The European Union supports financially the reform process and the overall development of the Western Balkans and Turkey from the Instrument for Pre-Accession Assistance (IPA), from EIB loans, and by means of better coordination with the International Financial Institutions (IFIs), and other donors.
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As of 2007, EU financial support for the Western Balkans (and Turkey) is provided under the Instrument for Pre-accession Assistance (IPA). It replaces previous pre-accession instruments (Phare, ISPA, SAPARD and the former instruments for Turkey), and CARDS which covered assistance to the Western Balkans.
The average annual allocation for the Western Balkans under IPA for the period 2007-2011 is approximately 800 million. This is by far the highest per capita amount provided by the EC to any region in the world (around 30 annually).
IPA offers support through its five components:
- Transition Assistance and Institution Building
- Cross-Border Cooperation (CBC)
- Regional Development
- Human Resources Development
- Rural Development
The last three components are reserved to candidate countries (currently Croatia, the former Yugoslav Republic of Macedonia and Turkey), as they aim to prepare for the management of structural and cohesion funds and rural development after accession. However, the other Western Balkan countries can benefit from similar measures under the first component.
Current IPA support is focused on the priorities identified in the 2007 Commission enlargement strategy paper: state-building, rule of law, reconciliation, administrative and judicial reform, the fight against corruption and organised crime, as well as strengthening support for economic reforms and civil society development. IPA attaches particular importance to the beneficiary countries’ ownership of implementation.
Cross-border cooperation among the beneficiary countries, as well as between them and the neighbouring EU Member States facilitates people-to-people contacts and joint activities by the border regions, and contributes to good neighbourly relations and reconciliation. Support for such cooperation has been increased.
Croatia | 141.2 | 146.0 | 151.2 | 154.2 | 157.2 | |||||
Former Yugoslav Rep. of Macedonia | 58.5 | 70.2 | 81.8 | 92.3 | 98.7 | |||||
Albania | 61.0 | 70.7 | 81.2 | 93.2 | 95.0 | |||||
Bosnia and Herzegovina | 62.1 | 74.8 | 89.1 | 106.0 | 108.1 | |||||
Montenegro | 31.4 | 32.6 | 33.3 | 34.0 | 34.7 | |||||
Serbia | 189.7 | 190.9 | 194.8 | 198.7 | 202.7 | |||||
Kosovo | 68.3 | 124.7 | 66.1 | 67.3 | 68.7 | |||||
The EIB will increase its lending to the Western Balkans from a total of 1.9 billion for 2005-2007, to an estimated 2.8 billion for the period 2008-2010. The EIB lending activities in the Western Balkans focus primarily on projects in the areas of transport, energy, small and medium-sized enterprises, environment, municipal infrastructure, education and health.
The Commission is redoubling its efforts to coordinate with the international financial institutions and bilateral donors. The aim is to leverage the maximum amount of support possible for the region’s main modernisation and development needs, bringing together grants and loans.
In 2006, the Commission signed a Memorandum of Understanding with several IFIs on coordination and cooperation in supporting the candidate and potential candidate countries. In December 2007, the Commission met major bilateral donors and the IFIs to establish a framework for closer cooperation in provision of assistance to the region. In June 2008, the Commission will organise a high-level follow-up meeting.
Cooperation between the Commission and the IFIs focuses in particular on three areas: micro- and small and medium sized enterprises, energy efficiency and infrastructure in the field of transport, energy, environment, and in the social field.
The provides commercial banks and non-bank financial institutions with loan facilities in order to support development of micro-enterprises and households. Over the past two years, the EFSE has provided micro-credit to more than 65,000 small enterprises in the region. The Fund has also succeeded in attracting private capital for micro-lending. The Commission has been participating in the EFSE since 2006. Approximately 10 m were made available for EFSE in 2007.
The started in 2006 for the then candidate countries; Bulgaria, Romania, Turkey and Croatia. In 2007, 34.7 M were committed to roll out the facility also in the Western Balkan by leveraging grants and loans in joint management agreements between the Commission, EIB, EBRD and the Council of Europe Development Bank. Further funds will be provided in the future. The facility will support investment in energy efficiency for Industry and Buildings, and will also develop the financial market in this respect.
The for the Western Balkans will help preparing investment projects to be financed from grants and loans in the areas of transport, energy, environment and social infrastructures. The Facility is being launched following an agreement in November 2007 between the Commission and the EIB, the EBRD and the Council of Europe Development Bank. At a start-up phase, the Commission will provide 16 M for Technical Assistance.
