EU Enlargement and Development in the Western Balkans

The EU has made one of its aims the gradual development of the Western Balkan countries as a way of reducing the differences in living standards between EU member states and EU candidates. One of the main ways the EU has influenced the region and its governance has been through trade. The Union accounts for 67% of total trade in every WB6 state’s economy (European Commission, 2025a; European Commission, 2025b), and as the dominant commercial partner, it has been able to impose standards upon candidate countries similar to its own, with the aim of raising the quality of imports and services. The inclusion of the Western Balkan states into EU-funded infrastructure networks through instruments such as the European Investment Bank has also been an attempt to address issues such as corruption and organised crime. 

The extent to which a higher standard of living contributes to long-term governance change is debated, but the positive effect on reducing criminality is widely acknowledged. One of the main development issues faced by countries in the region is that, despite periods of GDP growth, economies continue to rely heavily on low-productivity sectors, with low-value industries remaining prevalent (OECD, 2024). The slow rate of adaptability to more lucrative and innovative business activities is not solely a Western Balkan problem. Although labour-intensive industries currently support employment in the Western Balkans, the region’s rapidly ageing population and severe outward migration of young workers undermine their long-term sustainability. As the World Bank notes, “the working-age population has already shrunk markedly and is projected to fall by nearly one-fifth by 2050. Over the next five years, based on current population, growth, and labour market trends, the region will be ‘missing’ over 190,000 workers unless it increases activation. Moreover, the green transition and the rise of AI will intensify pressures–with about 20 percent of workers at risk or needing substantial reskilling” (World Bank, 2025, p. xvi). It can be argued that without a stable inflow of young labour or accelerated technological upgrading, productivity is likely to decline structurally over time as the economy remains reliant on physical labour rather than innovation-driven growth.

Western Balkans Regular Economic Report No. 28: Bridging the Jobs Gap. (Photo Credit: World Bank (2025))

The emigration pressure on national economies has always been a major challenge among developing countries in Europe. As a result of the slow pace of reforms and the proximity to more developed countries, the Western Balkan region has experienced excessive human capital flight. For countries that were once in similar situations, this has led to long-term demographic consequences. The refugee crisis further transformed EU–Western Balkan relations, as the region became viewed increasingly through the lens of security and border management, “a strategic buffer zone between the EU and external threats” (Webb, 2022, p. 1365). Some argue that remittances provide economic aid to the country of origin, while critics point out that they only help households while actually weakening domestic economies.

Western Balkans Regular Economic Report No. 28: Bridging the Jobs Gap. (Photo Credit: World Bank (2025) )

Without clear governance strategies and due to limited economic opportunities, many young people either emigrate or remain unemployed in a system that cannot support them. The EU has tried to limit the negative consequences of this vicious circle through accelerated reforms, as well as conditional economic aid. “The Reform Agenda will identify a limited set of priority reforms, broken down into qualitative and quantitative steps, which will serve as payment conditions, i.e. upon achievement, they will trigger the release of funds under the new Reform and Growth Facility according to a pre-determined timeline. Payment conditions will be linked to specific socio-economic reforms to unlock national and regional growth potential, and to specific reforms related to fundamentals of the enlargement process, including the rule of law, democracy, the respect of human rights and fundamental freedoms.” (European Commission, 2023, p. 8). In light of a wave of populism and demagoguery across Europe, it is worth noting that the enlargement process of the EU can only take place if both future and current members are willing to cooperate. The success of populist rhetoric in the region puts at risk the potential for cooperation and may weaken the EU’s willingness to invest economically in the development of an unstable region. One possible way to counter this would be through the improvement of domestic opportunities and a stronger governmental commitment to reforms.

The lack of long-term, high-quality governance remains a significant weak point in the EU enlargement process. EU conditionality can “unintentionally enable informal networks to consolidate their power” (Richter and Wunsch, 2019, p. 42), undermining democratisation efforts. In Macedonia, for example, the EU criticised state capture but continued to support government progress toward accession, allowing the ruling party to “boost its legitimacy” (Richter and Wunsch, 2019, p. 49). This dynamic reinforces oligarchic networks and stalls anti-corruption reforms (Mungiu-Pippidi, 2007; Richter and Wunsch, 2019). Moreover, improvements in government effectiveness have not matched progress in reducing corruption, suggesting that Western Balkan governments possess increasing capacity but lack the political will to implement meaningful reforms (Richter and Wunsch, 2019, p. 52). Joint EU-domestic projects have sometimes reduced trust in both institutions. As trust declines, incentives for reforms weaken and legitimacy problems emerge. Some have suggested stricter conditionality could be the answer, while others argue EU oversight remains insufficient as long as candidate countries stay outside the Union. It is important to note that some states have adhered more closely to EU norms and have advanced further toward membership than others.

One crucial aspect for Western Balkan countries joining the EU is the need to align their foreign policy with that of the Union. Many countries in the region have either benefitted directly from China’s infrastructure loans, have long-standing historical ties with Russia, or remain under the influence of Turkey. Russia continues to undermine EU-led Kosovo–Serbia negotiations through what has been described as “a hybrid offensive that seeks to derail Western diplomatic initiatives” (Davies, 2021, p. 2). This creates political and security challenges that complicate alignment with EU foreign policy (Davies, 2021). The Russian war in Ukraine has further increased the Western Balkans’ bargaining power, as their cooperation has become more vital to the EU (Amadio Viceré and Bonomi, 2024, pp. 1172–1173). Freedom of movement is one of the fundamental principles of the EU, but it also becomes a potential risk if countries lacking the capacity or willingness to secure their borders are integrated too quickly. The longer negotiations stall between the EU and Western Balkan candidates, the weaker European influence and leverage becomes. Without EU integration and institutional protection, foreign powers can expand their influence with little opposition. The following figure illustrates clearly the trend of foreign investment in the case of Serbia.

Foreign direct investment (net flows) in Serbia. (Photo Credit: Vulović, M. (2023) )

The EU enlargement process is supposed to prepare Western Balkan countries for full membership. The underlying motivation remains strategic: the EU seeks “to secure its backyard” and prevent instability in the region (Vachudova, 2014, p. 130). If the process never reaches its end, it represents an EU failure rather than solely a regional one. Choosing between alignment with the EU and alignment with other foreign powers remains difficult for small states. The responsibility of the EU is to provide greater support and accelerate the accession process for states demonstrating commitment and progress. Several proposals suggest supporting candidate countries through clearer accession steps and a more transparent process. One such idea is an interim status with conditional benefits, including access to the Single Market and increased targeted funding. This status would also require greater EU involvement in safeguarding free media and strengthening independent institutions. With more active EU engagement, the Western Balkan states could reach full membership and the additional benefits that come with it far sooner.

Current EU accession status of the Western Balkans. (Photo Credit: International IDEA (2022) ‘Democracy in the Western Balkans: A long and winding “European path”’)

There is a clear connection between economic development and the political realities of the Western Balkan countries. The security risks associated with this process can be reduced if the EU adapts to regional realities and offers the candidates better alternatives than reliance on foreign actors or governance practices more suited to authoritarian systems than EU membership. The integration of the region is highly dependent on the EU itself, as the prevention of external interference in a strategically important area is crucial for the European continent. The progress of the integration process varies significantly across the Western Balkans, with some states adopting EU norms more consistently than others.

Bibliography

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