The goal of the Growth Plan for the Western Balkans, an unprecedented offer for the region, is to stimulate economic growth, improve living standards, and accelerate the region's EU accession process. The intention is for the citizens of Serbia and the Western Balkans to enjoy the same living standards as EU citizens as soon as possible.
At current growth rates, it is estimated that the Western Balkans would reach the EU's average GDP per capita by 2076. This process needs to be significantly faster. The new Growth Plan is designed to bring the benefits of EU membership to the region even before actual accession, creating new opportunities for economic growth and removing existing barriers to development. This will directly improve the daily lives of citizens and businesses in numerous ways.
The Four Pillars of the Growth Plan
The plan is built on four interconnected pillars. Here’s a brief explanation with a focus on Serbia.
Access to a Market of 500 Million People
The first pillar aims to align Serbia's economy with the EU's single market. Over the decades, the EU has worked to integrate the economies of its member states and remove trade barriers.
Aligning standards, procedures, and regulations may seem technical and tedious, but it has enabled businesses to thrive in a single market of 500 million people. The goal is for Serbia to become an integral part of this market and take full advantage of its benefits as soon as possible.
Examples of Progress
- Joining SEPA
Work is underway with Serbian authorities to enable Serbia’s inclusion in the Single Euro Payments Area (SEPA). Within SEPA, financial transfers between member countries cost the same as domestic transfers. This means that transferring money from a Serbian account to the EU (and vice versa) will incur no additional fees. The potential savings for citizens and businesses are enormous, estimated at around €500 million annually across the region.
- Green Corridors
Long queues of lorries at border crossings are a common sight. By improving procedures and investing in infrastructure, it’s estimated that waiting times for trucks could be reduced by at least three hours per vehicle in the short term. This reduction would have the same effect as lowering the cost of every traded product by 2%. With Serbia’s trade volume with the EU—its main trading partner—amounting to approximately €40 billion last year, this would translate into significant savings, ultimately benefiting consumers.
Other advantages include:
- The abolition of roaming charges between the EU and Serbia
- Agreements on conformity assessments for industrial products, enabling Serbian goods to enter the EU market as if produced within the EU
The list of benefits is extensive, with significant potential advantages for citizens and businesses alike.
A Unified Regional Economy
The second pillar focuses on establishing a common regional market in the Western Balkans. For Serbia, as a net exporter to the region, this means easier access to neighbouring markets, more consumers for Serbian companies and products, a larger labour pool, and a stronger position as a regional hub for international investors.
While the benefits are clear, the Growth Plan also requires all Western Balkan partners to ensure equal conditions for participation. Each partner must open its economy to the rest of the region and engage constructively. Failure to do so would mean losing access to the benefits of the EU single market, outlined in the first pillar. Non-cooperation would block a partner’s own progress rather than that of others.
Financial Support for Serbia's Budget
The third pillar addresses structural reforms necessary to remove existing, often long-standing, barriers to growth. Under the Growth Plan, Serbia is expected to adopt a reform agenda identifying a series of structural measures to be implemented by the end of 2027.
Successful implementation of the measures in the Reform Agenda of Serbia will unlock funding to support Serbia’s budget and establish an investment fund for infrastructure projects.
Serbia’s Reform Agenda and Priorities for the Next Four Years
Serbia continues to advance its reform agenda, with clear priority areas for the next four years:
- Improving the business environment and developing the private sector
- Implementing green and digital transitions
- Developing human capital
- Progressing in fundamental reforms
SEPA: Reducing Transfer Costs
Through the Single Euro Payments Area (SEPA), financial transfers between member countries will cost the same as domestic transfers. This means that individuals in Serbia will be able to transfer money to the EU and the region without additional costs, and vice versa.
Key Areas for Reform
We would like Serbia to address issues such as:
- Improved and more competitive public procurement practices
- Better management of state-owned enterprises
- Reducing skills mismatches in the labour market
- A more competitive and sustainable agricultural sector
- Enhanced energy efficiency
At the heart of these efforts are measures to ensure judicial independence, the proper functioning of democratic institutions, anti-corruption initiatives, and inclusion of minorities.
These are all critical issues that can either open or close the door to fast, dynamic, and sustainable economic growth. The plan is structured to provide dual benefits for countries addressing these issues: unlocking their economic potential and receiving significant injections of additional EU funding for budgetary costs and infrastructure development.
Half of the Funds Will Go Directly to Serbian Citizens
The fourth pillar focuses on increasing EU funding to support the reforms and investments necessary to unlock growth. A total of €6 billion has been made available to the region:
- €2 billion in grants
- €4 billion in favourable loans
This unprecedented level of support raises the intensity of EU assistance to the region to a level comparable to what EU member states receive through cohesion funds. It is another way for Serbia and the region to feel the benefits of EU membership as quickly as possible.
Conditional Release of Funds
The funds will be released every six months based on progress in implementing the reform agenda. Each reform carries a “price tag,” unlocking a specific amount of funding. Half of the funds will go directly to the Serbian budget for the benefit of its citizens, while the other half will be channelled into an investment fund for infrastructure development, including railways, research institutes, and similar projects.
If a country fails to make progress on agreed reforms, it has one year to catch up. After that, the funds are redistributed to other regional partners. This structure provides countries with even greater incentives to ensure progress—sometimes even spite (“inat”) can serve as a powerful motivator for reform.
The opportunity is on the table. It is up to Serbia to seize it.
Key Phases of Implementation and Responsible Institutions
The new Growth Plan covers numerous areas, requiring a team effort with a holistic and inclusive approach that engages the entire society. Public administration, the business community, civil society organisations, citizens, international development partners, and others will need to work together to ensure Serbia maximises this opportunity. Effective coordination and continuous dialogue are essential. Cooperation is the core principle embedded in the DNA of the new Growth Plan.
However, every team needs a coach. For Serbia, the Ministry of European Integration, alongside the Ministry of Finance, is working to keep everyone focused on the goal. On the EU side, the approach is equally inclusive, involving partners and experts from across the European Commission, EU member states, and regional organisations such as the Regional Cooperation Council, CEFTA, and the Transport Community. The Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR) acts as the central coordinator.
Regarding implementation phases, it is expected that the Serbian government will formally adopt the Reform Agenda shortly after consultations with civil society and the National Assembly and submit it to the European Commission for evaluation, following the same process as EU member states.
The first reform results are anticipated by December of this year.
Challenges to look out for
The various pillars and actions under the new Growth Plan are ambitious. There is a lot of work ahead of us, but the possibilities are also huge. As with all reforms, policy adjustments, legal changes, and new standards and practices, there are many challenges that need to be overcome before anything can be fully implemented. This is simply part of the reality when it comes to public administration in any country.
It is important to ensure that there is the necessary momentum, political will and continuity in the administration to ensure the necessary progress. As ambitious as some of the goals are, it is important to point out that all areas of action are built on the recommendations of the European Commission's Annual Report, the Economic Reform Programme and our regular political dialogues, so nothing will come as a surprise. At the same time, nothing within the framework of the new Growth Plan is impossible, especially if there is a will to make the most of the opportunity.
The train is at the station, Serbia has a ticket. It is up to Serbia to embark, with the support of the EU.