European Union leaders are expected to discuss in the coming weeks the progress of long-standing requests from the Balkan states to join the bloc. But recent studies exploring the scale of money laundering in the region should not appease France and the Netherlands, which, among other member states, want to delay EU enlargement, officials say.
Albania, Serbia, North Macedonia and Montenegro are all candidates for the EU and have expressed frustration over their blocked applications. But opponents of EU enlargement are already seizing on a study suggesting that the real estate market in the Western Balkans is being used to launder the proceeds of drug and migrant smuggling, sparking housing prices. real estate in the region.
The Global Initiative against Transnational Organized Crime, an international non-governmental organization headquartered in Geneva, says illegal money is pouring into real estate markets and construction industries in the Western Balkans. “The dirty money earned and laundered in the region perpetuates an ecosystem of crime and corruption,” said Kristina Amerhauser, one of the authors of a report released by the NGO last month.
The authors say in their report “Spot Price: Analyzing flow of people, drug and money in the Western Balkans”, it is not possible “to concretely quantify how much illicit money generated in the Western Balkans and abroad is effectively bleached. in the region â, but they estimate the range to be between $ 2.2 billion and $ 5.6 billion.
While this may seem small compared to some much richer regions, they note that “these numbers are remarkable, especially when put into perspective.” They add: âFor example, in 2021, the budgets of the interior ministries of North Macedonia and Albania each amount to 168 million euros. [$200 million] ; the Kosovo police force has only 87 million euros [$106 million] available to him.
Large amounts of criminal money are funneled into the region’s real estate markets, distorting them “because prices are artificially raised by criminals who want to launder their assets there”. While house prices fell across the region in 2020 due to the pandemic, many places have still posted significant gains since 2017. Albanian economy contracted last year. averaged 10.2%, but the real estate market continued to grow 5.5 percent.
And the pandemic and the economic slump had little impact on the residential real estate market in the Albanian capital of Tirana, which saw prices double from 2017 to 2020. The rise is “largely due to the liquidity of the economy. organized crime and corruption that have been invested in construction and real estate. ”
The real estate sector in Serbia also experienced unusually high and inexplicable growth between 2018 and 2020, where the construction sector continued to expand despite last year’s pandemic and the contraction of the global economy.
Several money laundering investigations involving real estate and large infrastructure projects have been launched in North Macedonia, including an investigation into Nikola Gruevski, the country’s former prime minister, and his associates.
Large public infrastructure projects have also caught the attention of anti-corruption activists. âMeeting European standards has proven to be a particular challenge for the countries of the Western Balkans when it comes to large projects in areas such as infrastructure and energy in recent years,â according to Marko Pankovski of the ‘Institute for Democracy âSocietas Civilisâ, a Macedonian think tank.
In a comment for European Western Balkans, a news site, he added: âDespite all efforts by civil society, the ruling parties appear to be adamant not to let the contracts for these projects become fully transparent and subject to scrutiny. control of independent institutions. . The main reason for non-compliance with standards is not hard to guess: ruling parties can lead money to end up in the pockets of their associates, which often leads to inflated prices.
France is one of the main opponents of the accession of the Western Balkan states to the EU. French officials say the EU has suffered bad experiences with enlargement to central and eastern European countries as well as continued problems with corruption and the rule of law in countries like Romania and Bulgaria. They say this was the result of allowing what some officials describe as “unprepared” countries to join the EU and they fear that the countries of the Western Balkans have become states captured by corrupt politicians, linked to organized crime.
Supporters of EU enlargement counter that being member states will help the Balkan countries in their anti-corruption efforts.
In 2019, after French President Emmanuel Macron had exercised a veto, Charles Michel, President of the European Council, exasperated, tweeted: âI would like to send a message to our Macedonian and Albanian friends: do not give up! You did your part and we didn’t. But I have absolutely no doubt that you will become full members of the European Union. The then President of the European Commission, Jean-Claude Juncker, said that the blocking of the accession talks was “a major historical mistake”.
Last week Slovenian Prime Minister Janez JanÅ¡a, whose country will assume the presidency of the Council of the EU on July 1 for the next six months, said he would push member states to agree to an aggressive enlargement of the Union. European. He told a press conference that candidate Balkan states would help resolve several issues that are troubling the bloc, including migration and “malicious interference” from outside powers, supposed to mean Russia, Turkey and China.
But he said it would be difficult to achieve unanimity among EU heads of state and government. “Obviously, we can’t do it overnight, we’re not going to be able to do it without everyone’s consensus,” he said.
In March 2020, the EU gave the green light to Albania and North Macedonia to start the accession process, but in November Bulgaria blocked further formal measures due to bilateral disputes with Macedonia of the North on language and history. Serbia and Montenegro have already started accession negotiations, but they have also been slow.
North Macedonian Prime Minister Zoran Zaev has warned that the EU will lose ground to rival powers if the bloc does not start admitting countries from the Western Balkans soon.