Integrating the Balkans with the European Union
The present paper addresses the issue of economic (and political) integration of the Balkans with the European Union (EU). The focus of the paper is on the five countries in the western Balkan region (the SEE-5)2: Albania, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic (FYR) of Macedonia, Serbia and Montenegro. Although Kosovo is still formally part of Serbia, it will be explicitly excluded from the analysis.3 Occasionally, the wider definition of the region is used which also includes Bulgaria and Romania (the SEE-7). Although these two countries entered the EU in January 2007, they may serve as useful points of reference in a comparative framework, given that they are also part of the Balkans region.
The paper will briefly recall the events of the 1990s, as they are crucial for understanding the present economic and political situation of the SEE countries. It will then discuss recent macroeconomic performance, progress achieved with transition-related reforms, and the important issue of integration with the EU. Some tentative conclusions regarding future prospects are given at the end.
KeywordsEuropean Union Foreign Direct Investment Foreign Direct Investment Inflow Economist Intelligence Unit Western Balkan Country
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