Western Balkans: A ‘Mini-Schengen’ Zone

Source: Emerging Europe

On 10 October, the leaders of Albania, North Macedonia, and Serbia declared that they would implement a mini-Schengen zone with free movement of goods, capital, services and people. The leaders expect all six Western Balkan countries to join soon.

The ‘mini-Schengen’ zone

The leaders declared that the region would cover the four freedoms that Schengen also includes – free movement of goods, capital, services and people. Exact details of how open the border will be have not been fleshed out. President Vučić of Serbia stated that by 2020, citizens of the three countries would be able to move using their ‘ID cards at most’ to cross the borders. A free movement zone that still includes border crossings would fall short of Schengen which eliminated the majority of physical border crossings. Nevertheless, greater harmonisation of standards and quicker, more accessible border crossings would open up new markets for businesses and stimulate cross-border trade.

Connectivity a priority for the EU

The European Union has recently been promoting more connectivity between the Western Balkan countries. The Berlin Process, which was intended to revitalise the accession process of the Western Balkans, placed great emphasis on increasing connections and cooperation between countries in the region. It has taken the form of investment in physical infrastructure like highways, as well as some social and cultural initiatives such as the Regional Youth Cooperation Office.

This agreement also ticks a box that the EU has long sought from the Western Balkans countries: cooperation without EU oversight. The EU has often spearheaded joint projects, but there has long been a perception that left to their own devices the Western Balkans would remain isolated from each other and potentially fall back into conflict. This bilateral agreement, combined with other measures such as North Macedonia’s name change agreement with Greece, gives a strong impression that the politics of the region are changing.

It suggests a genuine desire to cooperate and eliminate outstanding disputes – a significant barrier to EU accession. Former-Yugoslav EU member states Croatia and Slovenia have consistently failed to resolve their maritime dispute, and the EU wants to avoid importing more bilateral disagreements into its membership.

EU accession as a driver

North Macedonia and Albania are waiting for the beginning of accession negotiations with the EU. Despite Albania undertaking some major reforms, EU member states have continually blocked approval to open talks. A Schengen-type deal with neighbouring countries might help Albania and North Macedonia break the impasse by illustrating their dedication to EU values and practices.

Serbia is currently working through the chapters in EU accession talks; however, the prospect of accession seems distant. Meanwhile, the EU-sponsored dialogue with Kosovo has stalled following Kosovo’s imposition of 100% tariffs on Serbian goods. The mini-Schengen agreement offers Serbia a positive story of taking the lead in preparing itself and the region for EU accession. It also serves to reaffirm Serbia’s commitment to EU membership after recent flirtations with Russia’s Eurasian Economic Union provoked a strong criticism from the EU.

Kosovo’s position

Kosovo has been left in a strange position during this mini Schengen plan. Its citizens already have the most stringent controls on movement as the last Western Balkan territory to still require visas to visit Schengen countries. Now, three of its four neighbours have agreed on freedom of movement. Serbia and Albania do not share a border, except through Kosovo, so until Kosovo joins the zone, road traffic will not benefit much from the relaxed regulations.

Furthermore, the agreement makes Kosovo’s punitive tariffs on Serbia look confrontational and retrograde. The EU has heavily criticised the tariffs for undermining economic cooperation and torpedoing the negotiations with Serbia. Now, Kosovo appears uncooperative compared to its neighbours. Its neighbours seem to be moving forward together towards EU membership, while Kosovo seems stuck in a more confrontational form of politics. This will put more pressure on Kosovo’s new government to drop the tariffs.

Implementation is the key

Agreeing on implementing the four freedoms is the first step. Implementing these changes and coordinating laws and regulations will take significant political will. Agreements on free movement between Kosovo and Serbia have proven very difficult to put into practice after being signed. This agreement is far less controversial, but it may nonetheless prove to be more of an aspiration than a practical policy. Previous proposals for deeper integration in the Western Balkans have floundered on fears that the larger countries would dominate and benefit far more than smaller ones. Vučić’s suggestion of a customs union in 2017 faced opposition for this reason.

The close and sometimes corrupt relationship between private companies and the state in these countries is a further complication. The Albanian government opposed Serbian telecommunications firm Telekom Srbija’s bid to buy Telekom Albania in 2018.  Telekom Srbija is a majority state-owned company, which led to a perception that the sale would represent the surrendering of a national asset to Serbia. Situations like this will become more common as economic integration increases, so a robust, neutral dispute resolution procedure will probably need to be added into place.

The envisioned mini-Schengen zone is possible if the political will behind it remains strong. If major disagreements between Albania, North Macedonia and Serbia can be avoided and it is successfully implemented, it will be a significant economic boost and a major step towards EU membership for all three countries and any others who choose to join.

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