German-Polish European BLOG

Germany and Poland in the Western Balkans: a new field of cooperation under the EU umbrella?

The Western Balkans have been perceived since recently as a potential new field of cooperation between Germany and Poland. However, without a radical increase of Polish economic engagement in the Western Balkans and both countries’ change of approach towards the EU enlargement as far as values (Poland) and political strategy (Germany) are concerned, this scenario will be mostly on paper.

Adam Balcer*

In July 2018 Poland – encouraged by Germany – participated in the Berlin Process summit, an initiative aimed at aiding the integration of the Western Balkan countries into the European Union. It was launched in August 2014 by the German Chancellor Angela Merkel. The next summit will be held in Poznań in July 2019. This perspective creates a window of opportunity to enhance the Polish-German cooperation in the field of foreign policy, this time in the Western Balkans. However, there are certain potential hurdles.

The wars in the former Yugoslavia provide us with a strong evidence that the reinvigoration of the Western Balkan economies is the must. The region underperforms economically, though it has at its disposal a huge untapped potential. Western Balkan countries are de facto part of the European market, but with many disadvantages and no voting rights. The EU Member States have a crucial role to play in this process as key economic partners of the region. However, there is an enormous discrepancy between Poland and Germany regarding their engagement in the economic life of the Western Balkans. Germany is a main investor and trade partner of the region (share: around 10%). It is a key ODA donor to the Western Balkans. In 2016-17 German bilateral ODA transfers to those countries (excluding Macedonia) approached 15% of all the ODA received by the region. Moreover, Germany allocates the biggest amount of money to the EU multilateral development aid which represents the most important source of the ODA in the Western Balkans. In consequence, German institutions realize the largest number of EU funded projects in the region. What is even more important, Germany is home to the largest Western Balkan diaspora in the world. All the while the remittances sent by the labor immigrants working abroad exceed 10% of the region’s GDP. On the other hand, Polish direct investment, ODA, and remittances from Poland into the region are very limited. As far as foreign trade is concerned, only in case of Serbia does Poland’s share surpass 3%. However, Poles and Germans, excluding the neighboring countries of Western Balkans, are some of the tourists most often visiting the region. Meanwhile, the revenue from tourism occupies a very important place in the economies of Albania and Montenegro.

Nevertheless, Germany’s economic engagement in the Western Balkans is proportionally substantially smaller than in Central Europe in the pre-accession period. In fact, the first region lacks such one predominant economic stakeholder and advocate in the EU as Central Europe had before the accession in the form of Germany. Certainly, there are various structural factors which exclude the scenario of Western Balkans becoming the top destination for German and Polish businesspeople. However, in case of an economic revival in the region, its attractiveness for Polish and German companies may increase considerably. Romania’s impressive economic performance in recent years shows that GDP growth of the Western Balkan economies may decisively accelerate if the countries gain a bigger access to EU cohesion funds. In absolute numbers such financial transfers would not become a serious burden for the EU budget, but would require a courageous political decision. In fact, a special responsibility in triggering the discussion on this issue within the EU rests with Germany, the largest contributor to the EU budget and with Poland, the biggest recipient of EU funds.

The economic rebound of Western Balkan countries requires particularly an efficient fight against corruption. In theory in this dimension the EU accession process should serve as the most efficient instrument facilitating the establishment of the rule of law in the region. As Theresia Töglhofer underlines, “Berlin tends to favour a stricter interpretation of accession conditionality than the European Commission. As a consequence, Germany has repeatedly not aligned with the Commission’s assessments and ensuing recommendations.” However, in her opinion a balancing act between sticks and carrots is needed. “Decision-makers – both in the executive and the Bundestag – will need to make sure that strict conditionality be focused on the actual accession criteria, and not succumb to the temptation to arbitrarily strengthen it for domestic purposes.” On the other hand, as Marta Szpala points out, “Warsaw has always been a strong supporter of the “open door” of the European Union. […] For Poland, it is very important to keep promises that the EU has made to candidate countries. That is the way Poland strongly supports the opening of negotiations with [states] which have made considerable progress on the path to the EU.” Unfortunately, the European Commission, the Court of Justice of the European Union, the European Parliament and the great majority of EU Member States, including Germany, recognize the comprehensive changes of the justice system implemented by the Polish government in recent years as dismantling of the rule of law and bringing the judiciary under the control of executive power. This policy gravely undermines Poland’s credibility as a promoter of EU conditionality in the Western Balkans. In fact, these days Poland may even serve as a negative source of inspiration for regional political elites which are very reluctant to accept a strong and independent judiciary.

Adam Balcer is Head of Foreign Policy Program.