As the EU Expands to the Balkans, Who Will Be Left?

by Matthew Edwards

The February 2018 European Commission policy announcement regarding engagement with the Western Balkans – ‘A credible enlargement perspective for and enhanced EU engagement with the Western Balkans’– claimed that the European Union “has long been strongly engaged in the region. From the Thessaloniki European Council in 2003, it has supported the future of the region as an integral part of the EU”. Yet to say that the progress of the EU into the Western Balkans has been glacial until recently probably does a disservice to some glaciers, given the speed with which some have been moving in recent years.

The Commission and its President, Jean-Claude Juncker, suggested that 2025 was a target date for Serbia and Montenegro to join the EU. Barely had this been articulated, however, before EU leaders started to rubbish the possibility. Germany’s Chancellor Merkel, when asked what she thought about the 2025 goal, said: “I don’t think anything of this target date. Membership must be based on factual progress. It’s not about a time horizon, it’s about what’s been achieved…”, while France’s President Macron expressed strong aversion to EU expansion before substantive internal EU reforms. Summing things up, one recent commentary put it that, “on its current trajectory, the region will take decades to join the EU”.

It is well known that the Western Balkans are not just sitting still, and that EU expansion is not taking place in a vacuum. Irrespective, however, of any geopolitical and economic competition, technical assistance and reform efforts, external crises and moves to resolve long-standing disagreements, major internal trends within the countries of the Western Balkans means that even if they all do join the EU, it will not be the same countries that join as they are today. The countries of the Western Balkans will be a reduced, diminished and diminishing addition to the bloc.

The 2017 Revision of the World Population Prospects by the UN has laid stark the predicted demographic decline of central and eastern European countries, the internal EU aspects of which have previously been addressed on the Austrian Economic Center’s blog.  The situation for the six countries of the Western Balkans – Albania, Bosnia and Hercegovina, Kosovo, Macedonia, Montenegro and Serbia – is scarcely less bleak. Of the six countries in the region, five already have broadly static or falling populations, with only Albania expected to grow (very slightly) before it too starts to experience population decline from the early 2030s.

Numerically, the major reductions are predicted to initially be from Bosnia and Herzegovina and from Serbia and Kosovo. Between 2018 and 2035, the population of Bosnia and Herzegovina is expected to shrink by over 165,000 people from 3.504m to 3.336m, and by almost a further 300,000 by 2050. Serbia and Kosovo will jointly go from a current population of 8.762m to 8.144m in 2035, a reduction of over 600,000 people, and then almost a further 700,000 by 2050. Compared to today, even if (optimistically) all six Western Balkans countries were to join the EU by 2035, there would be around 870,000 less people to become EU citizens. The proportionate predicted reductions are shown in the following table.

Of course, these demographic predictions are unlikely to turn out to be totally accurate. The predictions made above are based on data from the UN’s Population Division of the Department of Economic and Social Affairs and use the 2017 assessment’s Medium Fertility Variant growth/decline path. As the UN predications make clear, however, there are a range of possibilities for future population levels, depending on different scenarios – low/high/constant fertility levels, increased/reduced/zero migration, and others. The image below is a snapshot of the forward-looking predictions for Bosnia and Herzegovina that shows the potential range within which the future population level is expected to be by the UN DESA based on the selection of different variables. However, while there is a substantive different within the outliers, what is clear is that the vast majority of predictions are that there will be considerable falls in population level. Similar predictive spreads can be found for the other countries in the Western Balkans.

The demographic breakdown within the overall population figures is even more important and concerning than headline numbers, notably when it relates to the ratio between the working age population (aged 15-64) and dependents (0-14 and 65+ years), not least as there is solid evidence that the ratio of working age people to dependents alone explains one-third to half of long-term economic growth rates. UN DESA data provides projections for the population dependency, again with a range of predictions depending on the level of fertility, migration etc.

In this regard, keeping with the Medium Fertility Variant, the countries of the Western Balkans face severe challenges as there is already – as in the rest of Europe – a falling working/dependency ratio. While the figures are clearly likely to be more indicative than absolute, this ratio is expected to have fallen below two active working age individuals per dependent in all Western Balkan countries by the late 2020s and to continue falling before levelling off after the middle of the century.

With the active working-age population being a major component and driver of growth, the ability of the countries of the Western Balkans being thus able to substantially ‘catch up’ in terms of living standards with their counterparts in much of the EU is problematic, to say the least.  Interestingly, however, it should be noted that this predicted falling ratio for the Western Balkans is actually better on an average-by-country basis than the EU average, at least until around 2060. Joining the EU would pose a question over whether this would remain the case, assuming that (sooner or later after joining) restrictions on the movement of people for work would be lifted. An outward movement of working age individuals from newly joining countries would match the experience seen in many of the countries of central and eastern Europe that joined the EU in the 2000s.

The future likely demographics for the countries of the Western Balkans need to be understood by EU policy makers and politicians for what they mean for the applicant countries and also for what it could mean for EU countries themselves, both in the short term and looking further out, in terms of economic and social growth, pressures and cohesion.

Matthew Edwards is an independent analyst based in Vienna. He gained his bachelor’s from the University of York and master’s degree from King’s College, London. He worked for the UK Government in a variety of analytical and management roles before moving to the private sector where he worked for an international development consultancy firm.

The views expressed on AustrianCenter.com are not necessarily those of the Austrian Economics Center.
2018-10-18T14:43:04+00:00

Leave A Comment