Economic convergence is central to the Western Balkan economies' development and EU integration agenda. Deeper economic integration with the EU can help accelerate convergence by strengthening trade and investment links, supporting productivity and competitiveness, and facilitating participation in European value chains. Advancing economic convergence is, in turn, essential to the region's path toward EU membership, as reducing economic disparities and strengthening economies' capacity to compete within the EU Single Market are key to successful integration.
The EU enlargement process has gained renewed momentum in recent years. Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia are EU candidate economies, while Kosovo is a potential candidate. At the time of writing, Montenegro leads the process, having provisionally closed 18 of its 33 negotiating chapters by mid-2026, with EU membership targeted for 2028. Albania has opened all 33 negotiating chapters and provisionally closed 3 as of July 2026, while Serbia, a candidate since March 2012, has opened 22 chapters and provisionally closed 2. Bosnia and Herzegovina, North Macedonia and Kosovo remain earlier in the process: Bosnia and Herzegovina was granted candidate status in December 2022 and opened accession talks in March 2024, North Macedonia has yet to formally open negotiations, and Kosovo submitted its application for EU membership in December 2022 (European Parliament, 2025[2]).
The EU is the region’s largest source of financial assistance, supporting the economic convergence process. Continued EU support helps Western Balkan economies advance reforms and align with the EU acquis. This support is primarily channelled through the Instrument for Pre-accession Assistance (IPA), currently in its third cycle (IPA III). These resources are further leveraged through blending platforms such as the Western Balkans Investment Framework (WBIF), which combines the EU’s financial contributions with bilateral donor funding and loans from international financial institutions, such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), to support projects enhancing infrastructure, strengthening human capital, boosting competitiveness, and promoting the green and digital transitions — all key to advancing economic convergence with the EU.
Building on these efforts, the European Commission’s Growth Plan for the Western Balkans, adopted in November 2023, provides a key framework to foster socio-economic convergence ahead of accession. Backed by EUR 6 billion in grants and loans, the Growth Plan aims to deliver some benefits of EU membership before formal accession. It is structured around four main pillars:
1. enhancing integration with the EU Single Market.
2. advancing regional economic integration through the Common Regional Market.
3. accelerating structural reforms, including reforms in the fundamentals cluster of the EU accession process.
4. increasing financial support through the new Reform and Growth Facility for the Western Balkans (RGF).
The Growth Plan's RGF has brought EU pre-accession financial support to the region to its highest level on record. Financial assistance to the Western Balkan economies rose from EUR 3.8 billion under IPA I (2007-2013) to EUR 4.2 billion under IPA II (2014-2020), before reaching EUR 8.2 billion under the combined IPA III and RGF envelope for 2021-2027,4 translating into average per capita funding rising from EUR 49.7 annually under IPA I to EUR 53.3 under IPA II and EUR 90.7 under the current envelope (Figure 1.3). This places current support at more than double the per capita funding Croatia received in the cycle preceding its 2013 EU accession (EUR 38.9). Among Western Balkan economies, Montenegro receives the highest per capita allocation for 2021-2027, at EUR 152.6, followed by Albania (EUR 100.6) and Kosovo (EUR 97.5).
The growing levels of EU financial support are expected to support economic convergence, conditional on implementation of the Reform Agendas under the Growth Plan framework. Disbursement of RGF resources is tied to the fulfilment of Reform Agenda milestones, but progress on the ground has been limited: by the first half of 2026, only EUR 673.6 million had been released, representing 11.2% of the total envelope available for 2024-2027 (European Commission, 2026[3]). Montenegro records the highest share of funding released (23.3%), followed by Albania (23.1%) and North Macedonia (18.9%), while Serbia (10.6%) and Kosovo (7%) remain at an earlier stage. Bosnia and Herzegovina remains the only Western Balkan economy yet to receive any RGF funding, as its Reform Agenda had not been ratified at the time of writing.
