In December 2013, the European Council rejected the Commission’s recommendation to grant Albania candidate country status. But on May 12 this year, the sixth meeting of the Stabilization and Association Council between Albania and the EU gave a boost to Albania’s EU membership aspirations.
Albania’s relations with the European Union are stagnant, as internal political infighting prevents the passage of important laws and massive corruption hinders rationalization and EU approximation. Albania’s application for EU membership was declined by the Council in December 2013, and the decision was deferred for June 2014. But there is some hope – during the 6th meeting of the SA Council held under the Greek Presidency, Greek Foreign Minister Evangelos Venizelos seemed committed to further Albania’s candidacy.
According to the 2013 EBRD transition report, Albania’s economic activity has slowed down during the last years (GDP grew only by 1.6 percent in 2012 from 3 percent the previous years) mainly due to the Eurozone and Greek crises. Concerning privatization, four hydropower plants were sold to a subsidiary of a Turkish company. But the operating ban imposed on the Czech distribution company CEZ by the country’s energy regulator in January 2013 has created turmoil in the power sector, making investors very concerned regarding engagement in the Albanian market.
Changing circumstances offer chance for Tirane
Reduction of the regulatory requirements for starting a business stands is among the few notable improvements in the business environment. According to the World Bank 2014 business report, however, indicators show that the country has not improved much from previous years, while existing corruption still hinders investment.
Albania made a considerable step forward with the 2013 June elections, which led to the formation of a government committed to the country’s European future. Nevertheless, progress still needs to be made in the fields of public administration, the judicial system, anti-corruption policy and organized crime. Citing the need for further action, the Netherlands vetoed Albania’s EU candidate status in December 2013.
But the current Greek and forthcoming Italian presidencies present a significant opportunity for Albania regarding its accession process as both countries are strategic partners. The proposed Trans-Adriatic Pipeline, if constructed, will lead to even closer relations among the three countries. What is more, Albania’s human (cheap and highly skilled labour) and natural resources are also a strong potential for the EU.
Albanians support ascension, rely on EU trade
Albania’s trade relations with the European Union are considerable, accounting for 68 percent of the country’s total trade in 2014. Italy is Albania’s main trade partner, followed by Greece, Germany and Austria. Regarding FDI inflows, around 54 percent of the overall FDI stock comes from Greece, followed by Italy. The two periphery countries operate in total 66 percent of foreign-owned enterprises in Albania.
There is a high support among Albanian people for European integration, revealed by the absence of any anti-European political formation in the country’s political spectrum. Yet, citizens of existing member states do not seem to share the same enthusiasm for Albania’s membership. Polls from the Austrian Society for European Policy indicated that there is low public support for enlargement, with Albania’s accession supported by only 20 percent of respondents. Is it just enlargement fatigue or is there indeed a significant risk concerning Albania’s accession?
Bearing in mind the significant progress made towards meeting the key priorities set by the EU and the strong economic ties the country maintains with existing member states, the past cannot be disregarded. Massive corruption is probably the main stumbling block in both the accession process and economic development of the country, marking a score of 31 on Transparency International’s scale of 100. In comparison, Germany and Spain, for instance, score a 78 and 59 respectively.
The Eurozone crisis as well as fatigue from the great enlargement of the previous decade has rendered Europe a ‘tough gatekeeper’ of its frontiers. Thus, even if Albania is granted candidate status in June under the support of the Greek presidency, further steps towards accession will likely be carried out with caution so that Albania’s European future as well as mutual prosperity are not undermined.