‘Cry wolf’ no more: external anchors and internal dynamics in the Western Balkans

During the past five years, the economies of the West Balkans have been experiencing a period of sustained economic recovery with strong GDP growth, declining price inflation, increasing foreign direct investment (FDI), and the prospect of EU membership in the medium term. With Bulgaria and Romania having joined the European Union in January 2007, the terms of reference and institutional dynamics are changing for countries in the Western Balkans. Croatia is an accession country currently negotiating with Brussels the complex catalogue of membership requirements. The former Yugoslav Republic of Macedonia has been an EU candidate country since December 2005 and Montenegro completed a Stabilisation and Association Agreement (SAA) with the Commission in October 2007, while Serbia’s SAA was adopted in the summer of 2008 but is currently on hold. The economic progress achieved in the Western Balkans and the European perspectives raise the question over the region’s continued ability to take full advantage of this rather favourable mix of developments. This article explores the countries’ varying success in confronting political and economic challenges and seeking opportunities on their road to Europe.