The Berlin Process is an initiative of the states that supports regional cooperation in the Western Balkans, complementing and reinforcing the European Union's enlargement policy. The meeting of economic ministers is one of the elements preceding the Western Balkans Summit in July, which will take place next week in Berlin. Germany holds the rotating chairmanship of the Berlin Process in 2021. The meeting was hosted by Peter Altmaier, German Minister for Economic Affairs and Energy.

The cooperative format of the Berlin Process is of particular importance to us. It is in Poland's interest to develop transport, energy and digital links, which would allow increasing links particularly on the North-South axis. The activities directed towards the Western Balkan countries are complementary to our efforts under the Trilateral Initiative. It is also in our vital interest to diversify the supply routes of energy resources to South-Eastern Europe. That is why we support the expansion of North-South energy links and the completion of the LNG terminal in Croatia. We also welcome the announcement of support in the Economic and Investment Plan for the Western Balkans for projects to build gas interconnectors that will strengthen the region's energy security – Jarosław Gowin, Deputy Prime Minister, Minister of Economic Development, Labour and Technology said.

He added.

Poland's speciality in the Berlin process could include the promotion of local governments and cross-border cooperation. This is an opportunity to transfer good practice from Central Europe to the Balkans.

Investment and Economic Plan for the Western Balkans

The COVID-19 pandemic had a particularly negative impact on the region's economic situation. According to the World Bank's assessment, the average GDP indicator for the Western Balkan countries has decreased by 4.8%. Countries with a developed service sector (primarily tourism) – i.e., Montenegro, Albania and Kosovo have been particularly affected (also because the diaspora has been cut off from holiday opportunities in its country of origin). In support of the region's economic recovery, the European Union presented an investment and economic plan worth up to EUR 9 billion in October 2020. It aims to accelerate the region's economic development by supporting its energy and digital transformation.

The document outlines 10 priority areas which are going to be supported under the Instrument for Pre-Accession Assistance and through the new EU loan guarantee instrument for the Balkan countries. Priorities include the development of road and rail infrastructure and waterways on North-South and East-West axes and connecting coastal regions. Another priority includes the energy transformation of the region is also a priority through supporting the development of low-carbon generating capacity, constructing gas interconnectors to facilitate the transition away from coal, the integration of electricity systems and increasing energy efficiency (thermal modernisation). Other identified key areas include the development of digital infrastructure, an innovative private sector and youth activation.

The Berlin Process

Cooperation in the Berlin Process format was launched by Germany in 2014. It brings together 10 EU countries (Austria, Bulgaria, Croatia, France, Germany, Greece, Poland – the only one from Central Europe, Slovenia, UK, Italy) and 6 Western Balkan countries (Montenegro, Serbia, North Macedonia, Albania, Bosnia and Herzegovina, Kosovo). Poland joined the process in 2018 and took over the one-year chairmanship of the process in 2019. The Berlin Process is intended to complement the European Union's enlargement policy. One of its priorities involves the acceleration of the economic development in the Western Balkan countries. This is achieved through, among others, strengthening the integration of the economies of the countries in the region and a programme to support infrastructure investment.

Poland's economic cooperation with the Western Balkans

The turnover in the Western Balkan countries in the years 2016-2019 grew dynamically. In the period in question, Poland's exports of goods to these countries increased at an average annual rate of 9%, while imports increased by as much as 29%.

Last year's crisis however, significantly disrupted this dynamically developing trade cooperation, in particular in the area of our exports, which decreased by around 9% (to nearly EUR 1.3 billion). On the other hand, imports from the Western Balkans continued to increase (by 8.7%, to €1 billion in 2020), albeit already at a lower rate than in preceding years.  In 2020, exports to Montenegro (by 28%) and Bosnia and Herzegovina (by around 21%) decreased the most among the Western Balkan countries. This was followed by Serbia and Albania with declines of approximately 6% each.

We are optimistic about the trade figures with the Western Balkans for the first 4 months of 2021, where the exports recorded an increase of 20% up to EUR 483 million, and imports of 26% up to EUR 358 million. At the same time, these increases surpassed the overall trends (19% and 15.6% respectively). Our exports to Albania (by over 30%) and Kosovo (by almost 30%) increased particularly dynamically during the first 4 months of the current year. Exports to Serbia – our largest trading partner in this group of countries have also rapidly increased by 23%.

The Polish export to this group of countries is dominated by products of the electrical-machinery industry (27%). The second group of most exported group of products to Western Balkan countries within 4 months of this year included by agri-food products (20%), followed by chemical industry products (18%) and metallurgical products (10%). 

With respect to imports, in turn, chemical industry products and electrical machinery products dominate (30% each in January-April 2021).