Slow progress at EU Western Balkans Summit signals opportunities for Belt Road
The six potential EU-accession countries are likely to be more involved in Belt Road
The six potential EU-accession countries that were invited to attend the EU-Western Balkans Summit held in Sofia on 17 May 2018 came away with few encouraging signs that they will be allowed to join anytime soon. This means that they are likely to continue to hedge their bets and become more deeply involved in the Belt and Road initiative.
German Chancellor Angela Merkel said that she did not view 2025 as a realistic date for EU enlargement, but that it was important to see that progress was being made by the candidates. And French President Emmanuel Macron, who has previously been quite negative on EU enlargement prospects, said that he was in favour of a dialogue about enlargement. But he added that a lot of work still needed to be done, both within the existing EU and by the accession hopefuls. These are Albania, Bosnia-Herzegovina, Serbia, Montenegro, Macedonia and Kosovo.
The words integration and enlargement were missing from the final document, signed by the 28 EU leaders and endorsed by their six Balkan partners. However, there were several references to the need for a commitment to the rule of law and a European perspective, illustrating the unease felt in Brussels about stronger ties between the EU and Western Balkan countries with Russia and China.
"The EU welcomes the shared commitment of the Western Balkans partners to European values and principles, and to the vision of a strong, stable and united Europe, underpinned by our historical, cultural and geographic ties and by our mutual political, security and economic interests," said one of the 17 points in the Sofia Declaration. "The EU reaffirms its unequivocal support for the European perspective of the Western Balkans. Building on the progress achieved so far, the Western Balkans partners have recommitted to the European perspective as their firm strategic choice, to reinforcing their efforts and mutual support. The credibility of these efforts depends on clear public communication."
It also made reference to the connectivity agenda which was launched in February, promoting better cross border connections in areas such as transport, energy and digital services. This February document was titled "A credible enlargement perspective for and enhanced EU engagement with the Western Balkans".
In support of its six flagship initiatives, in Sofia EU President Juncker announced a new package of measures that will boost connectivity within the region and with the EU, notably through the West Balkans Investment Framework. The EU will provide grants for an additional 11 high-priority transport projects (road, rail, ports) worth Euro 190 million. This investment can leverage up to Euro 1 billion in loans from international financing institutions. This includes funding for the first two sections of the Peace Highway (Nis-Pristina-Durres) and the Blue Highway along the Adriatic coast.
In the absence of a clear timetable for EU enlargement, EU Council President Donald Tusk tried to give some encouragement to the six EU accession countries, saying that the connectivity programme is not an alternative to or substitute for enlargement. But some see it as just that, with the EU keen to come in with large infrastructure projects at a time when there is widespread opposition to enlargement among many political parties across the EU. In particular, the EU is keen to dissuade countries from building strong political relationships with Russia and from turning to China for help with infrastructure.
This even applies to countries inside the EU, with both Greece and Hungary building closer ties with China. There is resentment in Greece about the way it was treated by Germany during the Eurozone crisis, as Greece restructured its debt. And Hungary is in a standoff with Brussels about its refusal to take in asylum seekers from the Middle East and Africa.
Cosco Shipping owns Piraeus Port, acquired after Greece was forced to embark on a nationalisation program as a condition of debt restructuring. China Exim Bank is funding the new high-speed rail line between Budapest and Belgrade. And Chinese companies are building motorways in Montenegro and Serbia.
Brussels was recently irritated by a construction contract in Croatia being awarded to a Chinese firm. In January a Chinese consortium led by China Road and Bridge Corporation (CRBC) won the contract after coming in with a 2.08 billion kuna (US$335 million) bid to construct the first phase of the Peljesac Bridge and access roads. Rival bidders Strabag of Austria, and a Turkish-Italian consortium comprising Astaldi and IC Ictas of Turkey, lodged an appeal with the State Commission for Control of Public Procurement Procedure, alleging that the low winning bid from CRBC benefited from unfair state support. The State Commission rejected the filing. The Croatian government officially signed the contract between Croatian roads operator Hrvatske Ceste and CRBC on 23 April 2018.
China's involvement in the region comes within the framework of the Co-operation between China and Central and Eastern European Countries (the 16+1). With China on one side, there are 11 EU member states; Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The other members are outside the EU; Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia. Kosovo is not a member, as it is not recognised as an independent state by China.
As progress on EU enlargement continues at a very slow pace, both countries inside the EU and the six accession candidates are likely to continue to hedge their bets and accept financing from China on large infrastructure projects. This in turn will help China strengthen its links into Europe along the New Silk Road.
At the end of the meeting, the host of the EU Western Balkans Summit, Bulgarian Prime Minister Boyko Borisov, said that the EU member states should not be afraid of enlargement and that enlargement will be back on the agenda during the EU Summit in June. The presidency of the EU rotates every six months. Following Bulgaria will be Austria.
23 May 2018