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On 18 June, the Council of the EU postponed its decision, to be
taken unanimously, to open EU accession negotiations with Albania
and North Macedonia until October due to resistance from some
member states, including Germany, France and the Netherlands.
The decision to postpone accession talks for Albania and North
Macedonia is highly likely to decrease EU-backed reform prospects
across the Western Balkans. North Macedonia has been an EU
candidate county since 2005 and Albania since 2014. In June 2018,
the Council decided to delay by a year its decision on accession
talks with the two countries despite being recommended by the
European Commission to start membership negotiations. In May, the
Commission again noted the progress achieved by the two countries
in improving their judicial and anti-corruption frameworks and in
combatting organized crime, reiterating the need to start accession
talks. The countries in the Western Balkans region will most
probably interpret the repeated postponement as the EU
unwillingness to accept any Western Balkan state in the near
future. This would very probably reduce the incentive to implement
a sound judiciary, anti-corruption and governance reforms in
Albania and North Macedonia, but also in Serbia (in EU accession
negotiations since 2014) and Montenegro (in EU accession
negotiations since 2012).
North Macedonia is likely to suffer from policy volatility and
an increased likelihood of early election before the scheduled vote
in December 2020 because of the delay to the accession talks. EU
accession is a key objective for the government of Prime Minister
Zoran Zaev. The administration has accomplished a diplomatic
success by resolving a 27-year-long name dispute with neighboring
Greece resulting in changing the country's name from the Former
Yugoslav Republic of Macedonia to the Republic of North Macedonia.
The deal, however, has remained divisive, prompting anti-government
protests and strong criticism by the opposition nationalist
Macedonian Revolutionary Organization-Democratic Party for
Macedonian National Unity (VMRO-DPMNE). Without reliable EU
prospects, MPs supporting Zaev's government would probably back a
no-confidence vote initiated by VMRO-DPMNE. This, and Zaev's
outright resignation, would be especially likely if the Council
again rejects the start of accession talks in October.
The government of Prime Minister Edi Rama in Albania, already
engulfed in political turmoil, will be further weakened by the
latest EU decision. The Albanian public has become bitterly
polarized in recent months, with the opposition staging weekly
protests and boycotting parliament and the upcoming local elections
while demanding Rama's resignation. Rama had staked his hopes on a
clear date to commence talks on EU membership, a key policy
objective of the ruling Socialist party, to gain some respite. The
EU decision is likely to stall the reform drive in the country,
including important measures aimed at improving the efficiency and
independence of the judiciary, such as the ongoing vetting process.
If protests persist and turn particularly violent, there is
increased risk of Rama being forced to negotiate and agree to early
elections.
The EU's signal of enlargement fatigue is likely to undermine
political stability in Kosovo and Bosnia. The prospect and promise
of EU integration has been a key anchor of stability for the
Western Balkans in the post-war period. The Kosovo-Serbia
negotiations to normalize bilateral relations, although currently
frozen, were only possible due to the understanding that the end
result would be EU membership. With EU membership becoming ever
more elusive and local governments having little to show in terms
of economic success, it will become increasingly tempting for local
governments to return to old nationalist tendencies as a means to
shore up electoral support. This increases the likelihood of
unintended escalation in the form of low-level inter-ethnic
violence in certain hotspots such as northern Kosovo.
Indicators of changing risk environment
Increasing risk
If the government of Zoran Zaev in North Macedonia resigns in
the one-year outlook, followed by the installment of a VMRO-DPMNE
government, this would increase the likelihood of North Macedonia
withdrawing from the name agreement with Greece, resulting in
almost certain undermining of the country's potential EU
accession.
If the next government in Greece is led by the center-right
opposition New Democracy party, this would decrease the likelihood
of opening accession negotiations with North Macedonia under a
VMRO-DPMNE government or slowing down the accession process for
both Albania and North Macedonia in the case of already opened EU
membership talks.
Protests in Albania escalate and become more violent as
protesters attempt to storm parliament and security responds with
live fire, further diminishing the country's eligibility to enter
EU membership negotiations in the eyes of key EU member
states.
Decreasing risk
If the German parliament approves the start of accession
negotiations with Albania and North Macedonia in September, this
would increase the likelihood that the Council of the EU opens
membership talks with both countries or at least with North
Macedonia in October.
An accord is reached between the Albanian government and
opposition that resolves the impasse and allows for the
continuation of judicial
Posted 20 June 2019 by Dijedon Imeri, Senior Analyst, Country Risk, Economics & Country Risk, IHS Markit and
Petya Barzilska, Senior Analyst – Europe and CIS Country Risk, IHS Markit