Today, the European Commission approved the Reform Agendas of Albania, Kosovo, Montenegro, North Macedonia and Serbia following the EU Member States' positive opinion. In their ambitious Reform Agendas, the five Western Balkans governments commit to socio-economic and fundamental reforms they will undertake to spur growth and convergence with the EU under the Growth Plan during the period of 2024 - 2027.

This step was key to allow payments under the EU's €6 billion Reform and Growth Facility, that will be made upon completion of agreed reform steps.

Commission President Ursula von der Leyen said: “I'm impressed by the work of our Western Balkan partners on their Reform Agendas. It shows that they are committed to the success of the Growth Plan. It's our roadmap to bring the economies of the Western Balkans closer to ours. And to give their companies the access and the means to compete on our Single Market. Everyone benefits, and it's a big leap forward towards the European Union”.

The Reform Agendas focus on the reforms in the priority areas of rule of law and other fundamentals, governance, the digital and green transition, human capital development and the business environment. In addition, each beneficiary has proposed a list of indicative investments to be funded under the Facility, critical to unlocking socio-economic growth, to be approved in the context of the Western Balkan Investment Framework.

The Commission has assessed each Reform Agenda based on the criteria established by the Reform and Growth Facility Regulation. The Commission concluded that the Reform Agendas fulfil the objectives of the Facility, including to accelerate the closing of the socio-economic gap between the beneficiary and the Union, and to further strengthen the fundamentals of the enlargement process.

Payments will be made twice a year until 2027, based on requests submitted by the Western Balkans partners and verification by the Commission of the three sets of conditions:

• Pre-conditions of upholding democratic mechanisms, rule of law and respect for human rights. A specific pre-condition applies to Serbia and Kosovo who must engage constructively in the normalisation of their relations, including the implementation of all Dialogue agreements, which will be assessed taking into account the role and contribution of the European External Action Service.
• General conditions of macro-financial stability and sound public financial management must be fulfilled before the disbursement of funds.
• Payment conditions, i.e. fulfilling quantitative and qualitative steps, to which reforms are split.

The Commission is looking forward to Bosnia and Herzegovina formally submitting their Reform Agenda to proceed with its assessment and continues supporting the authorities to finalise it, for the benefit of all citizens.

Next steps

The Commission shall now proceed to signing loan and facility agreements with the beneficiaries, which will include obligations for beneficiaries to undertake appropriate measures to prevent, detect and correct fraud, corruption, conflicts of interests and irregularities affecting the financial interests of the Union, to avoid double funding and to take legal action to recover funds that have been misappropriated, the collection of adequate data on the recipients of funds under the Facility and the rights to be granted to the Commission, the European Anti-Fraud Office (OLAF), and the European Public Prosecutor's Office (EPPO) where applicable.

In parallel, beneficiaries can request the release of a pre-financing of up to 7% of their total indicative allocation foreseen under the Facility.

The disbursement of pre-financing will be subject to the entry into force of the facility and loan agreements, and subject to the respect of the preconditions, which the Commission will monitor ahead of each payment.

Background

On 8 November 2023, the Commission adopted the Growth Plan for the Western Balkans. This ambitious Plan aims to accelerate the socio-economic convergence of the region with the EU and pave the way to EU membership. The Plan is supported by an increase of financial assistance through the new Reform and Growth Facility which entered into force on 25 May 2024. The Facility will complement the current financial assistance under the Instrument for Pre-accession Assistance (IPA III).

The Facility has a financial envelope of €6 billion, including €2 billion in grants and €4 billion in highly concessional loans. At least half of the total amount (grants and loans) will go to investments through the Western Balkans Investment Framework (WBIF).

The remaining amount of loans will be provided to the treasuries of the Western Balkan governments to accelerate growth based on socio-economic reforms.