Support to the Western Balkans

The European Investment Bank (EIB) Group will provide €1.7 billion to support the social and economic recovery of the Western Balkans from the COVID-19 pandemic. This is part of the €3.3 billion financial support package for the region announced on 29 April by the European Commission and follows the Team Europe efforts to support the Western Balkans.

National healthcare sectors and small and medium-sized enterprises in the region will be the immediate beneficiaries of the EU’s support package, which is also designed to strengthen the national banking sectors and provide technical assistance to realise development projects and stimulate much needed investments.

To ease the health, social and economic impacts of the pandemic, the EIB will provide new financing and accelerate signatures and disbursements of approved loans to private and public sector clients in the Western Balkans, with some €600 million earmarked for the private sector.

Werner Hoyer, President of the EIB, said: “Despite the immense challenges created by the COVID-19 crisis within the EU itself, the Union has shown its unwavering support for its partner countries and its commitment to international cooperation and coordination. The immense needs in the region can only be addressed by a team effort and EIB looks forward to contributing to the Western Balkans Investment Framework and the forthcoming Economic and Investment Plan for Recovery.”

Read President Hoyer’s speech at the Zagreb Summit here

Olivér Várhelyi, the EU Commissioner for Neighbourhood and Enlargement, said: “In our COVID-19 pandemic response we have treated the Western Balkans as privileged partners and future Member States. We are engaged together with the EIB to deliver an important financial package to support immediate needs and economic recovery and are now heavily focused on accelerated use of these funds across the region. Quick delivery is key, to which we are committed. Our work will continue as we prepare a comprehensive economic and investment plan that will help the Western Balkans with a long-term recovery, provide a boost for the economies and support reforms, when needed and as needed.”

The set of EIB emergency measures for the Western Balkans includes:

• the approval of dedicated new financing with more flexible terms and extended eligibilities in support of the healthcare sector and SMEs and mid-caps affected by the pandemic;
• the acceleration of disbursements and signature of existing transactions;
• the re-purposing of existing facilities to support healthcare and the private sector;
• the increase of the available EIB financing under a “COVID TopUp”;
• extended eligibilities for healthcare and civil protection projects promoted by the public sector in line with
• their established national strategies for Pandemic and Emergency Preparedness.

The level of support required by the region is immense and requires the cooperation of all actors, the countries of the region, the EU institutions, international and European financial institutions and EU Member States.

The EIB Group is committed to continuing our good cooperation with all our partners in the Western Balkans, including through platforms such as the Western Balkans Investment Framework (WBIF).

Long-term commitment to the Western Balkans

On top of this immediate support package, the EIB continues to is build up a pipeline of projects, currently estimated at €2.3 billion, to support the long-term sustainable development of the region based on its capacity to offer affordable, long-term financing and technical assistance in the Western Balkans. Between 2008 and 2019, the EIB Group invested more than €8 billion in the regional economies in all sectors, which makes the Group the largest international lender in the Western Balkans.

In line with EU policy and national priorities, the EIB will support projects enabling the region’s transition to environmentally friendly energy generation, digitalisation, better connectivity, job creation and youth employment, environmental protection and resilience to natural disasters while promoting regional cooperation and economic integration.

Support for the modernisation of healthcare

The principal focus of the EU bank in the health sector is on the modernisation, restructuring and improvement of the public health sector in the Western Balkans, with projects promoting equity of access and improvements in the quality of care for patients.

The EIB is ready to provide finance and technical assistance to healthcare systems in the Western Balkans to address any deficits and dependencies, improve hospital infrastructure and transform them into more integrated and resilient national healthcare systems.

The Bank has developed a solid pipeline in this sector that builds on past investments, several of which have been implemented with the support of EU grants. This includes €200 million invested in Serbia to support the modernisation, redevelopment and extension of clinical centers in Belgrade, Nis, Novi Sad and Kragujevac. An additional €200 million was invested in public research and development in Serbia, including upgrades to existing medical research facilities and infrastructure. In Bosnia Herzegovina, the Bank invested €115 million into the reconstruction of the Clinical Centre in Banja Luka and the construction of a new hospital at Bijeljina. Today some of these institutions are a crucial element of their country’s response to the COVID-19 pandemic.

In parallel, the EU bank is providing technical assistance to partners in the region both from its own resources and through EU grants (e.g. from the WBIF) to reform the healthcare sectors in line with best EU standards and practices as well as to further strengthen and build their capacities.

Investing in jobs and sustainable development in the Western Balkans

Small and medium-sized enterprises are the key to economic growth, innovation, social integration and job creation and employ between 60% and 80% of the active population in the Western Balkans.

The EIB will respond to the challenges regional SMEs face due to the COVID-19 pandemic. The Group will boost its financing though its full spectrum of products and services available to SMEs (loans, guarantees and advisory services). The aim is to address the immediate challenges SMEs face as well as maintain their ability to undertake future investments and recover from the current crisis. Part of this support will be provided under the EU-supported Western Balkans Enterprise Development and Innovation Facility (EDIF)

EIB lending to SMEs and mid-caps in the region represents nearly half the total lending in the region to date. EIB funding is channeled via local financial institutions, which subsequently on-lend these funds to small and medium-sized businesses. They have reached out to around 28 400 SMEs and supported in excess of 200 000 jobs at regional level in the last decade alone.

The EU-Western Balkans Zagreb summit took place via video conference on 6 May 2020. EU leaders agreed on the Zagreb declaration, with which the Western Balkans partners have aligned themselves.

The EU is the most important partner of the Western Balkans region and the video conference underline the significance of the unique EU-Western Balkans relations.

In the fight against COVID-19, the European Union and the Western Balkans are united. The summit provided an opportunity to highlight mutual solidarity and cooperation in these time of crisis. Partners in the region have contributed to help EU member states while the European Union  has mobilised over €3.3 billion to help Western Balkans deal with the coronavirus crisis.

The main topics of the meeting were the European perspective of the region, support and cooperation in the COVID-19 crisis, as well as reiterating commitment to EU values and reforms.

As it is stated in the adopted Declaration, which confirms unequivocal support to the European perspective of the region, the leaders of the European Union (EU) and its Member States, in consultation with Western Balkans leaders, and in the presence of regional and international stakeholders, reiterated strong solidarity with our partners in the context of the coronavirus crisis.

“We have reaffirmed and reconfirmed the position of the European perspective for the Western Balkans. It is important to continue the reforms, the rule of law, the democratic values, the fight against corruption – they are essential”, said the President of the European Council Charles Michel in his opening statement.

President of the European Commission Ursula von der Leyen stressed that the Western Balkans belong in the EU and that there is no question about it.

“Once we put behind us this immediate phase of the pandemic, EU will present the investment plan later this year – it will focus on necessary transport and energy infrastructure, but also Green new deal and digitalisation”, stated President of the European Commission Ursula von der Leyen during the press conference.

During the press conference, Prime Minister of Croatia Andrej Plenković highlighted the successes of his country’s Presidency.

“We have managed, thanks to our joint efforts, to open accession negotiations with North Macedonia and Albania. In our view, these decisions were long overdue. We have also managed to adopt a new methodology which will not only help Serbia and Montenegro, which are already negotiating, but also North Macedonia and Albania”, Plenković said.

He added that Bosnia and Herzegovina, in Croatia’s view, deserves the status of the candidate country.

The Summit was attended by WB6 leaders, Aleksandar Vučić, Edi Rama, Šefik Džaferović, Milo Ðukanović, Oliver Spasovski and Hashim Thaci.

 Zagreb Declaration

This Communication addresses the immediate health and resulting humanitarian needs of the coronavirus pandemic, as well as help with the social and economic recovery. In addition, the Commission also outlines the broad parameters of longer-term support to be presented in further detail later on in the year.

Among the recommendations are criteria of ensuring free, fair and transparent elections, in accordance with international standards and strengthening the role of civil society as an important player in democratic consolidation.

The EU-Western Balkans Summit was scheduled to take place on 6-7 May in Zagreb, but it will take place on 6 May 2020 in a form of a video-conference due to the COVID-19 pandemic.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Support to the Western Balkans in tackling COVID-19 and the post-pandemic recovery

As part of the global response to the coronavirus outbreak, the European Commission has announced up to €38 million in immediate support for the Western Balkans to tackle the health emergency caused by coronavirus and reallocation of €374 million to help the socio-economic recovery of the region.
European Commission is responding to immediate needs by supporting the supply of medical devices and personal equipment, such as ventilators, laboratory kits, masks, goggles, gowns, and safety suits.
The EU will assist Albania and North Macedonia to cover the immediate needs of their public health systems with up to €4 million each, Bosnia and Herzegovina with €7 million, meanwhile Montenegro will receive up to €3 million, Kosovo up to €5 million and up to €15 million will go to Serbia, the most affected country until now.

PDF – Overview of the EU support package

The OECD, in its mission to support the SEE region to design and implement reforms, by providing policy analysis and monitoring, policy design, capacity building and implementation support, has in the first response has published a set o notes on the economic impact and policy respones, along with the outlook and short term solutions that would benefit the Western Balkans region amid the COVID-19 Crisis.

  COVID-19 crisis in the WB – economic impact, policy responses, and short-term sustainable solutions (EU-WB6 Zagreb Summit note)

  COVID-19 response in Albania

  COVID-19 response in Bosnia and Herzegovina

  COVID-19 response in Kosovo

  COVID-19 response in Montenegro

  COVID-19 response in North Macedonia

  COVID-19 response in Serbia

  Strategic Response to Covid-19 in SEE

• WB6 letter to the EU Commision on the EU support to the Western Balkans – April 9^th
• Letter to Ms Ursula von der Leyen, President of the European Commission – March 23^rd
• Letter to Mr Phil Hogan, European Commissioner for Trade – March 23^rd
• Letter to Mr Oliver Várhelyi, European Commissioner for Neighborhood and Enlargement – March 23^rd

• MEPs Mr Lukas Mandl (Austria, EPP), Ms Viola von Cramon-Taubadel (Germany, Greens), Mr Ilhan Kyuchyuk (Bulgaria, Renew Europe) and Mr Andrey Kovachev (Bulgaria, EPP) letter to Ms Ursula von der Leyen, President of the European Commission
• Members of the EP INTA committee letter to Mr Phil Hogan, European Commissioner for Trade
• Mr Christian Danielsson, Director-General for European Neighborhood Policy and Enlargement Negotiations