Opinion of the European Economic and Social Committee on ‘Economic and social cohesion and European integration of the Western Balkans — challenges and priorities’

(exploratory opinion)

(2018/C 262/03)

Rapporteur: Andrej ZORKO Co-rapporteur: Dimitris DIMITRIADIS

Consultation Bulgarian Presidency, 5.9.2017 Legal basis Article 304 of the Treaty on the Functioning of the European Union Rule 30 of EESC Rules of Procedure Section responsible REX Adopted in section 28.3.2018 Adopted at plenary 19.4.2018 Plenary session No 534 Outcome of vote (for/against/abstentions) 189/2/1

1. Conclusions and recommendations

1.1. The European Economic and Social Committee (EESC) welcomes the fact that the EU integration of the Western Balkan countries and their economic and social cohesion is one of the Bulgarian Presidency's priorities.

1.2. The EESC is convinced that the enlargement of the European Union, and in particular the spread of its democratic values and legal standards to the Western Balkan region, is in the interest of both the Western Balkan countries and the EU. The enlargement policy is a key component of the EU's global strategy and also the cornerstone of Europe's stability and prosperity. Therefore, the EESC proposes that the integration of the Western Balkan countries be one of the top priorities of the EU in the future, provided that these countries continue on their path towards fulfilling the necessary conditions for EU accession ( 1 )

1.3. The EESC welcomes the EU-Western Balkans heads of states and governments summit to be held on 17 May in Sofia. In cooperation with our partners, the EESC will be co-organising the Western Balkans Civil Society Conference (15 May, Sofia) ahead of the summit. The EESC is committed to organising, ahead of each such a summit, a joint event with representatives of civil society organisations ( 2 ) from the Western Balkans and the EU. The EESC invites the EU institutions and EU Member States to regularly involve heads of states from the countries of the Western Balkans in EU summits, as proof that the EU considers this region to be part of its future.

1.4. The EESC hopes that the summit in Sofia will confirm the renewed momentum for the EU’s commitment to the region and encourage other future presidencies to keep the integration of the Western Balkan countries high on their priorities. The enlargement of the EU to the countries of the Western Balkans should go in parallel with the reinforcement of the political project of the EU and its institutions.

1.5. The EESC calls the heads of states at the EU summit in Sofia to set out their clear commitment to more consistent and direct support for civil society organisations at all levels. It should also promote more direct public support for independent media.

1.6. The EESC encourages the heads of states at the EU summit in Sofia to assume a proactive role in bilateral disputes by promoting targeted cooperation with both the OSCE and the Council of Europe and by supporting civil society’s role in solving such bilateral disputes.

1.7. The EESC is also convinced that the effective enlargement of the European Union and the promotion of its values in the countries of the Western Balkans ensure security and stability, enhance social and economic development and prosperity, consolidate democracy and the rule of law, facilitate the free movement of people and goods, stimulate investment policy and foster mobility.

1.8. The EESC believes that respect for the rule of law and minority rights is of paramount importance for the democratic, economic and social development of the countries of the Western Balkans.

1.9. The EESC also believes that the role of education and of a free and independent media is very important in order to overcome the disputes of the past and enhance democratic values.

1.10. The EESC notes that the EU accession process remains a key motivation for reforms in the countries of the Western Balkans. The EESC points out the lack of attention given to the economic and social effects of the reforms carried out, considering the major difference in people's economic and social security between EU Member States and candidates for membership. Therefore, the EESC recommends that social, economic and territorial cohesion be assessed when evaluating the fulfilment of EU membership criteria.

1.11. The EESC considers that infrastructure, transport and energy issues must be a high priority in the negotiations with the Western Balkan countries. The EESC also believes that the creation of a digital society and the development of digital skills in all Western Balkan countries should benefit both the public and private sector. The EU can and should contribute to improving infrastructure and to rolling out a broadband network in these countries, which in some cases is far below the EU average.

1.12. The EESC proposes that the EU institutions consider having a functioning social and civil dialogue at national level as one of the criteria for EU membership.

1.13. The EU should draw up a specific roadmap for negotiations with the Western Balkan countries, with a precise timeline and tangible commitments for each Western Balkan country. It would also be necessary to draw up a communication strategy for EU Member States, which would highlight the benefits of the EU's enlargement policy on Western Balkan countries, particularly in terms of ensuring peace, stability, prosperity and economic and social development.

1.14. The EESC encourages the Commission to include respect for minority rights and gender equality among the top priorities in the EU accession negotiations with the countries of the Western Balkans.

1.15. The EESC welcomes the Commission's new strategy for the Western Balkans ‘A credible enlargement perspective for and enhanced EU engagement with the Western Balkans’ ( 3 ) , published on 6 February 2018, and its six flagship initiatives that range from strengthening the rule of law, reinforcing cooperation on security and migration through to joint investigation teams, the European Border and coast guard, expanding the EU Energy Union to the Western Balkans, lowering roaming charges and rolling out broadband in the region.

1.16. The EESC expresses its readiness to engage with civil society from the Western Balkans in order to contribute to taking concrete action in the areas of rule of law, security and migration, socio-economic development, connectivity, digital agenda and reconciliation and good neighbourly relations, as stipulated in the Action Plan in Support of the Transformation of the Western Balkans for 2018-2020.

1.17. The EESC is convinced that the Commission could develop specific programmes that would enable the countries of the Western Balkans to achieve faster social convergence. Uneven and slow progress in addressing these issues is clearly an important factor contributing to the slow progress of their EU integration in general. A new impetus for Europeanisation is urgently needed.

1.18. Social partners and other civil society organisations, both at EU and national level, must be meaningfully involved in the entire process of the EU integration of the Western Balkan countries. It is necessary to strengthen the capacities of civil society organisations through technical and economic support, by facilitating their access to European funding sources (Commission, European Investment Bank, EBRD, etc.), and by informing them in a timely and detailed manner about the accession negotiations process.

1.19. The EESC encourages social partners and other civil society organisations in the countries of the Western Balkans to work closely together during the EU integration process, both at national and at regional level.

2. Political situation

2.1. The Western Balkans is still a politically unstable region, but it is also a growth region with considerable potential.

2.2. The EESC recommends that the Commission, the Council and the European Parliament intensify their communication efforts to explain the benefits and challenges of enlargement policy to European citizens and civil society organisations should be a close partner and conveyor of messages in this process ( 4 )

2.3. It is extremely important that the integration of the Western Balkans continues to be a priority for the EU in the future — not only during the Bulgarian Presidency — and that the EU actively contributes to the stability and peace of the Western Balkans and offers the perspective of accession to the Euro-Atlantic organisations. Such memberships can also contribute to stability in the region by guaranteeing its security and prosperity, and offer the prospect for nations to be reunited in a borderless Europe.

2.4. The EESC welcomes the announcement of the EU summit in Sofia with the participation of the leaders from the EU and the Western Balkan countries, but believes that the summit should also give a more active role to representatives of civil society organisations at EU level.

2.5. The EESC welcomes the recently announced ‘Berlin Process Plus’ agenda ( 5 ) which provides special funds for developing businesses, vocational training, infrastructure, and technology, and projects including transport links between the least-connected countries of the region. This ‘Marshall Plan’ is expected to accelerate a customs union and a common market in the Balkans. Nevertheless, this regional cooperation should not cause a delay in the enlargement process or be seen as its substitute.

2.6. The EESC notes that in the countries of the Western Balkans, there is a desire and readiness for reforms that would entail integration into the European Union, but points out that success remains dependent on the extent to which state institutions are able to effectively implement and enforce them, as well as on the achieved degree of ownership of the process by civil society organisations and the population in general. A specific roadmap for EU accession negotiations with a precise timeline and tangible commitments for each country of the Western Balkans could motivate these countries to implement necessary reforms faster.

2.7. The EESC stresses that it has developed very good links with society organisations in the Western Balkans and that it is well aware of the situation in these countries. The EESC is convinced that civil society Joint Consultative Committees (JCCs) should attempt to fill ‘empty niches’ that are not covered by other bodies in the negotiation process and focus on a selected number of areas. In this respect, the EESC asks for a better exchange of information between JCCs and the Commission, the Council and the European Parliament. The EESC calls for strengthening the role of these JCCs ( 6 )

2.8. Corruption, the impact of organised crime, the general weakness of state institutions and of the rule of law, bilateral disputes, and discrimination against minority groups also represent major and continuing problems for both participation and integration.

2.9. The Copenhagen Criteria are the rules that define whether a country is eligible to join the European Union ( 7 ) . The criteria require a state to have the institutions to guarantee democratic governance and the rule of law, respect human rights, have a functioning market economy, and accept the obligations and mission of the EU.

2.10. All Western Balkan countries cannot join the EU at the same time. The EESC welcomes the fact that Serbia and Montenegro are the current front-runners in the process of integration. It also expresses the expectation that the former Yugoslav Republic of Macedonia and Albania will start negotiations with the EU as soon as possible. It welcomes the fact that Bosnia and Herzegovina submitted the answers to the Commission's questionnaire and that the Commission is currently assessing the possibility of granting it EU candidate status.

2.11. Western Balkan countries are still affected by the wounds of wars and conflicts, ethnic hatred, irredentist designs, and frozen conflicts which might erupt again. It is necessary to strongly encourage the settlement of the most pressing bilateral issues before their accession to the EU, although insisting on solutions to all outstanding issues could delay this process.

2.12. The EESC also believes that civil society can play an important role by bringing the younger generations from different countries together and opening public dialogue on a number of issues that are crucial for the region. Economic development, the improvement of living standards, and employment and social security are conducive to peaceful regional coexistence.

2.13. The Western Balkan countries could set up national councils for European integration that would bring high-level political authorities and key civil society organisations together on a regular basis, with a view to making the process of EU integration more transparent and publicising it more widely ( 8 )

2.14. The EESC has already identified the role of civil society during the accession process and very clearly indicated that civil society engagement in the accession process consists of: (1) direct involvement in the actual negotiations (i.e. screening, preparation of national positions, overseeing progress); (2) social and civil dialogue related to policy formulation and legislative harmonisation with the acquis; (3) participation in the programming of pre-accession funding; (4) independent monitoring of progress and the social effects of the reform processes. The performance of these roles requires adequate financial support, through national government and EU pre-accession funding ( 9 )

2.15. The EESC notes that the EU's interest in quickly and effectively integrating the Western Balkan countries into the EU has decreased, due to other political priorities and the lack of a European enlargement strategy, but also due to different policy approaches by the Member States. In recent years, due to disappointed expectations, Euroscepticism in Western Balkan states has grown. This has weakened the impact of accession criteria and slowed down reforms. This is particularly noticeable in terms of ensuring the rule of law, the freedom of the media and the prevention of corruption.

2.16. Western Balkan countries are reforming, but at very different paces. Much more should be done to battle rampant corruption, organised crime and money laundering. Judicial independence is also crucial for a healthy democracy.

2.17. The EESC deems it necessary to strengthen the fight against terrorism in the Western Balkan countries and strongly supports the Western Balkan Counter-Terrorism initiative (WBCTi) ( 10 )

2.18. The EESC believes that cooperation between the Western Balkan countries and the EU and its relevant agencies (such as Europol) should be further expanded in order to accelerate the enlargement process. This measure is particularly urgent in areas such as security and migration.

3. Economic stability and prosperity

3.1. Economies in the Western Balkans continue to grow, with real GDP growth in the region expected to expand by 2,6 % in 2017. This is expected to increase to 3,0 % in 2018, driven by private consumption and investment, as well as a gradual recovery of credit, remittances and major infrastructure projects. Compared to the situation in 1995, living standards have increased considerably in all six Western Balkan states. Despite that, the six countries still remain among the poorest in Europe. Moreover, economic convergence of Western Balkan states has lost momentum since the crisis and lags behind the convergence shown by new central-eastern and south-eastern European Member States.

3.2. The process of economic convergence in the Western Balkans is extremely long. It is therefore imperative to create an environment that will enable/speed up foreign investment, and to adopt appropriate economic reforms, boost competitiveness and create high-quality jobs.

3.3. The EESC welcomes the progress made in terms of the economic integration of the Western Balkans, as leaders of the region have vowed to deepen ties and work together towards joining the European Union, and it calls for greater involvement on the part of social partners and other CSOs in drawing up economic reform programmes (ERPs), as well as joint conclusions with specific recommendations for each country in the region ( 11 )

3.4. The EESC is convinced that candidate countries need stronger reform incentives. In particular, it is necessary to encourage closer regional cooperation in order to facilitate the fulfilment of the criteria for EU membership.

3.5. The EESC believes that it is necessary to leverage the new inflows of FDI into manufacturing sectors by supporting local supply chains and upgrading the skills and technological capacity of SMEs.

3.6. Energy and transport should be a factor for the development and interconnectivity of the region. This would ensure that the citizens of the countries of the Western Balkans are given a clear idea of the social, economic and environmental benefits of accession to the EU. For example, energy efficiency and energy saving are factors in generating activity for businesses and in creating green jobs as well as traditional jobs.

3.7. The EESC supports the Transport Community Treaty signed by the EU and the Western Balkan countries on 12 July 2017 and encourages the parties to further develop it. In this regard, the European Commission, the European Investment Bank and the countries of the Western Balkans should concentrate their investments to connect the EU TEN-T Core Network and the infrastructure of the Western Balkans. A shared programme, with the identification of available funds and the definition of a common schedule, is therefore now necessary.

3.8. The improvement of infrastructure will reduce transport and energy costs and facilitate large investments in the area. Moreover, the promotion of the digital upgrading of the Western Balkans will contribute to business development, increased productivity and improvements in quality of life.

3.9. The EESC also believes that investment in complementary approaches to traditional economic policies (circular economy, social economy, mainstreaming of sustainable development goals (SDGs)) can ensure overall growth and employment.

3.10. The EESC observes that in all Western Balkan countries, the state still retains an outsized role, while the private sector is smaller than in the seven small transition economies of Europe ( 12 )

3.11. The EESC believes that the state needs to become a more efficient and reliable provider of public services and to ensure a favourable environment for private enterprises.

3.12. The EESC is of the opinion that small and medium-sized enterprises, which make up the majority of businesses, could become the engines of economic growth in all six Western Balkan countries. In order for this to be achieved, a reduction in bureaucracy, a more transparent public administration, fighting corruption and a fully independent judiciary are necessary.

3.13. The EESC supports the conclusions of the 6th Western Balkans Civil Society Forum and expresses deep concern about the shrinking space for civil society in an increasing number of countries in the Western Balkans. It notes that the EU and its Member States committed themselves to promoting space for civil society and enhancing support for building the capacity of CSOs to strengthen their voice in the development process and to advance political, social and economic dialogue.

3.14. The EESC points out that civil society organisations must be meaningfully involved in the economic, social, public and legislative reform process in all Western Balkan countries. It is necessary to strengthen their capacities through technical and financial support, by facilitating their access to European funding sources and by informing them in a timely manner about the accession process.

4. Social stability — unemployment — emigration

4.1. Since the economic crisis, income and especially social convergence between poorer and richer countries in the EU has been slowing down and in certain cases has gone into reverse. This is undermining the EU's own ambitions and calling into question its attractiveness for future members. Poverty, high unemployment, informal economy, low wages, corruption, malfeasance, emigration of skilled workers, discrimination against minorities and brain drain are affecting all Western Balkan countries.

4.2. Although the Western Balkan countries show convergence towards EU28 levels, their pace is rather slow and lags behind the EU region. Data shows that full convergence with EU living standards can take as much as 40 years.

4.3. Wage convergence has not been established within the countries of the Western Balkans. In some countries, the wage gap with the EU has even increased, which affects the economic and social security of people in the Western Balkan countries. Most countries of the Western Balkans have not experienced any increase in real wages since the crisis. Although statutory minimum wages exist in all Western Balkan states, these in many cases do not cover a minimum subsistence level for families.

4.4. The EESC also notes that as a result of high unemployment, labour migration from all six Western Balkan countries is still a dominant issue. It is estimated that a quarter of the population in all six Western Balkan states has moved abroad. Even if remittances from migrant workers are an important source of income and contribute to the domestic economy in the short term, mass migration and population loss have severe long-term consequences for these countries' economic development potential ( 13 )

4.5. With the exception of Montenegro, in the Western Balkan region, low-skilled young people and women were most affected by decreases in employment levels. It is also crucial that in 2015 more than 70 % of the unemployed in all six Western Balkan countries were out of work for more than a year on average ( 14 )

4.6. The EESC is convinced that the EU and Western Balkan countries should pay more attention to the quality of life and social security of these states' citizens. The EESC suggests that consideration should be given to the possibility of applying the principles of the European Pillar of Social Rights when assessing the fulfilment of conditions for EU membership. The Commission could also develop specific programmes that would allow the countries of the Western Balkans to achieve faster social convergence.

4.7. The EESC also expresses the expectation that there is a need to further strengthen competitiveness and to enhance structural reforms in all six Western Balkan countries in order to reinforce the labour market and to slow down emigration. Civil society organisations should be genuinely consulted when developing structural reforms ( 15 )

4.8. The EESC emphasises that labour market trends in the region reveal high inactivity rates among women and urge governments to provide support to ensure that higher employment levels for women are achieved. The EESC also encourages the Commission to include gender equality among the top priorities in the EU accession negotiations with the countries of the Western Balkans.

4.9. The EESC is convinced that respecting minority rights and their culture is fundamental for the development of a democratic civil society in all Western Balkan countries.

4.10. The EESC believes that the role of education in all Western Balkan countries, including equal access to education systems, is crucial in terms of promoting European values, cultivating tolerance towards minorities, fighting against prejudices, and strengthening social cohesion.

4.11. The EESC also believes that a ‘social cohesion agenda’ must remedy skills gaps and skills mismatches by improving the efficiency and effectiveness of education systems. Enhanced financial support for vocational education programmes would help address the skills mismatch in the labour market and reduce the high levels of unemployment.

4.12. The EESC welcomes initiatives by state educational and cultural institutions, academia or civil society organisations on reconciliation, good neighbourhood relations, and a critical approach to the past.

Brussels, 19 April 2018. The President of the European Economic and Social Committee Luca JAHIER

(1) The basic principles of the EU strategy towards the Western Balkans were set out by the Commission on 6 February 2018 in its Communication ‘A credible enlargement perspective for and enhanced EU engagement with the Western Balkans’, COM(2018) 65 final.

(2) In accordance with the established terminology of the EESC, the concepts ‘civil society’ and ‘civil society organisations’ in this opinion include social partners (i.e. employers and trade unions) and any other non-state actors.

(3) COM(2018) 65 final, 6.2.2018.

(4) OJ C 133, 14.4.2016, p. 31.

(5) http://shtetiweb.org/berlin-process/

(6) OJ C 133, 14.4.2016, p. 31.

(7) https://ec.europa.eu/neighbourhood-enlargement/policy/glossary/terms/accession-criteria_en

(8) OJ C 133, 14.4.2016, p. 31.

(9) OJ C 133, 14.4.2016, p. 31.

(10) http://wbcti.wb-iisg.com/, https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/ipa_ii_2016_039-858.13_mc_pcve.pdf

(11) Final declaration from the 6th Western Balkans Civil Society Forum.

(12) World Bank Group, The Western Balkans: Revving up the Engines of Growth and Prosperity, 2017.

(13) ‘Unemployment in the Western Balkans region is significantly higher than the EU28 average with some improvements in the last few years. In particular, Bosnia and Herzegovina, FYROM and Montenegro suffer from persistently high unemployment, but even the 13,5 % current unemployment rate in Serbia, best in the region after recent improvements, is much too high in comparison with the EU Member States. Despite staggeringly high unemployment, about 230 000 jobs were created in the region in the 12 months through June 2017 (a 3,8 % increase); more than half were in the private sector. As a result, employment (in terms of number of jobs, but not in worked hours) returned to pre-2008 levels in all Western Balkan countries except Bosnia and Herzegovina’, World Bank Group, Western Balkans Regular Economic Report, No 12, Fall 2017.

(14) World Bank Group, Western Balkans Labor Market Trends 2017.

(15) As outlined in EESC opinion EU Enlargement Strategy (OJ C 133, 14.4.2016, p. 31) and in the final declaration of the 6th EESC's Western Balkans Civil Society Forum held in Sarajevo, 10-11 July 2017.