Southeast Europe
Why invest in south-east Europe?
 
Recently, direct foreign investment has had an increasing impact on the development of countries in south-east Europe. Thus, it can be concluded that the competition, i.e. the struggle, to attract direct foreign investment between countries in the region is growing. The governments of the countries in the region are faced with the difficult task of creating, in addition to improving the basic economic conditions in the country, additional incentives that would encourage investors to invest in their country.
 
Additional incentives are not only an important stimulus in attracting direct foreign investment, but are also a means by which governments can effectively channel these investments into specific sectors, narrower activities or regions.
 
South-east Europe is an excellent destination for investment and business development. This is confirmed by numerous studies conducted globally and nationally. The workforce is highly rated in terms of loyalty, dedication and efficiency. The advantage is the availability of qualified and competent staff, and labor costs are still considered lower than in western countries. These indicators are important for investors not only from the point of view of locating production, but above all with regard to the dynamically developing sector of modern business services. It regularly increases employment by growing rapidly.
 
The ranking of logistics infrastructure grows every year, investors appreciate the progress in the quality and development of roads, highways and air transport. The availability of raw materials, materials and components for production is also an important issue for investment. Welcome to south-east Europe
The Enlargement of the Union
The EU aims to promote peace, stability and economic development in the countries of the region and open up the prospect of EU integration.
 
On 1 July 2013, Croatia became the 28th Member State of the European Union. Since then no other countries have joined the EU, and the UK left the EU on 31 January 2020. Accession negotiations are being conducted with Montenegro, Serbia and Turkey. Albania and the Republic of North Macedonia are also candidate countries, while Bosnia and Herzegovina and Kosovo are potential candidate countries.
 
Regional cooperation
European integration and regional cooperation are closely intertwined. One of the key aims of the SAP (Structural Adjustment Program) is to encourage countries of the region to cooperate among themselves across a wide range of areas. A specific component of the IPA (Instrument for Pre-Accession Assistance) is dedicated to regional cooperation and cross-border programmes.
The Sarajevo-based Regional Cooperation Council (RCC) operates under the guidance of the South-East European Cooperation Process (SEECP). The RCC aims to support the European and Euro-Atlantic aspirations of its non-EU members, and to develop cooperation in such fields as economic and social development, energy and infrastructure, justice and home affairs, security cooperation, building human capital, and parliamentary relations. The EU and many individual Member States support and participate in the RCC.
 
Visa-free travel
Visa-free travel to the Schengen area was granted to citizens of the Republic of North Macedonia, Montenegro and Serbia as of December 2009, and to citizens of Bosnia and Herzegovina as of November 2010. In January 2012, a visa liberalisation dialogue was launched with Kosovo. In July 2018, the Commission confirmed that Kosovo had fulfilled the last criterion. Parliament followed suit and decided to enter into interinstitutional negotiations, which are ongoing.(Source: https://www.europarl.europa.eu)
Current status
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    Political system
    Slovenia is a parliamentary democratic republic with a head of government - the prime minister - and a head of state - the president - who is directly elected. The government holds executive and administrative authority. The prime minister and ministers are elected by the Parliament. Slovenia has no regions, but is subdivided into 212 municipalities.
     
    Trade and economy
    The most important sectors of Slovenia’s economy in 2016 were industry (27.6 %), wholesale and retail trade, transport, accommodation and food services (20.7 %) and public administration, defence, education, human health and social work activities (16.9 %). Intra-EU trade accounts for 75% of Slovenia’s exports (Germany 19%, Italy 10% and Austria 7%), while outside the EU 4% go to Serbia and 3% to Bosnia & Herzegovina. In terms of imports, 71% come from EU countries (Germany 17%, Italy 13% and Austria 10%), while outside the EU 5% come from China and 4% from Turkey. (Source: https://europa.eu/european-union)
     
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    Political system
    Croatia is a parliamentary republic in which the head of government - the prime minister - and the head of state - the president - represent the executive power and the state at home and abroad. The government structure is based on separation of legislative, executive and judicial powers. The Parliament holds legislative power and also controls the executive. Its members are elected for 4 years.
     
    Trade and economy
    The most important sectors of Croatia’s economy in 2018 were wholesale and retail trade, transport, accommodation and food services (23.1%), industry (20.4%) and public administration, defence, education, human health and social work activities (15.5%).
    Intra-EU trade accounts for 68% of Croatia’s exports (Italy 14%, Germany 13% and Slovenia 11%), while outside the EU 9% go to Bosnia & Herzegovina and 4% to Serbia. In terms of imports, 78% come from EU Member States (15% Germany, Italy 13% and Slovenia 11%), while outside the EU 3% come from both Bosnia & Herzegovina and China. (Source: https://europa.eu/european-union)
     
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    Serbia submitted its application for EU membership in December 2009 and was granted candidate status in March 2012 after Belgrade and Pristina reached an agreement on Kosovo’s regional representation. Accession negotiations were formally opened on 21 January 2014. The first two chapters, including the one on normalisation of relations with Kosovo, were opened in December 2015. The key rule of law Chapters 23 and 24 were opened on 18 July 2016. To date, 18 out of 35 negotiating chapters have been opened, two of which have been provisionally closed. Since December 2019, no new chapters have been opened. In its
     
    Western Balkans Strategy, published in February 2018, the Commission stated that Serbia (and Montenegro) could join the EU by 2025, albeit acknowledging that this perspective was ‘extremely ambitious’. Serbia’s future EU integration – like Kosovo’s – remains closely linked to the EU-facilitated high-level dialogue between Serbia and Kosovo, which should lead to a legally binding comprehensive agreement on the normalisation of their relations. The latest high-level dialogue meeting took place on 15 June 2021.

    (Source: https://www.europarl.europa.eu)  

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    Montenegro, which gained independence in 2006, applied for EU membership in December 2008. It was granted candidate status in December 2010 and accession negotiations were opened in June 2012. In line with the EU’s ‘new approach’ to the accession process, the crucial rule of law chapters – Chapter 23 on judicial reform and fundamental rights and Chapter 24 on freedom, security and justice – were opened at an early stage in the negotiations, in December 2013. To date, all 33 screened negotiating chapters have been opened, of which only three have been provisionally closed. The last remaining key chapter (on competition policy) was opened in June 2020. In its Western Balkans Strategy, published in February 2018, the Commission stated that Montenegro (and Serbia) could join the EU by 2025, albeit acknowledging that this perspective was ‘extremely ambitious’. (Source: https://www.europarl.europa.eu) 
     
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    Bosnia and Herzegovina (BiH) is a potential candidate country. An SAA was negotiated and signed in June 2008 but its entry into force was frozen, mainly owing to the country’s failure to implement a key ruling of the European Court of Human Rights. The EU’s ‘renewed approach’ to the country, which put more focus on economic governance, allowed the long overdue entry into force of the SAA on 1 June 2015. The country submitted its membership application on 15 February 2016. In May 2019, the Commission published its opinion, including a list of 14 key priorities for BiH, on the basis of BiH’s replies to a comprehensive questionnaire. One of the 14 key priorities is ensuring the proper functioning of the Stabilisation and Association Parliamentary Committee (SAPC), the parliamentary dimension of the SAA. In July 2020, almost five years after the first and, so far, only SAPC meeting in November 2015, the BiH Parliament voted on the SAPC’s Rules of Procedure, thereby paving the way for their formal adoption by the SAPC in June 2021. (Source: https://www.europarl.europa.eu) 
     
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    The Republic of North Macedonia applied for EU membership in March 2004 and was granted EU candidate status in December 2005. However, the country was unable to open accession negotiations for many years, mainly owing to the dispute with Greece over the country’s use of the name ‘Macedonia’. This dispute was successfully resolved through the ‘Prespa Agreement’ on the country’s new name – Republic of North Macedonia or North Macedonia – which entered into force in February 2019. Since 2009, the Commission, with the unwavering support of Parliament, had invariably recommended that accession negotiations be opened. In June 2018, the Council agreed to the possible opening of accession negotiations with North Macedonia in June 2019, provided the necessary conditions were fulfilled. However, in both June 2019 and October 2019, the Council failed to greenlight the opening of accession negotiations. In March 2020, the Council decided to open accession negotiations without additional conditionality. In July 2020, the Commission presented the draft negotiating framework – the first to take into account the ‘revised methodology for enlargement to the Western Balkans’ – to the Member States. Almost one year later, accession negotiations with North Macedonia – and Albania – have not yet been opened. This is mainly due to issues between North Macedonia and Bulgaria related to identity, language and history. (Source: https://www.europarl.europa.eu) 
     
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    Kosovo is a potential candidate for EU accession. It unilaterally declared its independence in February 2008. Five EU Member States (Cyprus, Greece, Romania, Slovakia and Spain) and two countries in the region (Serbia and Bosnia and Herzegovina) have not recognised Kosovo’s independence. In July 2018, six years after a visa liberalisation roadmap was issued, the Commission confirmed that Kosovo had fulfilled all the criteria. The European Parliament immediately followed suit and entered into interinstitutional negotiations, which are ongoing. In the region, only Kosovo remains excluded from visa liberalisation, as some EU Member States continue to have reservations. After a landmark agreement on normalising relations was reached in April 2013 by Belgrade and Pristina (the ‘Brussels Agreement’), the European Council decided in June 2013 to open negotiations on an SAA with Kosovo, which entered into force on 1 April 2016. Kosovo’s future EU integration – like Serbia’s – remains closely linked to the EU-facilitated high-level dialogue between Kosovo and Serbia, which should lead to a legally binding comprehensive agreement on the normalisation of their relations. The latest high-level dialogue meeting took place on 15 June 2021. (Source: https://www.europarl.europa.eu)