEPA
During her recent tour of the Western Balkans, European Commission President Ursula von der Leyen highlighted what she described as tangible results of the region’s closer integration with the EU – most notably the adoption of the Single Euro Payments Area (SEPA) schemes and the end of roaming charges.
“Transaction fees in the Western Balkans used to be up to six times higher than in the EU. Joining SEPA will save your companies roughly €500 million per year,” she said at the EU-Western Balkans Investment Forum, referring to the 40 banks from Albania, Montenegro, North Macedonia (and Moldova) that have now officially joined the schemes, allowing euro payments to be processed more quickly and at lower cost.
As Grieveson confirms, SEPA will be “one of the most consequential parts” of the Growth Plan. By reducing transaction costs and processing times, “it does make a difference,” especially for countries where financial flows from EU member states constitute a significant share of the local economy, “as the Western Balkans do.” SEPA is a tangible example that “shows people that integration is happening in practice” – for instance, when sending remittances home. Yet we should remain realistic about its overall impact. “The lack of SEPA is not the reason why the region has a low GDP compared to the EU,” Grieveson adds.
Another development von der Leyen underlined during her latest annual tour of the Western Balkans is the forthcoming abolition of all roaming charges between the EU and both Montenegro and Albania in 2026. “This is good for business, this is good for tourism, and this is especially good for bringing our people together,” she reiterated in both Tirana and Tivat.
Once again, the social value of this step in terms of regional integration and connecting people is beyond dispute. But when it comes to economic gains, neither SEPA nor the removal of roaming charges will, on their own, be a game changer. “Ultimately, the region needs capital, and the size of the pie has to increase,” Grieveson emphasises. Having missed out on much of European integration to date, today’s candidate countries “need more capital than previous joiners.” This brings us back to the central question: how can more capital be attracted to the region?
“That is really the responsibility of both the public and private sectors,” the Deputy Director at the Vienna Institute for International Economic Studies explains. In this context, the signing of dozens of business deals at the EU-Western Balkans Investment Forum – worth an estimated €4 billion in new investment – can be viewed as a positive signal: supporting the scaling up of local firms, expanding EU companies’ operations in the six partner countries, and strengthening cooperation on key economic initiatives. As von der Leyen put it, “we are bringing the region inside the EU’s industrial policy,” sending a clear message to investors: “If you choose the Western Balkans, you choose Europe.”
All things considered, Grieveson stresses that “the most significant element of the new Growth Plan would be entry into the Single Market.” Achieving that would represent a major breakthrough also on the reform front in the region, since pushing through reforms is considerably harder in a constrained economic environment. “This is why the EU needs to do much more to stimulate regional growth and attract additional capital,” he adds.
How to change the economic situation in the Western Balkans
When discussing the concrete steps that could attract more public and private investment into the region, Grieveson is clear that “financial liberalisation is important, but it is definitely not enough on its own.” The shortage of both private and public capital is not a new problem but a persistent, structural challenge. “If you look at the investment gaps, they are very large, even compared with Central and Eastern Europe.” From the EU’s perspective, he notes, at least two actions are needed.
The first is to acknowledge that “the Western Balkans is part of the process of European integration and is subject to most of the same agglomeration effects we see in the EU,” such as the strong pull exerted by Germany and other member states on workers from the region. Yet the Western Balkans do not have access to the extensive cohesion-policy resources available to Bulgaria, Croatia and Romania. As a result, while the six partners face the same pressures – including the loss of young, highly skilled people – they “do not receive the financial support and public capital that poorer EU member states get.”
The second action concerns private investment. Although the EU cannot oblige companies to invest in the region, it should “ensure that the Western Balkans is fully included in all EU industrial policy initiatives.” The region’s omission from the Draghi report was a missed opportunity to highlight the kind of investment incentives that could be introduced in “relatively small markets,” which would not require vast amounts of new capital to produce a meaningful impact. “The Growth Plan is a worthwhile effort to address these issues, but it is only the starting point.”
Full EU membership is therefore more advantageous than gradual integration into the Single Market. As Grieveson points out, all studies show that “nobody has come anywhere close to replicating the benefits of membership from outside the EU.” Since the measures taken so far under gradual integration remain “very far away” from the economic gains associated with full accession, EU institutions must keep sight of what is truly at stake – and of the ultimate objective behind the EU’s so-called “geopolitical imperative” of enlargement.
