Western Balkan businesses need to make themselves heard in Brussels

Europe's World

Picture of Nadežda Kokotovic
Nadežda Kokotovic

Head EU representative at Naftna Industrija Srbije (NIS)

Nadežda Kokotović is the Head of NIS EU Liaison Office and Representation in Brussels

The European Commission published its communication outlining the Enlargement Strategy for the Western Balkans on 6 February. The Strategy demonstrates that the region has never been closer to the European Union in terms of both the current state of affairs and its future. It requests the Western Balkan public authorities, European institutions, international organisations and the civil society to increase their efforts to push overarching economical, societal and institutional reforms. But what is the role of the business sector in this process?

While pessimism about the EU membership perspective continues to grow among the citizens of the Western Balkans, the majority of business leaders in the region believe that accession would be beneficial to their companies. The business chiefs also positively assess the present situation compared to previous years, as the region is ‒ unevenly ‒ recovering from the recession period.

The attitude of the business sector reflects its awareness of the economic facts: the region is already surrounded by the EU single market and, in practical terms, it is already integrated into the EU economically to a vast extent. The Western Balkans region trades 73% of its total goods with the EU, within an almost completely liberalised trade regime. Between 75-90% of the region’s banking systems are EU-owned. Add to this the new EU initiatives to boost market reforms, regional and European economic integration, and it is clear why the voice of the business community needs to be louder at this stage of the enlargement process.

The region is already surrounded by the EU single market and, in practical terms, it is already integrated into the EU economically to a vast extent

As Serbia’s largest energy company and largest corporate investor, tax payer, employer and one of its largest exporters, NIS’ operations directly affect the country’s overall economic stability. The operations also have an effect on the region, given that it has a well-established commercial presence in neighbouring countries, including EU member states (Romania, Bulgaria, Hungary).

NIS understood at an early stage that a risk-oriented, long-term approach is the key to the company’s successful adaptation to the EU market and its acquis. This requires significant investments into technological modernisation, but it also takes time to accept the world’s highest values and standards in climate change, social dialogue and fair competition. Getting to know how the EU market and institutions think and work and understanding the EU legislation as well as the EU decision-making process require quite an effort on the part of the business community.

In some sectors the regulatory integration of the Western Balkans with the EU has advanced far. The Energy Community is perhaps the best example: since 2006, the Western Balkans have been obliged to align in this sector to create a pan-European common energy market, also in terms of security of supply and environment protection.

Recently, there have been new important initiatives: in addition to the EU’s Economic Reform and Governance Programme established to help the Western Balkan countries meet the economic criteria of the accession framework, there is also initiative to create a Regional Economic Area. This proposal strives to expand the opportunities offered by the Central European Free Trade Agreement and to find common ground among states in the areas of labour mobility, investment framework and digitalisation. There is also the Transport Community Treaty between the EU and the Western Balkans that, since 2017, obliges the Western Balkans to enhance their transport structure and to integrate “the region with the EU transport market towards common standards, network efficiency and quality of service” in areas such as technical standards, safety, security, traffic management, social policy, environment and public procurement. Essentially, this is the shortcut to implementing the EU transport legislation prior to formal full EU membership.

In some sectors the regulatory integration of the Western Balkans with the EU has advanced far

Western Balkan businesses are already EU market players: not only because of their intrinsic connection to the EU single market, but also because their domestic markets are progressively shaped by EU rules. Therefore, understanding the EU is of paramount importance. However, the capacities of the Western Balkan public authorities to provide insight in the new market framework are not without limits. This is why it is crucial that the entrepreneurs and employers carefully analyse the upcoming reforms, exchange views with their EU peers, formulate their positions and voice them to their national decision-makers.

Serbian trade associations, such as the Serbian Chamber of Commerce and NALED, are already doing a lot in this direction. However, the entrepreneurs cannot rely on the associations’ capacities alone. It is crucial for the Western Balkan economies that the medium-sized and large enterprises invest in the relevant EU-related information themselves and build their own capacities now for their future benefit. It is a dynamic journey, no doubt.

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