Economic integration of the Western Balkans into the European Union: The role of EU policies

This chapter evaluates the results of EU policies primarily for the WB economies, and related issues of their integration into the EU. We focus on the six countries that today represent the WB region – Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia (hereafter Macedonia), Kosovo, Montenegro and Serbia. The chapter recalls the most relevant features of EU policies towards the region and analyzes the present degree of EU – WB economic integration in the areas of trade and FDI, both for the whole region and for each individual Western Balkan country. The paper also discusses some of the main longer-term problems of the WB countries that hamper swifter EU-WB economic integration, including current labour market problems, insufficient competitiveness, unfavorable economic structure and low level of development of the Western Balkan countries. Recent changes in EU policies towards the WBs are also briefly examined, in order to give some insights about future prospects.