Funding of European Integration is the key issue for the future of the Western Balkans countries. Countries that want to join the EU are facing challenges during this process.
The Impact Assessment Institute calculated the impact of the implementation of EU policy targets for the EU Green Deal and the EU Beating Cancer Plan, focusing on 2 Western Balkan countries, the Republic of Kosovo and the Republic of Albania. The analysis shows that Kosovo will lose 20% of government revenues. For Albania, the predicted revenue loss is 10%.
The case study “Budgetary Impacts of EU Integration Process in Western Balkans” assesses the medium to long-term budgetary impacts of the European Union Integration process in Western Balkan Countries. The study focuses on EU policy targets for products that are imported and provide most of the customs and excise revenue: fossil fuel, cars, and cigarettes.
The European Union has set specific policy objectives in the EU Green Deal and the EU Beating Cancer Plan for the year 2040: fossil fuel needs to be phased out; we need to shift to zero-emission cars; and people should stop smoking. Successfully completing the European Integration process means that these targets need to be fully incorporated into the national policies of the countries that aim to join the EU.
The findings of this study indicate the tremendous budgetary implications that EU policy targets can have on government revenues for both of the countries. Total predicted revenue losses for Kosovo are 20%. For Albania, these losses are expected to be around 10%. If no concrete action is taken, these revenue losses can affect financial and macro-economic stability.
In addition, the European Integration process requires significant additional investments by governments. These are needed to implement EU standards across all facets of society and the economy. The EU Green Deal, digitalisation, reform of the agricultural sector, Public Administration Reform, and developing inclusive policies that protect vulnerable groups are just a few examples of policies that will require significant commitment and investment.
The Impact Assessment Institute makes clear that action is required now to ensure that the predicted loss of revenue is compensated.
First, and foremost, Albania and Kosovo need to develop medium to long-term revenue strategies that predict budget implications of the European Integration process: revenue losses, revenue gains, and investment needs.
Albania and Kosovo need to be closely involved in policy debates in the European Union since EU policy targets are binding for countries that want to join the European Union.
Last, and certainly not least, economic growth needs to be at the center of government policies for both countries. This growth is key to financing European Integration.
Click on the links below to read the full Reports for Kosovo and Albania:
Case study for Kosovo: https://iai.al/wp-content/uploads/2023/12/Budgetary-Impacts-of-EU-Integration-Process-in-Western-Balkans-The-Case-of-the-Republic-of-Kosovo-EN.pdf
Case study for Albania: https://iai.al/BudgetaryImpactsofEUIntegrationProcessinWesternBalkans-TheCaseoftheRepublicofAlbania-EN.pdf
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