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Making the Most of EU Accession
November 11, 2025
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER:
Phone: +1 202 623-7100Email: MEDIA@IMF.org
As prepared for delivery
Good afternoon, everyone.
It is a real pleasure to be here in Tirana—and especially to be at the newest campus of the College of Europe. Let me start by congratulating all of you— students, faculty, and staff— on bringing this remarkable institution to Albania.
Albania’s story over the past three decades is one of transformation—from transition and reform, to reconstruction, steady growth, and modernization. And now, the country stands closer than ever to joining the European Union. That journey is not only about economic alignment—it is about shared values, stronger institutions, and a commitment to connecting Europe’s future.
And that is exactly what the College of Europe has always stood for—preparing young leaders to carry forward the European project.
How fitting, then, that this campus opens here in Tirana, at a moment when Albania and its neighbors are writing a new chapter of Europe’s history.
The Global and Regional Context
We are meeting at a challenging time for the world economy. Global trade tensions have been rising, geopolitical risks are reshaping alliances, and energy insecurity remains a concern.
Europe has been hit particularly hard—by higher energy prices, inflation pressures, and new security spending needs. For the Western Balkans, the impact has been both direct and indirect: higher import costs, weaker external demand, and uncertainty about future trade patterns.
In this environment, collaboration within Europe becomes even more important. The region’s resilience will depend on how well countries can reform, cooperate, and build strength from within.
The IMF and Its Work in Europe
Before turning to the Western Balkans, let me say a few words about the IMF’s role.
The IMF works with 46 European countries. Our teams in Washington are in regular exchange with national authorities, but we also maintain regional offices—in Paris, Brussels, Vienna, and Warsaw—and country offices in several Western Balkan states.
Much like the College of Europe, the IMF’s presence across Europe reflects our belief that every part of the continent requires tailored attention and engagement.
In fact, there are some interesting parallels between our institutions. The IMF opened its first European office in Paris in 1948—just before the College of Europe launched its Bruges campus in 1949. And in 1992, when the College opened its Natolin campus in Poland, the IMF opened its Joint Vienna Institute—a regional center for training government officials from Central, Eastern, and Southeastern Europe. That institute has helped countless policymakers modernize their economies and prepare for EU accession.
So in a sense, both the IMF and the College of Europe have long worked to support the same vision: a more prosperous, better integrated, and resilient Europe.
Let me now talk about the Western Balkan economies, and how they can benefit from EU accession.
The Western Balkans: Resilience and Opportunity
Let me start by giving you a picture how the region did since COVID
Since the pandemic, the region has shown impressive resilience. The economies of Central, Eastern, and Southeastern Europe grew faster than the rest of the continent between 2022 and 2025. The Western Balkans stood out even more, with GDP now well above pre-pandemic trends.
Albania, with average annual growth above 4 percent, has been among the best performers in the region—a testament to sound economic management and strong private sector dynamism.
But growth, as we know, is only part of the story.
Convergence and the Road Ahead
Income levels in the Western Balkans remain well below those in the European Union.
Per capita income in the region averages about half that of the EU members who joined in 2004—and only about a third of that of older EU members. Compared to the United States, today’s income levels in the region resemble those of the US in the 1950s and 60s.
Why this gap?
The Western Balkans face structural challenges similar to those of many European economies—but often in more acute form:
To climb the income ladder, the region must close its investment gap in both infrastructure and human capital.
EU accession provides a historic opportunity to do exactly that. It offers access to the Single Market, integration into Europe’s governance structures, and—just as importantly—a strong anchor for reform.
Evidence from previous EU enlargements is encouraging. IMF studies show that new member states gained about 30 percent in GDP per capita within 15 years of accession, driven by productivity and investment.
For today’s candidate countries, similar gains could cut income gaps with the EU by half within a generation.[1]
But these gains are not automatic. They require ambitious reforms.
Reform: The Key to Unlocking These Gains
Our research highlights five priority areas for lifting growth in the Western Balkans. The first and most crucial is governance—strengthening the rule of law, tackling corruption, and ensuring that institutions serve citizens and businesses fairly.
Weak governance remains one of the biggest obstacles to doing business in the region. Addressing it would not only improve the investment climate but also reduce the emigration of talented young people.
Reforming state-owned enterprises is also vital—ensuring that management is based on merit, not politics, and that operations are transparent and efficient.
Improving public procurement, transparency, and institutional effectiveness would further boost productivity and attract investment.
And beyond economics, these reforms build trust—the foundation of any successful society.
The potential benefit from closing structural policy gaps is very large.
If Western Balkan countries were to close even half of their policy gaps with best-performing peers, they could raise GDP levels by around 9 percent in the medium term—with governance reforms alone accounting for nearly half that effect.[2]
Strengthening governance, improving the rule of law and tackling corruption has the largest potential in the Western Balkans, and could increase GDP levels by over 4 percent.
The impact of governance-related reforms is large given the sizeable gaps in this area. But there is also a political-economy argument for prioritizing governance reforms, which are foundational as they can help build capacity and create an enabling environment. These reforms are generally popular with the broader public, thus possibly creating reform momentum.
Of course, reform is never easy. It requires technical expertise, but even more importantly, political courage.
The Political Challenge
Many countries in the region face limited administrative capacity and competing priorities. The IMF has been helping by providing capacity development—training officials, strengthening institutions, and supporting policy design.
But political will remains essential. Reforms are needed in many areas at the same timeincluding public sector efficiency, business regulations,labor markets, and governance. For this reason, the political effort required for reforms tends to be higher in Western Balkan countries compared to advanced economies.
As history shows, EU accession can serve as a powerful catalyst—providing both motivation and momentum to overcome vested interests and push through difficult but necessary reforms.
A Shared European Effort
Domestic efforts must be complemented by reforms at the EU level as well.
Our simulations suggest that an initial set of EU reforms—those that improve the Single Market, deepen integration, and boost productivity—could raise EU GDP by around 3 percent over the next decade, with positive spillovers to neighboring economies like the Western Balkans.
This is a reminder that enlargement and reform are mutually reinforcing. A stronger EU makes for a stronger Western Balkans—and vice versa.
Conclusion
Let me conclude with this thought:
Europe has always moved forward in moments of challenge. When others built walls, Europe built bridges. When others turned inward, Europe opened its doors.
Today, as global uncertainty rises again, it is time for Europe—and for the Western Balkans—to show that same spirit of ambition and cooperation.
Strengthening growth, deepening integration, and reigniting convergence will require determination, reform, and unity of purpose. But the rewards are immense—a region that is not just part of Europe geographically, but fully part of it economically and institutionally.
The opportunity is before us. It is time to act now.
Thank you.
References
Arnold, Nathaniel, Allan Dizioli, Alexandra Fotiou, Jan Frie, Burcu Hacibedel, Tara Iyer, Huidan Lin, Malhar Nabar, Hui Tong, and Frederik Toscani. 2025. “Lifting Binding Constraints on Growth in Europe.” IMF Working Paper No. 25/113, International Monetary Fund.
Beyer, Robert C. M., Claire Li, and Sebastian Weber. 2025. "Economic Benefits from Deep Integration: Twenty Years after the 2004 EU Enlargement." IMF Working Paper 25/047, International Monetary Fund.
Budina, Nina, Oyun Erdene Adilbish, Diego A. Cerdeiro, Romain A. Duval, Balázs Égert, Dmitriy Kovtun, Anh Thi Ngoc Nguyen, Augustus J. Panton, and Michelle Tejada. 2025. “Europe’s National Level Structural Reform Priorities.” IMF Working Paper No. 25/104, International Monetary Fund.
[1] Simulated gains from EU accession are based on projected baseline levels in 15 years and an additional 30 percent gain in line with estimated gains from previous accession rounds.
[2] Simulations assume that reform implementation closes 50 percent of the policy gaps in different areas relative to the frontier, using estimated elasticities of output to individual reforms.
