Brussels – The grace period has expired, and the European Commission must now assess whether to redistribute funds. The Growth Plan for the Western Balkans has reached its first defining moment, with €330 million in EU funding potentially shifting from the weakest performers to those best placed to implement the required reforms.
As a Commission spokesperson explained, when a payment condition is not met in accordance with the agreed Reform Agenda, “a grace period kicks in”, meaning that the partner has “one year” to carry out the reforms linked to the disbursement of EU funds. “If you reach the end of this grace period, then the Regulation allows for the potential reallocation of the funding,” the spokesperson added.
On 30 June, the grace period for the first request for payment – covering reforms to be implemented between mid-2024 and mid-2025 – expired, while the grace period for the second request for payment has just begun. The funding at risk amounts to “about €330 million”, while the €700 million figure cited by Commissioner for Enlargement Marta Kos also includes “another first grace period” – due to expire only in December 2026 for Bosnia and Herzegovina.
As previously reported by The New Union Post, two sources familiar with the matter broke down the overall amount of EU funding at risk of being lost in 2026.
The biggest potential loser in this first disbursement of EU funds is Serbia, which stands to lose between €108.7 million and €135.9 million (out of a total allocation of €1.7 billion). Kosovo risks losing €68.8 million (out of €939.2 million), Albania €67.7 million (out of €981.3 million), North Macedonia €49.2 million (out of €798.6 million), and Montenegro €15.1 million (out of €408.1 million).
After assessing each partner’s report on the reforms implemented, the Commission “can potentially look into the reallocation of the funding” and, in the coming weeks, decide whether to redirect funds permanently lost by one partner to another that has demonstrated a greater capacity to implement the required reforms. In practice, countries such as Kosovo and Serbia could see their financial envelopes reduced – with or without redistribution – while others, such as Montenegro and Albania, could receive more funding than initially planned.
For the time being, Bosnia and Herzegovina is not affected by the reallocation of funds, as its deadline was exceptionally extended until December 2026. Nevertheless, Sarajevo could ultimately lose €373.9 million (out of €1.1 billion), having already forfeited more than €100 million because of delays in adopting the Reform Agenda in 2025.
What is the Growth Plan for the Western Balkans?
The Growth Plan for the Western Balkans was presented by the European Commission in November 2023 and approved by the co-legislators of the European Parliament and the Council in April 2024. The plan is structured around four key pillars, aiming both to “close the economic and social gap” between the EU and the Western Balkans and to allow for “on-the-ground integration even before the countries formally become EU member states,” as stated by European Commission President Ursula von der Leyen.
The first pillar focuses on economic integration into the Single Market across seven key sectors, provided the countries align with EU rules and open relevant sectors to neighbouring countries. These sectors include free movement of goods, services, and workers; access to the Single Euro Payments Area (SEPA); facilitation of road transport; integration and decarbonisation of energy markets; the digital single market; and integration into industrial supply chains.
The second pillar emphasises internal economic integration through the Common Regional Market, based on EU rules and standards. Brussels estimates that this could boost the economies of the six partners by an additional 10%.
The third pillar focuses on reforms that will support both the EU accession process for candidate countries and foreign investment, while also strengthening regional stability.
The fourth pillar addresses financial assistance. It established a new instrument worth €6 billion for the period 2024–2027 – including €2 billion in grants and €4 billion in low-interest loans – with payments conditioned on the successful implementation of agreed socio-economic reforms outlined in the Reform Agendas (similar to NextGenerationEU for the 27 EU member states).
Discover more from The New Union Post
Subscribe to get the latest posts sent to your email.
