Berlin Process Summit: Where do WB6 countries stand after 10 years?
The Berlin Process, launched in 2014, is an intergovernmental cooperation initiative to strengthen ties between a group of EU Member States, inter alia Germany, France and Poland, and EU membership candidate and potential candidate countries in Southeastern Europe. It also aims to foster cooperation in areas like economic development and infrastructure.
The Berlin Process Summit returns to Berlin this year to mark ten years since its launch. For this occasion, we have analysed the economic development of the Western Balkan countries (WB6) since the start of the process in 2014. We have in particular evaluated economic growth, carbon intensity, foreign trade, policy convergence to EU standards, and FDI-attraction for each individual country and the region. Our analysis will inform the ministers of economy during the ministerial meeting on September 24.
- Economic growth: The WB6 region grew by 3.1% per year over the last decade, slightly lower than the emerging economies average growth in the same period (4%), however showing resilience against challenges like emigration, COVID-19, and inflation. Kosovo led with 4.1% growth; North Macedonia lagged at 2%. The region’s GDP in 2023 was similar to Ukraine’s, with GDP per capita higher than Ukraine, Moldova, and Georgia.
- Carbon intensity: WB6’s carbon intensity is four times that of the EU, decreasing more slowly over the past decade. Kosovo and Bosnia have the highest, while Albania has the lowest carbon intensity.
- Foreign trade: The EU remains the most significant trading partner since 2014. Regional trade integration (within-WB6 trade) has stagnated due to non-tariff barriers like customs procedures and product safety regulations.
- Policy alignment with EU standards: Since 2018, WB6 countries have made progress towards meeting EU standards, but significant reforms are still needed. No country has fully met EU standards across the 15 policy dimensions outlined in the OECD’s Western Balkans Competitiveness Outlook.
- Foreign Direct Investment (FDI): FDI inflows have been high, driven by low labour costs, tax incentives, and favourable legal frameworks. Montenegro has been the top performer, while Bosnia and Herzegovina has the lowest FDI stock as a percentage of GDP.
Our full analysis can be accessed here.
Furthermore, we have analysed electricity market liberalisation in the Western Balkans (Link), as well as trade patterns among the WB6 (Link).
